Disability housing scheme collapses: investors lose millions

A Sydney developer who raised millions from investors to build housing for people with disabilities has gone bust amid questions over missing company money, in the latest failure to hit the National Disability Insurance Scheme (NDIS) housing program.

Liquidators say $5 million in cash was withdrawn from the company directed by Shaun Mowbray before it went under. The money was taken out in 10 separate transactions which the liquidators have been unable to verify as legitimate.

Mr Mowbray was declared bankrupt in July, with just $150 in the bank.

Investors left reeling

The failure of Fairy Meadow House Pty Ltd, named for the Wollongong suburb where it was supposed to be built, is the latest Supported Disability Accommodation (SDA) scheme to go belly up. Dozens of investors put a chunk of their life savings into the project before it went into liquidation in May.

Several of them were also caught up in the 2024 collapse of other SDA projects led by two other developers — David McWilliams as well as Aiden Garrison and his partner Will McKellar. Between Mr McWilliams, Mr Garrison and Mr McKellar, and now Shaun Mowbray, investors have lost more than $120 million.

Gregg Stadhams said he was looking at spending the rest of his life overseas because he could no longer afford to live in Australia. The retiree and former dentist lost $800,000 in SDA investments, mostly through the three companies.

"If the current economic situation continues to decline, which it appears to be, then within three to five years, living in Australia as a retiree becomes unsustainable," he said.

Mr Stadhams was looking at moving to South-East Asia or Eastern Europe where the cost of living was lower. He invested $100,000 in Fairy Meadow House in 2022, expecting to receive 10 per cent return on his investment per year before being paid out after four years.

"Finally we got the letter that [Mr Mowbray is] in liquidation, he's gone bankrupt, and the project itself has gone into liquidation," he said.

"Initially … it's like a shock. The first response is 'I don't believe this' and then it's like 'not again'."

Company raised $10m from investors and built nothing

The Fairy Meadow development was designed to capitalise on the SDA scheme, where the federal government paid up to $110,000 in rent each year to investors who built speciality housing on behalf of tenants with profound disabilities.

Mr Mowbray raised more than $10 million from 60 investors, but nothing was ever built at the site. Liquidators have discovered more than 10 bank withdrawals from Fairy Meadow House accounts totalling more than $5.28 million were made before the company went under.

Mr Mowbray told liquidators the money was to purchase building materials from Thailand but did not provide documentation to support that.

The land for the proposed development remains vacant, and has now been sold to pay creditors.

Government response

NDIS Minister Jenny McAllister said there were unfortunately some people active in the Specialist Disability Accommodation sector that come to mum and dad investors and give them information that just isn't true.

"Specialist Disability Accommodation investments are not government-backed," she said.

The Australian Securities and Investments Commission (ASIC) would not say whether it was looking into Mr Mowbray, but confirmed its investigations into another SDA developer that went under, Aiden Garrison, were ongoing.