The demand for specialist disability accommodation (SDA) is exceptionally high and has been for many years.
The demand for suitable rental homes for people living with disability has been driven by two main aspects; the undersupply of appropriate accommodation and the unaffordable nature of building suitable housing for people living on a disability pension.
Bank in 2019, the Royal Commission into Aged Care Quality and Safety discovered that around 6,000 young people with disability were living in Australian residential aged care facilities. In addition to this, there are a huge number of young people living in hospital facilities and remaining at home with their parents into adulthood rather than living an independent lifestyle in housing that suits their needs.
To increase the supply of SDA homes, the Australian Government introduced SDA funding under the National Disability Insurance Scheme. The aim of the funding is to provide investors with a larger than normal rental income for 20 years as an incentive to boost the SDA market. The hope is that enough people will invest in NDIS property to fill the huge gap supply gap.
Reduced Demand as Supply Increases
It’s basic economics that demand decreases as supply increases, so what does this mean for NDIS investment properties?
According to the Australian Institute of Health and Welfare, there are around 4.4million Australians living with disability. While not all of these people will be seeking a property to rent, many of them are. The Government is guaranteeing SDA payments for the first 20 years. After this time, the homes will still be rented at above-market prices, they just won’t be eligible for SDA payments.
On top of the government’s SDA payments, the NDIS participants — or tenants — pay 25% of their disability pension as the reasonable rent contribution.
While it’s natural to worry about the demand for specialist disability accommodation to decline, this isn’t likely to happen in the foreseeable future due to the sheer undersupply. With NDIS SDA payments guaranteed for 20 years, you’ll have plenty of time to decide whether you’d like to continue renting the investment property out after the initial 20 year period or whether you’d like to see it and enjoy its capital growth.
Desire to Live an Independent Life Made Possible Through Specialist Disability Accommodation
In addition to seeking an appropriate form of housing, NDIS investment properties are designed to fall into one of four SDA categories to suitably meet the tenants housing needs and provide assistive technology and features that help the participants live an independent life.
The four categories are:
- Improved livability
- Fully accessible
- High physical support
The design criteria exist to ensure quality homes are being built to suit a variety of needs.
Because these homes are specifically designed with certain forms of disability in mind, the houses are not only appropriate, but they’re desirable for Australians with disability. SDA housing doesn’t just provide a home; it gives a whole new lifestyle for the NDIS participants. Building a desirable home helps to keep the demand high.
A Perpetual Need for NDIS Property
The demand for SDA properties is currently extremely high. While it may taper off as more people invest in this area, there are always going to be people with disability looking for affordable homes that allow them to live the lifestyle they deserve.
Speak with NDIS Loan Experts today for consultation on SDA/NDIS Property Investment.