Australia Spends $527 Billion on NDIS. I Turned Down Every SDA Housing Deal That Came My Way. Here Is Why.

Every Australian taxpayer contributes roughly $3,560 per year to the National Disability Insurance Scheme. That is more than we spend on national defence. The 2025-26 budget allocation for NDIS sits at $527 billion — a number that was supposed to cap at $220 billion when the Productivity Commission modelled the scheme a decade ago 1.

I am not here to argue that disabled Australians should not receive support. They absolutely should. What I am here to do is pull apart the investment ecosystem that has grown around NDIS — specifically SDA (Specialist Disability Accommodation) housing — and explain why I have refused every opportunity that has crossed my desk.

This is personal for me. I earn money through property. I believe in property as a wealth-building tool. But I have a principle: I do not make money from the vulnerable. Old people, sick people, disabled people — their money is not mine to take. Call me superstitious. I believe in cause and effect.

Where $527 billion actually goes

The NDIS was designed to provide individualised support for Australians with permanent and significant disability. When the Productivity Commission originally projected the scheme in 2011, they estimated a maximum of 475,000 participants. The budget was set at $220 billion 2.

Today, 739,000 people are on the scheme. The budget has more than doubled. At its peak, the annual growth rate hit 22 percent.

Let me put that in context. What industry grows at 22 percent per year? Tech startups, maybe. Cryptocurrency exchanges during a bull run. Not a government welfare programme that was supposed to be capped and means-tested.

The expansion created an entire ecosystem of intermediary roles. Plan Managers who manage participant funding. Support Coordinators who help participants navigate the system. Capacity Building Specialists who deliver therapeutic services. Some of these roles exist because the system is so convoluted that disabled people cannot access their own funding without hiring someone to interpret the rules for them 3.

I have heard people describe this as a support ecosystem. I would call it a bureaucratic nesting doll. We are spending taxpayer money to pay people to help disabled people understand a system that was designed to help disabled people. The circularity is staggering.

The fraud problem nobody wants to quantify

In November 2020, the Australian Federal Police deployed 250 officers to raid 33 locations and seize 43 terabytes of data related to NDIS fraud. One Sydney man was charged with fabricating $3.5 million in claims using fictitious participants and forged medical reports 4.

In a single year, the NDIS Quality and Safeguards Commission blocked $86 million in fraudulent invoices. Nearly 1,000 provider companies had their payments frozen 5.

These are the ones they caught. The actual fraud figure is certainly higher — every auditing body that has examined NDIS has flagged systemic weaknesses in provider verification, invoice validation, and outcome measurement.

And here is the part that makes my blood pressure rise: while providers are extracting millions in phantom claims, actual disabled Australians are spending twenty hours a week filling in forms to access the services they need. I had a tenant come to an open inspection recently — she walked with visible difficulty. I asked why she had not applied for NDIS support. She told me she tried. The system said she did not qualify.

The incentive structure is broken. The system rewards billing volume, not outcomes. Providers who generate more invoices get paid more. Providers who actually improve participants' quality of life? No measurable difference in their revenue.

SDA housing: the investment pitch

This is where property investors get pulled in.

SDA — Specialist Disability Accommodation — is a category of NDIS funding that pays for purpose-built housing for people with extreme functional impairment. The government pays the rent directly to the property owner. Returns of 8-15 percent are not uncommon, because the SDA payment rates are set by the NDIA at levels well above market rent 6.

On paper, this looks irresistible. Government-backed tenant. Above-market rent. Social impact feel-good factor. Property developers started building SDA-compliant homes specifically to capture this funding. They pitch them to investors as turnkey packages: buy the property, we will find an NDIS participant, the government pays you $1,200 a week.

So why did I say no?

Three reasons.

First: the provider chain is opaque. Between the investor, the tenant, and the government, there are typically two or three intermediary companies — the SDA provider, the support coordinator, sometimes a separate property manager. I have no visibility into whether those intermediaries are operating ethically. Given that 1,000 companies were frozen for fraud in a single year, the probability of accidentally being involved in a compromised supply chain is not trivial.

Second: SDA funding rules can change. The NDIA has already reduced SDA payment rates in several categories. If the government decides the returns are too generous — and at 15 percent, they objectively are — a rule change could cut your income by 30-40 percent overnight. You cannot negotiate with a government payment schedule the way you can negotiate with a private tenant.

Third: the exit strategy is terrible. SDA properties are purpose-built to specific accessibility standards. If NDIS funding changes or your provider collapses, you are left with a property that has limited appeal to the general rental or sales market. You cannot easily convert a fully wheelchair-accessible, high-physical-support dwelling into a standard family home 7.

What I invest in instead (and why it sleeps better)

My investment approach at PremiumRea is boring by comparison. We buy standard residential houses in established suburbs with strong population growth and constrained land supply. The land component must represent at least 80 percent of the purchase price — our non-negotiable rule 8.

A typical acquisition: $650,000 house on 600-plus square metres in Melbourne's southeast. After light renovation or a granny flat addition, we achieve $800-$950 per week in rental income. That is a 6-7 percent gross yield without any government dependency, without intermediary providers, without opacity in the supply chain.

Our Hampton Park case study is a good benchmark. Purchase at $590,000, light structural renovation, CBA desktop valuation at $670,000, rented at $850 per week. The yield is driven by genuine market demand — families who need affordable housing in suburbs with good schools, public transport, and employment access 9.

The returns are lower than SDA on paper. But they are real, sustainable, and entirely within my control. I know my tenants. I know my property managers (we run our own PM team at 1:50 ratio, not the industry standard 1:170). I know that if one tenant leaves, another will replace them within two weeks because vacancy rates in our target suburbs are below 1.5 percent 10.

I do not need to wonder whether my income stream depends on a government programme that is growing at an unsustainable rate and haemorrhaging fraud.

The bigger picture: what NDIS tells us about government-dependent investments

NDIS is not an isolated case. Every government-linked property play — student housing, aged care, defence housing — shares the same structural risk: your income depends on a policy decision made by people who are not accountable to your financial outcome.

The NDIS was a good idea executed poorly. The original intent — giving disabled Australians genuine choice and control over their support — is admirable. The execution has created a $527 billion system with insufficient oversight, perverse incentives, and a growing fraud problem that diverts resources from the people who need them most 11.

As an investor, my job is not to fix government policy. My job is to build portfolios that generate reliable returns for my clients without exposing them to risks they cannot control or even see.

SDA housing exposes you to policy risk, provider risk, and ethical risk — simultaneously. The returns look attractive until you account for those factors. And if the system is eventually reformed (as it should be), the investors holding purpose-built SDA stock will be the ones absorbing the adjustment 12.

I earn money from property. I always will. But the vulnerable are not my revenue stream. When people ask me about NDIS housing, I tell them what I have told you: the returns might be real, but can you verify the entire chain from government to tenant? If you cannot, you are not investing. You are speculating on someone else's ethics.