A new joint venture will see $100 million invested into new specialist disability accommodation (SDA) over the next 12 months, helping to ease the massive undersupply of fit-for-purpose homes for NDIS participants. 

As part of the joint venture, CrowdProperty, Social Impact Funds Management (SIFM), and NDISP will create a wholesale fund with no maximum investment limit into new SDA builds. 

There is a dire shortage of SDA options for Australians living with disabilities. Of the 22,022 National Disability Insurance Scheme (NDIS) participants with SDA funding in their plans as of 31 March 2024, 7,934 are not currently using that funding, primarily because suitable SDA is not available in the market.  

Property-specialist marketplace lender CrowdProperty will raise diverse sources of capital to fund the SDA construction. CrowdProperty CEO, David Ingram, highlighted the clear opportunity for all kinds of investors in financing the building of fit-for-purpose SDA.

“SDA is in a class of its own as a real estate investment opportunity. First, we know it is in high demand because of the undersupply revealed by NDIS data and participant feedback. Second, there is a legislated commitment from governments to fund rental payments for NDIS participants who have SDA in their plans, and this commitment takes inflation into account. Finally, investors get the satisfaction of helping to provide homes for Australians living with disability, helping them to lead independent lives,” Ingram said. 

“This new fund will allow wholesale and institutional investors to efficiently deploy capital across a curated portfolio that supports ESG mandates,” Ingram continued. 

James Brooker, CEO of SIFM, emphasised the significance of the SDA asset class within the National Disability Insurance Scheme (NDIS), and the criticality of mobilising capital to develop new SDA properties.

"The primary objective of the NDIS is to enhance the independence and quality of life of Australians with disabilities. The most vulnerable participants of the NDIS require fit-for-purpose accommodation featuring robust, high physical support, and fully accessible amenities with the best locations, facilitating ease of living with market-leading automation," Brooker said.

"While there are currently 8,886 SDA residences registered with the NDIS, approximately half of them fail to meet the necessary standards to be considered fit-for-purpose. These include outdated group homes, which have been subject to criticism from the disability community due to their substandard living conditions. We advocate for participants to have choice and control to choose their living arrangements, whether it be independent living or shared accommodation," Brooker said. 

"As the expenses associated with the NDIS continue to escalate, it is imperative to recognise that a well-designed SDA is instrumental in improving the scheme's efficiency. The costs of care are significantly diminished when individuals reside in accommodations fostering independence. Conversely, in instances where suitable SDA options are unavailable, and individuals are housed in inappropriate settings such as hospitals or aged care facilities, the Government incurs unnecessary expenses while delivering inferior outcomes for Australians with disabilities," Brooker said.

Asked why more SDA hasn’t already been built, Ingram emphasised that limited access to capital is an issue weighing down on developers of rental accommodation in general. 

“In the last few years, banks have been withdrawing from small- and medium-scale residential developments, which has diminished the pool of capital available to finance the building of new homes. While this has put a dampener on the number of homes being built, from ordinary residential units to specialist housing like SDA, it also offers fresh opportunities for private investment,” Ingram concluded.