Demand for residential aged care beds is forecast to double in the next 20 years, but aged care building development has stalled, the Government's latest Financial Report on the Australian Aged Care Sector 2022-23 states.
Though some of the financial data is now a year old, it reveals new sector data and forecasts that highlight worrying trends for residential aged care.
With 400,000 beds expected to be needed by 2043 and the number of operational places in residential aged care increasing by only 1,500 to 221,467 in the year to 30 June 2023, our back-of-envelope calculations suggest 8,900 new aged care beds will be needed every year for the next 20 years to meet rising demand.
Yet the construction of aged care beds is declining.
In 2022-23, the value of aged care construction fell 5.6% to $3.6 billion, the third straight year of declines (see main image).
"The decrease in expenditure is partly attributable to the ongoing fragility and volatility in the broader construction sector which has led to supply chain disruptions, builder shortages and significant cost increases," the report states.
The Government's inaction on the Aged Care Taskforce recommendations, which is causing uncertainty about the future funding environment, is also likely to have played a part.
Falling building approvals and planned building suggest aged care construction will continue to decline in the short to medium term.
In 2018-19, 5.3% of aged care homes were planning upgrades and 1.2% were planning rebuilds. In 2022-23, only 1.9% were planning upgrades, and 0.4% were planning rebuilds.
In 2018-19, there were 336 building approvals granted in aged care. In 2022-23, only 224 building approvals were granted - the number has declined every year for at least the last four years.
Where will the aged care beds needed in the future come from?
Read the full report here.
