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Lenders and SDA housing investors have three things in common: they want to ensure they choose the right location where tenant demand is high and unmet, the right SDA home design category (we delve into Robust as an example in this article) and the most suitable property type e.g. apartments or houses to ensure their rents are optimised and there is plenty of income to cover the lenders' mortgage.
A common pitfall for SDA investors is the risk of extended vacancies, leading to financial strain and jeopardising the viability of their investment. To avoid this nightmare scenario, it is crucial to understand the nuances of supply and demand within specific disability categories.
Today we dig deeper into the Robust SDA market in Adelaide North and Perth North West, analysing which region presents a more favourable investment landscape.
We are comparing data from the September 2024 NDIS quarterly report.
Understanding the Robust Design Category
The Robust design category caters to individuals with significant intellectual disabilities or high support needs who could cause harm to the property, themselves, or those around them. Robust design reduces the likelihood of reactive maintenance.
Adelaide North: An Oversupply Looms
In the Adelaide North report, the forecast indicates a potential oversupply of 98 Robust rooms by March 2026. This oversupply stems from the significant number of Robust rooms currently under construction, with a disproportionate number being built within houses. The Adelaide North report emphasises that a large percentage of Robust participants may not be able to, or prefer not to, share accommodation. Consequently, many multi-bedroom Robust houses might only accommodate a single participant, further contributing to the oversupply. Despite this projected oversupply, Adelaide North offers a substantial number of existing rooms, including 324 Basic rooms and 4 Robust rooms, that might be retired or repurposed in the future.
Here is a table showing the forecast supply and demand for Robust SDA in Adelaide North:
Category | Forecast Demand (March 2026) | Forecast Supply (March 2026) | Forecast Shortfall (Oversupply) |
|---|---|---|---|
Robust SDA Rooms | 68 | 166 | (98) |
Physical Disability SDA Rooms | 777 | 861 | (84) |
Here's another table that breaks down the existing rooms in Adelaide North that are most likely to be retired:
Category | Number of Rooms |
|---|---|
Basic Dwellings (do not meet the criteria for any category) | 324 |
Legacy Dwellings (Robust Category) | 0 |
Existing Group Homes (Robust Category) | 0 |
Perth North West: Undersupply Persists
Perth North West presents a contrasting scenario with a persistent undersupply of Robust SDA dwellings. The forecast anticipates a shortage of 18 Robust rooms by March 2026. This undersupply is particularly notable considering the limited number of existing Robust rooms in the region. Furthermore, a significant percentage of participants in Perth North West are not currently utilizing their SDA funding. This untapped demand further strengthens the case for investment in Robust SDA housing in this region.
Here's the table showing the forecast supply and demand in Perth North West:
Category | Forecast Demand (March 2026) | Forecast Supply (March 2026) | Forecast Shortfall (Oversupply) |
|---|---|---|---|
Robust SDA Rooms | 37 | 19 | 18 |
Physical Disability SDA Rooms | 425 | 359 | 66 |
Here's another table that breaks down the existing rooms in Perth North West that are most likely to be retired:
Category | Number of Rooms |
|---|---|
Basic Dwellings (do not meet the criteria for any category) | 5 |
Legacy Dwellings (Robust Category) | 0 |
Existing Group Homes (Robust Category) | 0 |
Key Considerations for Investors
● Vacancy Risk: The oversupply of Robust rooms in Adelaide North poses a higher risk of vacancies compared to the undersupplied market in Perth North West.
● Property Type Preferences: Houses are the dominant property type under construction in both regions. However, investors should carefully consider the potential underutilisation of multi-bedroom Robust houses due to participant preferences.
● Existing Stock: Adelaide North has a considerable number of existing Basic and Legacy rooms that might be retired or repurposed, potentially impacting future supply dynamics. Perth North West has a negligible amount of existing stock.
● Untapped Demand: The high percentage of participants in Perth North West who are not currently utilizing their SDA funding presents a significant opportunity for investors.
Conclusion
The choice between Adelaide North and Perth North West for Robust SDA investment depends on your risk tolerance and investment strategy. Adelaide North's potential oversupply demands careful consideration of vacancy risks. However, the region's existing stock and potential for repurposing present opportunities for strategic investors. Perth North West's persistent undersupply and untapped demand offer a more favorable landscape for investors seeking to minimize vacancy risk. By understanding the distinct dynamics of each market, investors can make informed decisions and capitalise on the promising opportunities within the Robust SDA sector.