Emelitta Da Silva: 0:08

Welcome to the NDIS Property Australia podcast. Before starting this episode, we need to provide a general disclaimer. Information contained in this podcast is general in nature only. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on the information in this podcast, and you should consider seeking independent and professional advice for your personal circumstances. All right, let's begin.

Minh Le: 0:43

Today we are going to be exploring the stats and data behind the research involved with the NDIS in terms of the SDA sector. This is a very complex and very complicated field of information. And we will do our best to cover some of the important facts relevant towards helping you, our investors, decipher the relevant information to help you on your property journey. Today's podcast is all about looking at the facts and the figures and the forecasts with regards to the coming years ahead. And hopefully, the information that we present you today isn't going to be too overwhelming. This podcast today is broken up into two different parts. The first part will be this podcast, and it will cover roughly 15 to 17 minutes worth of data. We will split this podcast into two sections so that if you want to continue to listen to the next podcast, we'll have more information to break down. Th e roughing is continuing on from the information presented today. We have been very focused on helping our clients understand that investing in the NDIS sta property market isn't all about high cash flows. And how you were high yield returns. It's important to understand that there is a massive need in the community for disabled participants who have nowhere to go and are currently living in nursing homes, hospitals, group homes and their own families that are not fit for purpose. And the importance of the data today that we present is all about helping you understand that if you understand the data in front of you, and the forecast that will occur, then that will help assist you with your decisions on what to invest in, where to invest in and how to invest in it. As the time goes on, as you listen to more podcasts in our podcast library, you will understand the different concepts and different information that we present to you, our investors to make better decisions. The market is all about providing dwellings in the SDA property market for all categories of participants. Improved liveability is very important because it is covering 70% of the marketplace. And so to are robust participants and fully accessible participants. A lot of the data we talk about in the future podcasts as well will cover the HPS – high physical support – data because that seems to be the focus of a lot of the sophisticated investors, the fund manage institutions, and of the investors currently going into the marketplace for SDA. So just because we cover a lot of the HPS information in today's podcast, or the next few ones down the track, doesn't necessarily mean we as a business index, probably Australia are all about promoting only HPS products to investors. We do promote the diversification mentality and concept for our investors to diversify their portfolios, reduce their risk, and consider other alternatives in the SDA pool of products. In saying so let's move on to the next topic or the first topic being HPS. We've been working with many investors across Australia with HPS, high physical support, and we've noticed a certain trend, which is pretty clear to our industry, that a lot of investors are seeking the higher yield higher cash flow properties. This being the accessible homes wheelchair homes for high physical support. Unfortunately the the market in the NDIS sector of which there are 500,000 people in the in the NDIS as participants, and of which there are estimated forecasts to be 6% of these participants being SDA high needs that would equate to 30,000 in the long term, minimum. Currently there are 17,000 participants who are already SDA funded are the living in legacy homes, groups homes or SDA properties, dwellings. And these dwellings are either apartments houses, villas, duplexes, and whatnot. So at the moment of the demographic of 17,000 participants who are already fully funded for SDA, which there should be at least approximately 30,000 people all up. 70% are in the improved livability demographic. 10% would be the Robust category, and the remaining 20% are the fully accessible and high physical support category. At the moment, majority of our investors, well majority of all the investors in the market, are chasing after the hard physical support. And we do encourage all investors who talk to us to consider the other options, not always chasing HPS but rather the improved livability, the robust, the fully accessible designs. They are the most desired design homes as per the requests of SIL providers and housing providers because they are aware of the demand in the marketplace in the in the sector for the NDIS for these homes. Speaking of the dwellings and homes in the marketplace as of August 2021, the breakdown of the three most concentrated states being Queensland, Victoria, and New South Wales are as follows. The estimated number of SDA places and dwellings will be for Queensland 462 dwellings with 681 places, and that's a ratio of 1.47 participants per dwelling. With Victoria, there would be estimated places of 406, dwellings, sorry 416 dwellings, which covers for 559 