The Adelaide Advertiser reports that investors are turning away from aged care, preferring to invest in the more lucrative retirement villages. Reasons for no longer investing in aged care include the rising cost of land, cutbacks in business lending and that retirement village offer more long-term cash flow.
Developers are facing up to a 20 per cent loss on returns and as a result are backing away from new projects.
Experts are now warning that a critical gap is emerging between the amount of new aged care facilities being built and the demand for aged care places in the future.
It is estimated that by 2050 Australians will need another 11,150 aged care places.
The Adelaide Advertiser quoted Jonathan Karlovsky, from audit, tax and advisory firm BDO who said that people are “sitting on land banks.”
“But as land becomes more expensive, developers will just change (their land) use or sell it. People who have these land banks are losing their return or investment, so they will look elsewhere for return.”
Will lack of investment in aged care also affect those working in the aged care industry? Or those who wish to do so in the future?