How Long Do SDA Prices Last – 20 Years for New Build Then Existing Stock Pricing
How Long is SDA Here For?
The NDIS has based pricing on ensuring a return for 20 years, after which they still have priced the SDA payments way above market to encourage people to keep their property as SDA.
New Build Price for 20 Years
The new build price is for 20 years. Below is the table from the SDA Pricing Guide
| Building Type / Design Category | Basic | Improved Liveability No OOA | Improved Liveability With OOA | Fully Accessible No OOA | Fully Accessible With OOA | Robust No OOA | Robust With OOA | Robust +1 Room | High Physical Support No OOA | High Physical Support With OOA | Innovation
Funded as trials and/or new design categories added over time |
| Apartment, 1 bedroom, 1 resident | NA | $35,605 | $41,541 | $57,489 | $67,072 | NA | NA | NA | $76,255 | $88,965 | NA |
| Apartment, 2 bedrooms, 1 resident | NA | $42,391 | $49,456 | $70,028 | $81,699 | NA | NA | NA | $94,881 | $110,694 | NA |
| Apartment, 2 bedrooms, 2 residents | NA | $16,562 | $19,322 | $30,214 | $36,050 | NA | NA | NA | $42,806 | $49,940 | NA |
| Apartment, 3 bedrooms, 2 residents | NA | $22,128 | $25,816 | $40,327 | $47,048 | NA | NA | NA | $58,019 | $67,689 | NA |
| Villa/Duplex/Townhouse, 1 resident | NA | $25,078 | $27,736 | $38,654 | $42,537 | $45,548 | $50,295 | NA | $52,338 | $56,744 | NA |
| Villa/Duplex/Townhouse, 2 residents | NA | $15,696 | $16,944 | $23,918 | $25,804 | $28,546 | $30,835 | $1,926 | $33,565 | $35,684 | NA |
| Villa/Duplex/Townhouse, 3 residents | NA | $12,820 | $13,669 | $20,365 | $21,627 | $24,748 | $26,273 | $1,283 | $29,437 | $30,848 | NA |
| House, 2 residents | NA | $22,922 | $24,171 | $31,324 | $33,210 | $36,568 | $38,857 | $1,926 | $41,424 | $43,544 | NA |
| House, 3 residents | NA | $18,016 | $18,967 | $26,468 | $27,882 | $31,100 | $32,785 | $1,418 | $38,868 | $40,577 | NA |
What Does the SDA Payment Look Like After 20 Years
The Table below is for EXISTING stock, the price that you would get today if you had held SDA property 20 years ago and your property just turned 21.
| Building Type / Design Category | Basic | Improved Liveability No OOA | Improved Liveability With OOA | Fully Accessible No OOA | Fully Accessible With OOA | Robust No OOA | Robust With OOA | Robust +1 Room | High Physical Support No OOA | High Physical Support With OOA | Innovation
Funded as trials and / or new design categories added over time |
| Apartment, 1 bedroom, 1 resident | $19,853 | $20,293 | $23,676 | $34,450 | $40,193 | NA | NA | NA | $53,637 | $62,577 | NA |
| Apartment, 2 bedrooms, 1 resident | $26,219 | $26,758 | $31,218 | $44,749 | $52,207 | NA | NA | NA | $69,751 | $81,376 | NA |
| Apartment, 2 bedrooms, 2 residents | $8,447 | $8,718 | $10,171 | $17,713 | $20,665 | NA | NA | NA | $30,215 | $35,250 | NA |
| Apartment, 3 bedrooms, 2 residents | $13,143 | $13,491 | $15,741 | $25,426 | $29,664 | NA | NA | NA | $42,808 | $49,942 | NA |
| Villa/Duplex/Townhouse, 1 resident | $10,037 | $10,302 | $12,304 | $17,231 | $19,339 | $21,400 | $24,022 | NA | $28,602 | $31,377 | NA |
| Villa/Duplex/Townhouse, 2 residents | $5,308 | $5,484 | $6,457 | $9,772 | $10,796 | $12,559 | $13,822 | +$1,064 | $17,555 | $18,889 | NA |
| Villa/Duplex/Townhouse, 3 residents | $4,296 | $4,450 | $5,100 | $8,328 | $9,013 | $10,957 | $11,798 | +$708 | $15,601 | $16,490 | NA |
| House, 2 residents | $6,113 | $6,241 | $7,215 | $10,544 | $11,569 | $13,687 | $14,950 | +$1,064 | $18,714 | $20,048 | NA |
| House, 3 residents | $4,691 | $5,597 | $6,325 | $9,916 | $10,683 | $12,710 | $13,641 | +$783 | $19,493 | $20,569 | NA |
| Group home, 4 residents | $5,788 | $5,973 | $6,528 | $9,963 | $10,548 | $12,600 | $13,305 | +$594 | $18,727 | $19,537 | NA |
| Group home, 5 residents | $4,649 | $4,798 | $5,237 | $8,524 | $8,987 | $10,880 | $11,438 | +$469 | $16,570 | $17,208 | NA |
Existing Stock Price is Still Outstanding
If you rented a 1 bedroom (or a 2 bedroom that you allow someone who’s approved for a 1 bedroom as NDISP does) today you would get
$88,965 per year, plus CPI for 20 years
In 21 years time that would drop to
$62,577 plus the CPI you had gain. Still a great return.
If we apply our currently low CPI of 1.8% as the average CPI over 20 years
In 20 years time you would be getting
$127,108 per year
in 21 years time this would drop to
$89,406 per year (almost what you started at)
How’s that Compare to General Property
While that is a significant drop, compare to normal rent,
a new 3 bed unit in Holland Park is advertised on RealEstate.com.au at $540 per week. I have used a 3 bed because they are larger. An SDA unit is dearer than a normal unit but is the size of 3 bed unit.
$28,080 per year now
$40,119 per in 21 years time.
That is almost $50,000 less than the SDA unit, significant time to forget the extra cost from the build.
Sourced from the SDA Position Paper on Pricing
From top of page 19.
The timeframe for the pricing has also been aligned with the expected investment horizon of institutional investors (20 years). To recognise the uncertainty associated with retaining participants for more than 20 years, the pricing model conservatively assumes that at the end of 20 years the property would revert to the general market, providing a lump sum cash flow to the investor equal to the (non-SDA) market value of the property. When combined, the revenue from SDA payments, reasonable rent contributions and the sale value of the property will be sufficient to recover the initial investment, all maintenance, outgoing and management costs, and an ‘institutional’ return on debt and equity.
The new build pricing will only apply for a period of 20 years. At the end of the 20-year period, and the property remains occupied, the pricing will revert to ‘existing stock’ prices, which will provide a superior return to the general rental market and encourage property owners to retain the property as SDA.
