NDIS Property in Victoria: S48 & S100 and Change of Circumstances in SDA Housing

Securing tenants, managing funding delays, and avoiding oversupply risks require strategic planning. Investors who fail to anticipate these issues may face longer vacancy periods and financial setbacks.

One of the biggest concerns is funding approvals for tenants. Many participants interested in SDA housing do not have full SDA funding in their NDIS plan when they start looking for a home. This means they must go through an S48 plan review or, if denied, an S100 appeal, which can extend the waiting period by several months. Investors who expect immediate tenant placement may struggle with unexpected delays in rental income.

Some suburbs, particularly in western Melbourne, have seen a rapid increase in SDA developments. The assumption that every property will immediately secure tenants has led to many vacant homes sitting in oversupplied areas. Properties in high-growth regions with strong NDIS infrastructure and a lower concentration of competing SDA dwellings are far more likely to attract long-term tenants.

Also, SDA housing must meet strict design and accessibility standards to qualify for NDIS funding. While this ensures participants receive high-quality accommodation, it also means investors must work with professionals who understand the latest SDA guidelines. Non-compliance can lead to funding rejections, costly modifications, or difficulties in tenant placement.

Despite these challenges, a well-planned SDA housing investment in Melbourne can generate strong returns. Investors who take a proactive approach to tenant procurement, work with experienced SDA providers, and select locations with genuine demand can mitigate these risks.

Where Should You Invest?

The latest data reveals that some areas of Melbourne are facing a significant shortage of SDA housing, making these regions ideal for investment.

1. Western Melbourne
   Areas like Tarneit, Truganina, and Werribee have seen an increase in SDA properties in recent years. While these suburbs continue to experience growing demand, the high volume of SDA homes has led to significant oversupply. This can result in longer vacancies and a competitive market for tenant placement. 
   
   
2. Northern Melbourne
   Suburbs like Craigieburn, Epping, and Mickleham are seeing significant growth, with low competition for SDA housing compared to the oversaturated western suburbs. These regions are still considered up-and-coming, offering affordable land options and strong local infrastructure, including healthcare services and disability support.
   
   
3. Inner & Eastern Melbourne
   Suburbs like Preston, Boronia, and Glen Waverley are well-established areas that offer a stable demand for SDA housing. These regions are close to essential services like hospitals and public transport. While land prices may be higher, the long-term growth potential and tenant demand make them a viable option for investors seeking reliable returns.
   
   Inner and eastern Melbourne suburbs continue to see steady demand from NDIS participants, ensuring a consistent stream of potential tenants for SDA properties. These areas tend to have a more mature market, making it easier for investors to gauge expected returns and minimise risk.
   
   
4. Emerging Suburbs in Melbourne’s South-East
   Melbourne's south-eastern suburbs, including Dandenong, Narre Warren, and Berwick, are showing promising signs of growth, with increased government investment in transport, healthcare, and community services. These areas have become more attractive to NDIS participants looking for accessible housing close to essential services.

Though property prices in the south-east are rising, there is still strong demand for SDA housing in the inner South-East, especially as the market matures. Investors willing to enter these emerging areas early may benefit from long-term capital growth and strong tenant placement.

Hybrid Tenanting Models to Reduce Vacancy Risk

A useful strategy to reduce vacancy risks while waiting for full SDA funding approval is to consider hybrid tenanting models. By placing SIL tenants alongside SDA participants, investors can still receive rental income while waiting for SDA funding approval. This model helps cover property costs and ensures a more steady income stream until the tenant receives the necessary funding for SDA accommodation.

Another option is to lease the property to SIL providers even before SDA tenants are confirmed. While this may not provide full SDA income, it still provides reliable rental income while the funding process is ongoing.

Work with Experienced SDA Consultants

Working with experienced SDA consultants is one of the best ways to make well-informed investment decisions. These professionals can provide valuable market insights and guide you through the tenant procurement process. They also assist with selecting properties that meet participant needs and comply with NDIS guidelines, ensuring a higher likelihood of securing tenants quickly.

At NDIS Property Australia, we offer independent, expert advice without the sales pitch. Our team provides a comprehensive SDA advisory service, covering SDA research, development advisory, and project management. We can guide you through the process of in-depth data analysis and industry insights to provide up-to-date information on supply, demand, and participant funding in key regions.