places for participants, and that's a ratio of 1.34. And New South Wales, the total dwellings, SDA dwellings would be 408 with a placement of 585 participants with a ratio of 1.43. So that's a rough indication of the number the average number of participants per dwelling. And as we can appreciate the different dwelling types being single occupant apartments with only one participant only, with a three bedroom home, whether it's you know, whichever category it is, would be one carer plus two participants, with a four bedroom home being carer plus three participants. For a duplex, you'd have two different sides to both two sides, sorry on each side with one carer plus one participant and one carer and one participant participant on the other side, so that's one and one. And it could be with duplexes carer plus two on one side and carer plus two. So as an overall average, I think one of our research reports shows that there were 1.8 1.9 participants per dwelling. And moving on from that, let's discuss the stats and trends in the SDA market. We, there was a recent urban developer summit online with all the professionals in the NDIS market who were associated with the SDA sector. The there was a speaker talking about how the average vacancy rate across the entire SDA market in Australia was about 2.3% vacancy. We often get inquiries from customers asking what is the vacancy rate and it's at the moment it seems to be 2%. It's hard to give real statistics, live statistics because the market is still in its infancy. The market of SDA/NDIS only began three years ago across Australia and really one year ago in in Western Australia. And all the products or all the dwellings coming out of market from being apartments or houses or whatnot they they only really six to nine months completed now. So the statistics of turnover or vacancy, resales is often hard to to calculate because the marker is all too new. The so with with the SDA being still in its infancy it's there is no real long term trend. We definitely see long term a definite flight to quality property from a participants perspective. All the dwellings that have been built to the minimum standard thus far, they will probably have a higher vacancy rate in the longer term as participants become aware that they have a choice and control of of who looks after them and where they live. And obviously as as more products and more properties come out in the SDA market which are future proofed to be better quality, then you will see more participants gravitate towards those those properties for rent in the SDA market, than living in a standard average, minimum, SDA compliant house or unit. The the, the rollout of products for the last two or three years has been pretty much 60% of all new stock is HPS. And we and that is a trend, which we'll definitely see the marketplace become more mature and saturated in the coming years. A lot of investors both corporate fund managers or sophisticated investors and mum and dad investors have really focused towards that higher yield higher cash flow investment of SDA being the high physical support. Our only advice to investors long term is consider don't assume a maximum return of three HPS's that is a common theme but a lot of people who are going into the marketplace, assume that you have a variety of different mix of tenants being improved livability plus FA, fully accessible, and HPS. The base of the forecast I mean at the moment we're just in January 2022. We've just just early January sorry just past we've reached the milestone of 500,000 participants in the NDIS. Now those participants of 500,000 are based off SIL and SDA participants. So remember in our earlier podcast, we mentioned that 6% of the entire NDIS market is high needs SDA participants and the rest 94% will be SIL participants. So we are already at 500,000 in 2022 January and it is expected to see the number rise to about 870,000 by the year 2030. So with that in mind, 870,000 at 6% SDA concentration rate average. We're looking at probably around about 50,000 participants in the SDA market out of the 870,000 by 2030. So that would require 50,000 places with an average of 1.9 or 2.0 participants per dwelling. We will require 25 to 30,000 SDA dwellings in Australia to be produced in total in the coming eight years. So here we are at 2022 with a I think the total of...In 2020 the statistics were just under 1800 new SDA dwellings supplied to the market. So there's a that's I think the total number is the total number of SDA dwellings as of June 2021 is approximately 6200 dwellings, right, so of the 6200 dwellings, 1766 of the 1800 I mentioned just then, are the new product supplied to the marketplace. So from the 25, 30,000 dwellings that are required for the SDA market in the next eight years by 2030. We are only at 6000 dwellings so far, right. And of those 6200 dwellings. They're not necessarily the latest SDA produced product. There's still a lot of legacy and group homes in there. And a lot of participants are still in the hospitals and nursing homes, as well as living at home with mom and dads as well. Speaking of legacy products, it was mentioned in the recent webinar that the legacy products being the older home older style homes prior to the NDIS are being defunded and participants choices are now growing and there will there is definitely more movement of participants nowadays over into the SDA sector from the legacy and SIL