:format(webp))
A recent Four Corners investigation, called ‘Empty Promises,’ highlighted stories from a number of “Mum and Dad” investors who lost significant amounts of money investing in SDA properties. This devastating outcome was due to unscrupulous investment advisors, who misled people about the possible returns on investment in the SDA market. This led to the development of SDA in locations where people with disability don’t want to live and, because the houses had tenant vacancies, they didn’t receive enough NDIS funding to return a profit for investors.
However, as Jeremy outlines in the story, SDA was never intended for retail or “Mum and Dad” investors, who may not have the financial or industry knowledge necessary to fully assess the risks involved in investments of this type. This was highlighted in the foundation document called the ‘NDIS SDA Decision Paper on Pricing and Payments’ where it stated :
There is significant unmet demand for SDA, and it is unlikely that private individuals and not-for-profit organisations will have the capacity to finance and build the required number of dwellings within a reasonable timeframe without assistance from third party (‘institutional’) investors.
Despite this guidance, a small number of unscrupulous parties encouraged retail investment in SDA based upon misguided and, in some cases, blatantly incorrect, promises of government-backed returns. As the ABC story articulated, for some investors, the outcome of this investment has been disastrous.
The SDA market is reaching a critical stage in its evolution. We are starting to see the dodgy operators being exposed and pursued by the relevant government bodies, including the Australian Securities and Investment Commission (ASIC) and the NDIS Commission. We are also starting to see some of the SDA dwellings that were built in poor locations and/or to poor standards being sold off in the residential property market. As this evolution continues, we are hopeful that the SDA market will return to its original intention to deliver a vibrant SDA supply market that meets the needs of individual participants with severe functional impairment and/or very high support needs.
If you’re a retail investor who entered the SDA market and are now concerned, whether prompted by the ABC story or your own experience, there are steps you can take:
- Get the facts. SDA is not government-backed and it does not guarantee rental income. Returns depend on the property, design category and location being right for what the person with SDA funding wishes to have as their home.
- Do independent due diligence. Review official SDA information on the NDIS website, examine quarterly data releases and consult with established SDA providers and independent advisers (not just property promoters).
- Stress-test the numbers. Many projections assume maximum occupancy. But, in practice, aligning the right tenants with the right home takes time.
- Seek help if needed. If you believe you were misled, contact ASIC and the NDIS Commission (information and links below).
- Find reputable partners. If you don’t want to manage the investment yourself, investigate institutional SDA funds and reputable not-for-profits that provide governance and realistic returns.
The SDA market is evolving. ASIC and the NDIS Commission are taking action against poor practices, and there is still more work to be done regarding vacant homes in city fringes. Some of these properties will need to be repurposed for the residential market, as they were built in areas inaccessible and unsafe for people with disability.
But, at the same time, most institutional providers and investors (including not-for-profit and community housing providers) are delivering homes in communities where people want to live, with strong occupancy rates and positive outcomes for participants.
The bottom line is that SDA is not in systemic failure. It remains one of the most essential NDIS housing reforms. It also offers genuine opportunities for impact investment when done correctly. SDA can have a good future, but only if we address poor practices, prioritise participant outcomes in every project and make sure investors understand the risks and responsibilities associated with SDA.
Ultimately, SDA is about people with disability, who deserve safe, connected homes where they can live on their own terms.
Our collective goal is to create a robust, sustainable and sophisticated SDA market that supports individuals as they age. This means living in homes that fulfil both current and future needs, are located near amenities and community services and provide a welcoming environment for family and friends. To do this, we need to understand that SDA was never intended for retail or “Mum and Dad” investors. We need to partner with sophisticated impact investors, like institutional investors, to ensure outcomes are met for both the NDIS and, most importantly, people living in the homes.
For more information, check out:
- NDIS: Investing in SDA
Official guidance on SDA investment, market intent, and key considerations for prospective investors. - NDIS: Report Fraud
Report suspected fraud or non‑compliance relating to NDIS funding, providers or claims. - ASIC: Report Misconduct
Lodge a report of financial misconduct or misleading investment conduct with ASIC. - ACCC: Consumer Issues
Report or seek help on consumer problems including false advertising and unfair practices.
Artwork by Helen Maysey.
