A promise by the NSW government to protect renters' rights has the premier facing a potential showdown with the city's richest man who is threatening to stop constructing thousands of rental properties in a move that could drive up rents across Sydney.

Following a promise by the opposition to extend the default length of rental leases and limit the frequency of increases, the state government last week announced it had been developing its own renters' rights reforms to be brought into parliament early next year.

Harry Triguboff says Meriton will cease to build properties if renters' rights reforms proceed too far. Credit:Rob Homer

But the founder and owner of development and rental giant Meriton, Harry Triguboff, has warned Ms Berejiklian lengthening tenancies or limiting rent increases overly would cause the company to pull the thousands of properties it currently has in the rental market, a move that could potentially raise costs.

"I will sell all the rental properties, which I will vacate and I will not build any new ones," Mr Triguboff said to The Australian Business Review on Wednesday. "If I don't get the answers [about any policy impact on investors], I will not renew any lease."