A performance-led market is following the construction-led cycle. Australia’s new-build SDA market has moved into its next phase. Recycling capital, realising development profits, and refinancing from construction finance into lower-cost holding finance are becoming increasingly important features of the market.
Enrolled dwellings have grown strongly, but not evenly
National enrolled dwellings grew from 7,925 in Q4 2022-23 to 13,779 in Q3 2025-26 — a 74% increase over less than three years. However, aggregate growth does not tell the full story. The volume of poorly located, poorly matched or underperforming stock can obscure the strong performance of quality SDA developments in the right locations, with the right providers and participant pathways.
Funded-participant demand and supply are misaligned by state
Of 25,633 nationally funded participants, 16,263 are actively using SDA. Victoria and New South Wales are the only states where funded participants exceed enrolled dwellings. However, a material proportion of funded participants appear to have SDA funding levels that are not commercially viable for immediate deployment into most new-build SDA settings.
Funding commitments are behind schedule
Total annualised SDA funding nationally stands at approximately $653 million in participant plans. This remains materially below the level originally anticipated for the SDA market and is a key reason why supply, demand and investment outcomes have not developed evenly.
Provider agreements can be a transaction risk
There are 563 active SDA providers nationally. However, only a small proportion appear to have the infrastructure, systems, participant networks and operational depth required to consistently support premium asset performance. Provider structure, agreement quality and operating performance can materially influence value, liquidity and transaction risk.
A two-speed market has established itself
Assets in high-demand corridors with stable providers, strong occupancy and reliable income are attracting institutional capital and supporting tighter pricing. Assets in oversupplied or provider-thin markets are experiencing vacancy risk, income uncertainty, capital fatigue and increasing motivated-vendor activity. Some of these assets may still meet investment objectives, but they are being priced by the market according to their actual performance and risk profile.
2026 outlook: performance-led, not construction-led
The development pipeline is moderating. The SDA market is transitioning to a phase where occupancy, provider stability, participant funding and income certainty will determine asset value. For investors and vendors, the window for positioning ahead of broader market recognition of this bifurcation is narrowing.
The implication is clear: SDA value in 2026 and beyond will be determined less by enrolled pricing and more by operating evidence. Occupancy, participant funding, SIL depth, provider quality and actual income are now the variables that separate saleable assets from impaired ones.
Source: SDAHC Research, SDA Market Report 2026. Figures reflect the most recent available NDIS data as at Q3 2025-26. See our methodology and data sources.