Understanding SDA Housing in Australia: Challenges & Investment Opportunities
A guide to the intricacies of Specialist Disability Accommodation (SDA) in Australia. Explore the challenges, investment dynamics, and the pivotal role of NDIS in reshaping the disability housing.
The NDIS (National Disability Insurance Scheme) is a pivotal initiative in Australia, offering funding from various sources to cater to the fundamental requirements of individuals with disabilities. Presently, the National Disability Insurance Scheme (NDIS) serves over 610,000 Australians. This program has been assisting numerous individuals with disabilities, ensuring they receive the basic support they need, including access to suitable dwellings with their unique needs
In Today’s market, Australia faces a pressing need to address the under-supply of SDA housing, given the rising demand across the nation. Because of this, it has become more challenging to increase supply to keep up with rising demand. Navigating the intricacies of this challenge is no small feat, but it's imperative for the betterment of the disability community. Investors and builders alike have a golden opportunity to play a pivotal role in shaping a more inclusive housing landscape for all Australians.
Housing Shortage and Rising Demand
However, there is still a mass shortage of SDA housing providers due to facing difficulties due to the stricter guidelines and specifications for SDA (Specialist Disability Accommodation) housing. According to the latest NDIA data, there will be nearly 30,000 SDA places needed around Australia by 2032, but less than 7,000 places are currently available in New Build SDA homes. Because of this, it has become more challenging to increase supply to keep up with rising demand.
Why is there a shortage in the supply of SDA?
The primary obstacle to meeting SDA supply is the specialised nature of its construction. SDA housing necessitates unique designs and dedicated purposes for each Category such as Fully Accessible, High Physical Support and Robust, distinguishing it from conventional residences. This complexity poses challenges to developers unfamiliar with SDA-specific construction. Without the right certification, developers miss out on attracting tenants and the desired rental income. Additionally, there are financial barriers, with banks favouring completed SDA projects that guarantee high yields. However, they hesitate to fund construction due to a lack of understanding of the process 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.