Building new aged care beds has doubled in cost in the past four years, jumping from $250,000 to $500,000-plus, while revenue has moved just a little and profit per bed ranges from negative to sub 10% positive return for the most efficient operators. On paper, it’s a mugs game; so, where to from here?

Pre-COVID, aged care providers could build a new bed for $250,000. Today, the cost is closer to $500,000 in regional Australia with cheaper land, and $600,000 in capital cities. 

But Refundable Accommodation Deposits (RAD) are not doubling – in FY19, the average RAD across the country was $402,384. Four years later, average RADs had grown by just 23% to $493,129.