As Covid-19 continues to dampen investor interest in commercial assets, confidence in the emerging disability accommodation market is ramping up.
Recent federal government reform and institutional investment has stimulated the construction and supply of specialist disability accommodation (SDA) properties, with around 3,000 dwellings complete or in development across the country.
Confidence in the market is key to the mobilisation of private capital, which relies on a well-funded private sector to deliver much-needed housing for the more than 28,000 Australians with a disability.
“The SDA market remains in its infancy and there is much more to do to create an SDA market that delivers the scale of housing anticipated,” Summer Foundation chief executive Di Winkler said.
Barney Oros, a non-executive director at specialist housing provider DPN Casa Capace says the flight-to-quality in an uncertain economic landscape has improved the funding outlook for the sector.
“All roads lead to funding,” Oros said.
“We need the funders to get comfortable with the product and with a valuation methodology that values the product differently to other asset types with a low interest rate requirement,” Oros said.
DPN Casa Capace’s $60 million first tranche, set to deliver 80 dwellings for 86 people, was secured by fund manager Brightlight with funds from Christian Super, high-net-worth individuals and bank debt.
Both Oros and Winkler will join a panel of disability housing advocates and experts at The Urban Developer’s Disability Housing and NDIS summit later this month.
The SDA market, which is slated to become a $5 billion asset class, is regulated by the NDIA and NDIS Quality and Safeguards Commission.
In June, the federal government announced changes to SDA rules to allow more flexibility for eligible participants to choose their living arrangements.
“We are improving the range of options available to participants who have SDA in their NDIS plans, while also stimulating growth in the SDA housing market,” NDIS minister Stuart Robert said.
“The changes will improve choice for eligible NDIS participants, build market confidence and drive stronger investment in SDA across Australia.”
The National Disability Insurance Scheme, which is now in its fourth year, will support $700 million in specialist disability accommodation payments annually.