Understanding SDA Housing in Australia: Challenges & Investment Opportunities

April 25, 2024

The National Disability Insurance Scheme (NDIS) is Australia’s crowning jewel in its commitment to supporting individuals with disabilities assisting over 610,000 Australians, showcasing its widespread reach and the trust placed in it by the community. This number speaks volumes about its importance in the lives of many. The NDIS aims to provide Australians with disabilities all the necessary tools and resources to lead a more inclusive, independent life. Whether it’s access to daily living aids, therapies, or suitable SDA housing, the scheme is all about empowering the disabled community.

One of the pressing challenges facing the NDIS and the broader Australian community is the need for Specialist Disability Accommodation (SDA) housing. The demand for SDA housing has been surging, but the supply isn’t keeping up. With an increasing number of Australians requiring such specialised accommodations, the current supply landscape is lagging, creating a noticeable gap.

Housing Shortage and Rising Demand

Regrettably, there’s a gaping void when it comes to SDA housing providers, largely because of the stringent criteria and stipulations linked to Specialist Disability Accommodation (SDA) homes. The most recent figures from NDIA suggest that by 2032, Australia will require close to 30,000 SDA spots. Yet, as it stands, fewer than 7,000 positions in New Build SDA residences are up for grabs. This imbalance makes it exceedingly tough to ramp up supply to match the escalating demand.

“Why is there a shortage in the supply of SDA?”

The main challenge with SDA housing is its specific requirements. Every category, be it Fully Accessible, High Physical Support, or Robust, needs its own unique design, making it different from regular homes. For builders who aren’t familiar with SDA specifics, this can be tricky. And without the right certification, they risk missing out on tenants and potential rent.

On the finance side, there’s another hurdle. Banks are more willing to back finished SDA projects that promise good returns. But when it comes to funding the building stage, they’re often cautious, mainly due to their limited understanding of the special construction needs and potential risks.

The Dynamics Behind SDA Housing Category Differences

Consequently, that’s the category builders primarily focus on constructing. While it’s not inherently problematic—after all, individuals with Improved Livability and Fully Accessible funding can reside in a High Physical Support home—the income potential for the investor is dictated by the funding tier of the resident. Simply put, if a person with Improved Livability or Fully Accessible funding occupies a High Physical Support dwelling, the investor receives a return based on the resident’s funding level, which is lower than the potential maximum income for High Physical Support. 

However, for a balanced and holistic approach to SDA housing, it’s crucial for investors to recognize the vast opportunities in other categories. Not only does this meet a broader range of needs within the disability community, but it also diversifies the investor’s portfolio. Diversification can reduce risk and tap into a more extensive range of income potentials. Investing across different categories ensures a more inclusive housing market and potentially opens doors to a wider tenant base.

Creating Cohesive SDA Housing Pathways for Investors

It’s essential to engage with builders experienced in SDA projects. Organisations like ours play a pivotal role in this space. Though we aren’t builders or providers, our distinct position allows us to bridge the gap. We operate across Australia, collaborating with a myriad of builders and developers, ensuring that wherever you are, there’s potential access to the right professionals through our network. 

Furthermore, we are continually in pursuit of providers with participants in need of homes. Our mission is to establish connections, linking investors to providers for properties either in planning stages or already under construction. The essence of our work thrives on collaboration. A collective approach amplifies the success and efficiency of the SDA housing landscape for everyone involved.