Enhancing Accessibility: Insights from the Specialist Disability Accommodation Pricing Review 2023

In an effort to improve access and outcomes for individuals with disabilities, the National Disability Insurance Agency (NDIA) recently conducted a pricing review.

This comprehensive evaluation, carried out in consultation with industry stakeholders, aimed to reassess pricing variables and mechanisms, ultimately guiding market investment and providing optimal support for participants. The below points will explore key recommendations from the review and discuss their potential impact on the disability accommodation market in Australia.

Base Price Adjustments: Emphasizing Diversity and Inclusion

The review recommends changes to the base prices for various types of accommodations. Notably, the mean funding for house-type structures will experience a substantial increase of 83.8%, while apartments will see a more modest increase of 16.7%. On average, base price funding across all types of accommodations will increase by 40.1%. These adjustments reflect a commitment to catering to diverse participant needs and promoting inclusive housing solutions.

Design Considerations: Prioritising Liveability and Physical Support

The review also highlights changes in base prices based on design types. Accommodations with an emphasis on improved liveability will see the largest mean increase of 105.3%, underscoring the importance of creating accessible and comfortable living environments. On the other hand, high physical support designs will have the lowest mean increase at 9.9%. These adjustments aim to incentivise the development of accommodation options that effectively address the specific needs of participants.

Location Factors: Balancing Regional and Metropolitan Markets

To address the distribution of disability accommodations, the review introduces changes in location factors across different states. Regional areas will experience a significant increase in funding, as will metropolitan areas in cities like Melbourne and Brisbane. The mean increase in location factor is 0.81%. These adjustments seek to promote a more balanced supply of accommodations, ensuring that participants have access to suitable options regardless of their location.

Other Key Recommendations: Fire Sprinklers, Vacancy Rates, and Market Stewardship

The pricing review also proposes a lump sum fire sprinkler allowance, accounting for adjustments of 1.8% to 8.7% across different types of accommodations. Additionally, revised vacancy rate assumptions aim to better capture initial vacancy and letting up periods. The timing of "New Build" funding will align with the provider's eligibility to claim an SDA amount for eligible participants. Furthermore, SDA Base Prices will be determined based on whether GST Input Credits have been claimed. Lastly, indexation of Annual Benchmark SDA Amounts and Participant Plans will occur in line with the Consumer Price Index (CPI). The review also calls for more accurate market stewardship and active supply/demand tracking by the NDIS.

The pricing review is expected to have several notable impacts on the disability accommodation market in Australia. With increased funding, there will likely be a surge in the development of Improved Liveability accommodations. Changes in apartment base price funding and regional location factors may shift supply and demand dynamics. Stakeholders can anticipate greater certainty, leading to increased transaction volumes and development activities, particularly in metropolitan regions. Adjustments in funding levels and factors, as well as considerations for tax status and fire sprinkler allowance, may influence market pricing and create separate economies. Overall, the review aims to drive improved quality in accommodation outcomes and incentivize tenant providers/operators to achieve better placement results for participants.

The Specialist Disability Accommodation Pricing Review marks a significant step towards enhancing accessibility and support for individuals with disabilities. Through an inclusive consultation process, the review has identified key recommendations that prioritize diversity, inclusivity, and balanced distribution of disability accommodations. As these recommendations are implemented, we can expect a positive change.

This blog is based on information provided by M3 Property, June 27 2023