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Unpacking the Results of the SDA Pricing Review for NDIS Property Investment

The Specialist Disability Accommodation (SDA) Pricing Review for 2022-23 has just unveiled its results which we believe will be of interest to existing and potential SDA property investors like you.

Get ready to explore the key findings with us.

The power of specialist disability accommodation (SDA)

SDA properties have proven to be more than just a potentially lucrative investment. The SDA pricing review recognised that SDA properties play a crucial role in supporting individuals with disability, promoting social welfare and contributing to the long-term sustainability of the National Disability Insurance Scheme. By investing in SDA, you’re not just giving yourself the potential to access high rental yields but also making a difference in people’s lives, reducing lifetime support costs, and easing the burden on hospitals. These properties empower young individuals to move out of aged care facilities and into a forever home where they can access better living and social engagement.

More than just social value

The SDA pricing review has resulted in a significant surge in SDA prices across various SDA categories. Certain dwellings have experienced a doubling in price compared to previous rates. Furthermore, funding and support have been enhanced for more customised SDA projects.

What else did the report uncover?

  • Fire sprinkler costs are now adequately covered, and it is suggested that they will be made mandatory.
  • Group homes with 4–5 bedrooms will experience higher pricing.
  • There is a suggestion that indicates the government’s growing openness to the concept of SDA self-provision.
  • Encouragement for sustainable features such as funding for installing solar power and batteries. 
  • The indexation of participant plans and Annual Benchmark SDA amounts in line with the Consumer Price Index (CPI).

How will SDA prices affect my investment?

Pricing determination

The pricing determination of your SDA property may be slightly harder to arrive at, given that as of 1st July 2023, SDA prices now take into account the GST position of the property’s delivery. Depending on GST input tax credits claimed for construction costs or the purchase price, this could influence your pricing.

Important to note: While the updated pricing arrangements became effective on 1st July 2023, the actual implementation date has been deferred until 1st October 2023 to allow sufficient time for operational implementation.

SDA prices

For existing SDA owners, the significant increase in the pricing of most SDA properties may be welcome news as it potentially increases the capital value of the existing investment. For prospective SDA investors, it may mean that the financial benchmark for accessing an SDA investment has risen, however, the report did release some downward price changes, also. In fact, the SDA pricing review outlined that there is a high level of variability in the individual SDA price changes, dependant on design category, build type, and location factor.

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Let NDIS Loan Experts assist with the numbers

The SDA pricing review solidified the socially-focussed outcomes that the SDA market makes possible within Australia, however, it also pointed to added complexity when it comes to pricing the properties themselves. When embarking on an NDIS property investment journey, you’ll need experts on your side.

That’s why we encourage you to reach out to the NDIS Loan Experts team to ensure that you have a lending solution that supports your investment to support others!

Frequently asked questions about investing in SDA properties

What is SDA funding?

SDA funding is the government assistance provided to SDA providers to help cover the build and maintenance costs of the specialist disability accommodation dwelling.

Who are SDA properties designed for?

SDA dwellings are purpose-built homes designed to provide the necessary provision for Australians with extreme functional impairment and/or high physical support needs.

What is the interest rate on an NDIS loan?

The interest rate that will apply to your NDIS loan is influenced by many factors, including your loan-to-value (LVR) ratio, the strength of your application, market conditions, property price and loan structure. The team at NDIS Loan Experts provide transparency every step of the way.

Can I use the existing equity in my property to invest in an NDIS property?

Leveraging equity tied up in an existing property’s value is one of the ways that may be available to you to invest in a specialist disability accommodation property. Talk to our team for more details.

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