New year, same old problem: where will the country find the capital to incentivise development of new beds – before the next wave of Baby Boomers hits?
As we report in this issue, the latest StewartBrown Aged Care Performance Survey Analysis Report for the July-September 2024 quarter has again highlighted there is no cash to build new beds.
With the cost of a new bed sitting at around $500,000 per bed, StewartBrown says an EBITDA of $20,000 per bed per year or a 4% annual return on capital is required to support investing in new bed capacity.
How much are operators earning?
The average EBITDA was $4,734 in the latest StewartBrown results.
The numbers just don’t add up.
StewartBrown has forecast that these figures will only improve to between $15,000 and $20,000 by FY29 thanks to the funding changes coming in under the Aged Care Taskforce’s recommendations.
Will this funding arrive in time to help the older Australians and their families looking for a bed now?
No.
Hospital in the Home calamity
Real estate firm CBRE has also recently published their latest Seniors Living report for 2025 and the two graphs below caught our eye.
The first shows how the number of hospital beds in Australia has fallen far below the growth in population.
The second underlines the big bounce back in residential aged care occupancy since 2022.
And as CBRE notes, “no number of Home Care Packages will be able to provide sufficient 24/7 care to those who are forced to remain in their homes beyond what should reasonably or safely be expected.”
In short, the bed crisis is already here – and the majority of providers won’t have the cash to build more for at least three years.
In announcing the promotion of Minister for Aged Care Anika Wells to Cabinet, Prime Minister Anthony Albanese has been trumpeting the Government’s work in ‘fixing’ the aged care sector.
These numbers prove there is still plenty of work to be done.
You will hear more on this topic in our upcoming issues – plus check out our new series starting this week where we ask CEOs for their political ‘wishlist’ ahead of the upcoming Federal election. First is LDK Seniors’ Living CEO Byron Cannon.
