With the aged care sector facing ongoing reform and cost pressures in the aged care sector, the professional services firm has developed a new data-driven platform designed to help providers assess and unlock the pricing potential of their accommodation offering.
The platform was created in response to the 1 January increase in the RAD (Refundable Accommodation Deposit) price ceiling from $550,000 to $750,000.
Colliers notes that while the median house price in Australia increased by 34% between 2018 and 2023, the average RAD only increased by 15% or $64,000 in the same period, according to the Financial Report on the Australian Aged Care Sector.
“We saw the price ceiling change as a significant opportunity for providers,” Lynn Johnsen, Head of Dara Strategy & Solutions at Colliers, told The Weekly SOURCE.
“When we dug into the data, it became clear that RAD prices haven’t kept pace with broader housing market trends or construction costs over the last 5-10 years. That’s a critical issue when you consider the competition operators face for development sites and the rising costs of operations.”
The tool maps the subject facility and competing RACFs within its local catchment area – see the dashboard above and below – and provides a snapshot of:
- Subject facility overview
- Median house price
- 70+ cohort’s current/projected population and demographics
- Supply/competitor data
- Market saturation indicators including occupancy rates and ratio of 70+ population to RACF beds (per 1,000)
- Local workforce availability
The RAD value-uplift potential is then assessed based on:
- Facilities in the catchment are categorised as low-, medium-, or high-tier based on operator type, age, quality, size, and build.
- The subject facility is then benchmarked against like-tier competitors across room types (shared, standard single, premium single).
- This is overlaid with the median house price in the facilities’ suburb to provide a relative pricing view and identify where there may be uplift potential.
Access is provided via an annual license, with additional costs depending on the depth and scope of analysis required. A typical assessment might range from $1,000 to $5,000, with the base license priced in the low hundreds.
For more information, contact Lynn here.
