SDA New Build is a 20 year Classification

Stephen LazarInvestment PropertyLeave a Comment

How Long is a SDA Property Guaranteed for?

There is no Guarantee, how it works is once a new built dwelling receives it’s compliance certificate that dwelling is treated as a new build under the SDA Pricing Guide and is Classified as one for 20 years

You can read more here on the NDIS Government Site

SDA Pricing Model

In Summary, the time frame for the pricing has 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 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 … as quoted in the Specialist Disability Accommodation Decision Paper which goes on to say : When combined, the revenue from SDA payments, Reasonable Rent Contribution (RRC) 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, if 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.

SDA New Build Pricing Model

Leave a Reply

Your email address will not be published. Required fields are marked *

*