National survey shows gloomy finances for aged care sector
Declining investment in Australia’s nursing homes could foreshadow a bleak future for the sector, a national survey of nursing home finances conducted by business consultants Grant Thornton, says.
The study of 686 facilities, believed to be the largest independent study of residential care providers in Australia, found high consumer demand for modern aged care facilities was not being matched by investor interest, because of low returns.
The results showed an overall drop in average returns in the past 12 months of 10% for new, single room facilities.
The consultants estimated that the average return on investment for the new single room facilities was now just 1.1%.
Grant Thornton’s head of national aged care services, Cam Ansell, said current regulatory and funding arrangements needed review to boost investment.
Nursing home residents now wanted single ensuite rooms, or adjoining rooms attached to an ensuite, instead of shared multi bed rooms, he said.
“We’ve basically had a major paradigm shift in consumer demand, where the expectations of the privacy and dignity and comprehensive care within these facilities means investment is significant,” Mr Ansell said.
“Unfortunately, under the current regulatory framework, the revenues you get for investing in these very expensive facilities, which are much more costly to operate is no different.”
The survey results were presented to Federal Finance Minister, Lindsay Tanner, and Minister for Ageing, Justine Elliot.
A final report on the Grant Thornton findings is due to be delivered to the Federal Government by December.