housing. A lot of the improved livability participants are sitting in SIL housing, and they are just waiting for either they're not aware of SDA being themselves or their families. But also most of the point now theres so product out there because as we know, in the housing boom, the last two years in Australia, there is no land out there in Sydney, Melbourne and Brisbane. There's minimal land access. And as a result, the pipeline of product being built is taking longer to produce because it takes a year to a year and a half to produce a house on land product for NDIS SDA. So legacy homes have participants participants who are still undecided with regards to their future where they're going to live. And that's about 77%. And of the people, and they're probably three to five more years away from actually deciding to cross markets from group homes and legacy homes into the proper SDA homes. The investor market is becoming more sophisticated. There's about 17,000 participants who are pre NDIS who are living in not not, they're not living in their living in homes that are not fit for purpose. So a key key phrase that you'll often hear in the SDA NDIS commentary online or in other podcasts, these are the words, fit for purpose, and choice and control. So if you're living in an older home, older style home, which well first of all, if you're living in a nursing home and its not fit for purpose in a hospital not fit for purpose, you're living in at home with your... If a participant is living at home with their mom and dad, that environment isn't fit for purpose, right? Particularly if the parents are aware, the parents are aware that they they're not going to be around forever. And they they there needs to be a backup plan for their children or child to live in an environment whereby they are being looked after appropriately in a disability home or environment. And with the government funding in place with SIL funding and SDA funding. This programme was one of the world's first this NDIS programme allows for people with disabilities to have that that choice and control of how they live and who they live with. Right. So the choice to choose their own care provider, the choice to choose in a way their own housing provider if the product is there, but how they live their life to have more independence. And you will come across as a as a investor I assume you will come across more commentary online about the words SDA, MTA, STA as well short term accomodation, which is different from specialist disability disability accomodation. Okay. I know that the this podcast today is all about statistics. And I want to keep on going through it all because it is a bit of a bit to absorb. But right now there's between 15,000 - 17,000 SDA funded participants. And there's basically right now, based on the 30,000 target or goal there's a 12,000 shortfall for dwellings. But yeah, but in the next easily the next three years from now being 2025, we should have 50,000 participants who are SDA should be SDA qualified or earmarked. So the market is still in its infancy there's a lot of maturity to go in the marketplace for the SDA market, more and more investors are coming into the marketplace to to seek those investment returns. And I'm sure that you know, we all want to have as investors to have a social impact on the community. And it's our job as consultants in, in this marketplace, to work with peers, our peers being other other advisors, other builders, other developers and and to you as listeners, the investors to bring more awareness and bring more clarity towards the statistics behind the trend or the lack of trend in this marketplace. There are you know, we won't talk too much today, but there are certainly issues like valuation problems with funding or finance lenders that needs to be overcome. And then also the challenge of working with building the right design product in the right area at the right time as well. The the institutional investors who've been in the marketplace for the last one or two years, they all have a exit strategy as well. And their goal is to produce more no the the HPS apartments and HPS houses in a line of 10 or so hold it for 10 years or so. 10 or 12 years and exit from there. So everyone has everyone has an exit strategy as well. And we advise all all clients or investors to also consider what their options are because you can always assume that the most rent coming back in the most in the most timely scenario because maximum return and minimum vacancy is is ideal, but it may not happen the way you expect it to be. Look, I want to I want to end it here and I go too further on the on the statistics and demand here. But there's certainly a lot more information which we want to talk about in the coming podcasts. And I want to welcome more of our team in our in our business here of NDIS Property Australia to talk to do clients if they want to ask questions. We're here to help everyone who wants to be part of the the social impact of NDIS and SDA and we encourage you to talk to us and call us our office. Our number is 1300254397 and it's NDIS Property Australia. Happy to talk to you more about more information in the coming few podcasts. But for now, I'll definitely sign off on this. This overwhelming, this is a session of statistics on supply and demand. And we'll cover more of this in the coming coming podcasts as well. Signing off. Thank you very much and have a lovely day.