Retirement living and residential aged care among 25 reasons to be confident about growth
24 March 2014: As Australia’s population ages, retirement living and residential aged care have been identified by professional services firm Deloitte as potential ‘future wave’ economic growth opportunities.
New research from Deloitte, Positioning for Prosperity? Catching the next wave, identifies 25 sectoral hospots, the ‘Deloitte Growth 25’ (DG25), with the biggest potential to lift Australia’s growth trajectory over the next 20 years. Many of the domestic growth opportunities that Deloitte identifies result from the collision of health care and ageing.
Some of these can be found in the big and primarily domestic sectors that make up the bulk of our economy, and some – including senior living segments such as retirement living and residential aged care, both of which are forecast to see annual growth of 5.1 per cent through to 2033 – will benefit from demographic trends.
Deloitte National Senior Living Leader Tapan Parekh said: “The baby boomer generation is retiring and, combining superannuation and assets, they will have retirement funds available on a scale never seen before in Australia – or indeed elsewhere.
“The coming wave of retirees will also be large and will come with more ambitious expectations of their retirement years than previous generations.
“That will revolutionise a series of markets, including retirement living, where increasing luxury will be possible due to the growing scale of future retirement facilities.
“Moreover, the market growth is almost guaranteed. Some will be interested in a sea change, some in a tree change and others will want to live in inner cities.”
Closely related to the retirement living sector is the boom in aged care. Growth in nursing home demand will see standout growth in coming decades. In 2013, the over 80 years age group accounted for one in every 26 Australians. By 2030, one in every 18 of us will be over 80.
The Deloitte report says the changes will be a slow burn, with the peak years for baby boomers entering nursing homes not starting until the late 2020s, and the youngest of them following throughout the 2030s.
“Nursing homes will undergo a transformation as wealthier baby boomers, and their children, look to maintain expectations – with private room ensuite facilities, secure gardens, personally tailored services and highly skilled care staff.” Mr Parekh said.
“Australia’s emerging dementia epidemic will also play a huge role in the opportunities on offer. Deloitte Access Economics estimates that the number of Australians living with dementia will quadruple by 2050.
“As a result, specialist dementia care is already growing rapidly, and not only will more Australians require care, they will increasingly have the money to pay for better quality care.”
Positioning for Prosperity? Catching the next wave is the third edition of Deloitte’s Building the Lucky Country series, which focuses on business imperatives for a prosperous Australia. A draft version of the full report was debated by a group of business and political leaders in February 2014 and the final report reflects their feedback.
A companion media release considers the national impacts of the full DG25.
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