News

October 10, 2022

Assessing SDA Property Growth

Despite the recent property boom, savvy investors know that the best and most consistent returns on property investment tend to happen over the long term.

However, one relatively new property market sector has significant potential upside in the short, medium and long term — the specialist disability accommodation (SDA) sector. SDA housing was introduced under the National Disability Insurance Scheme (NDIS) in 2016 and provides Australians with disability the opportunity to access special disability accommodation (SDA) that is tailored to support their unique needs.

NDIS properties are not only socially-focused but present an unprecedented investment opportunity.

Keen to learn more? Below, we discuss how NDIS homes may meet your investment and ethical objectives.

How is an NDIS property different to a standard investment property?

One of the revolutionary outcomes of the NDIS has been the SDA scheme, which addresses the crucial lack of appropriate housing and accommodation for a person with disability. In fact, you may not even be aware that without suitable housing, many of Australia’s community members with disability end up in aged care facilities.

Specialised housing via the SDA scheme is built to four specific SDA categories:

  • High physical support.
  • Robust.
  • Fully accessible.
  • Improved livability.

The specialist disability accommodation categories have been designed to provide appropriate housing for those with extreme functional impairment, very high support needs or significant physical impairment.

An NDIS property needs to be SDA compliant and can only be tenanted by SDA participants. For this reason, a unique SDA market has formed, with SDA homes becoming available for private investment.

Investment property returns

NDIS property investment works similarly to standard property investment because it offers income and capital growth potential. However, with NDIS property, the rental yields are Government-backed for 20 years — a feature not available on the regular property market.

NDIS housing investment income potential

Properties in the SDA market earn higher than average returns than non-SDA properties — one of the main drawcards for property investors is that the rental income they receive is Government-backed.

The Australian government is expected to grow SDA funding to a staggering $700M! Federal Government backing provides investors with an unparalleled opportunity and disabled Australians the chance to find a forever home.

Specialist Disability Accommodation capital growth potential

The current undersupply and high demand for suitable accommodation create the ideal conditions for consistent long-term capital growth.

A recent report forecast that current demand conditions could see the value of the sector increase fivefold to cater for the estimated 28,000 NDIS participants who have the highest care needs and require specialised housing.

Reviewing the Stats on NDIS Property Investments

Understanding SDA terms

At Apollo Investment, we understand that SDA housing comes with its own terminology and processes. Let us help you familiarise yourself with some of the terms you may encounter.

Reasonable rent contribution

NDIS-approved tenants are required to make a reasonable contribution to their rent, which the government supplements. Often, this is taken as a percentage of their disability support pension, and typically, all of their Commonwealth Rent Assistance helps contribute to the rental cost.

NDIS Service Providers

NDIS providers are people, businesses or organisations who deliver NDIS-funded support to NDIS participants. NDIS providers often work in SDA homes to provide support services to tenants, and are arranged through support coordinators.

SDA providers

SDA providers can be organisations, private landlords or even a family member of the NDIS participant. Becoming an SDA provider means becoming a registered provider under the NDIS Quality and Safeguards Commission.

SDA payments

SDA payments are the payments made to SDA Providers to help with the cost of providing specialist disability accommodation.

How you can introduce SDA growth potential in your property portfolio

Private investors looking to access the unique growth potential of the SDA market need to do their due diligence. Working with a specialist provider in NDIS investment is paramount, especially when navigating the more complex requirements for purchasing SDA properties.

Apollo Investment has a proven track record of helping investors purchase approved SDA housing as well as design and build SDA-approved homes in areas with high demand. We partner with professionals in the NDIS sector to ensure that your investment in an SDA home is as meaningful to your portfolio as it is to the NDIS participant living in the home.

To work with specialists in sourcing NDIS housing, who only research areas with strong capital growth fundamentals, connect with the team at Apollo Investment.

Get in touch with our team for more information now.

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