Recent changes in lending and market dynamics have had notable impacts on NDIS (National Disability Insurance Scheme) housing investments in Australia. These adjustments include increased demand for Specialist Disability Accommodation (SDA), altered financing conditions and shifts in pricing structures.

Key Impacts:
Rising Demand and Incentives:
Demand for SDA continues to grow, with more NDIS participants requiring tailored housing solutions. In 2024, Specialist Disability Accommodation (SDA) funding under the NDIS has seen significant growth, reflecting the increasing demand and commitment to providing high-quality housing for individuals with disabilities. Key changes include:
Annual growth in total SDA funding reached 32% over the past two years, increasing from $166 million to $290 million. The average SDA payment per participant also rose by 15% annually during this period
As of early 2024, the number of participants eligible for SDA increased by 12% annually, while total SDA supports within participant plans grew 29% year-on-year to $395 million
This is paired with a rise in SDA developments, with significant increases in high physical support and fully accessible housing designs
2. Lending Environment:
Specialist lenders have become crucial in financing SDA properties. Tailored lending options are being designed to address the unique needs of NDIS investors, helping navigate tighter general lending conditions.
At the beginning of October 2024, the specialist NDIS lenders in Australia, who receive wholesale funding from the same source, updated their lending requirements to ensure new applications now meet more stringent lending criteria including minimum income of $250,000 per annum or net assets of $2.5m. This was done to address general economic challenges, such as rising interest rates and construction costs and unchecked oversupply in some SDA categories and regions which require investors to be more cautious and strategic.
With much tighter lending criteria for SDA housing the level of supply will be greatly restricted compared to previous lending criteria that allowed investors to purchase an SDA home with an income between $50,000-$100,000 without evidence to show the SDA house they were going to build was likely to get NDIS participants on completion.
Pricing Adjustments:
The SDA Pricing Review for 2023-24 has recalibrated the base prices for various accommodation types, aligning them with construction and maintenance costs. This encourages diversification in investment types beyond the high physical support category.
With restricted supply due to tighter lending conditions and growing demand from NDIS participants, NDIS just got even better with unchecked oversupply being one of the key risks previously.
The biggest drawback is meeting the new lending criteria. If you would like to know more then click here to have a chat to our team to see how we can help you.
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