Thinking of Buying an Aged Care Accommodation Business in Australia? Here Are 3 Vital Questions to Ask

Australia’s aged care sector is expanding rapidly, with industry revenue projected to grow from $36.4 billion in 2024-25 to $45.3 billion by 2029-30.

The number of Australians aged 70 and older is increasing by 3.45% annually, driving demand for residential aged care, retirement villages, and assisted living communities.

However, occupancy rates remain under pressure, averaging 86.7% in 2023-24, while staffing shortages and compliance costs continue to impact profitability.

Buyers must assess financial viability, market positioning, and regulatory compliance before investing.

1. Is the Business Financially Stable and Profitable?

Why It Matters

Aged care accommodation businesses rely on a mix of government funding, private payments, and accommodation deposits.

Rising labour costs, increased compliance expenses, and occupancy rates affect long-term sustainability. Understanding the financial structure and profitability is essential for assessing the viability of an acquisition.

What to Check

• Revenue trends & funding sources – Determine whether income is derived from AN-ACC funding, private payments, or a mixed model.
  
  
• Profit margins & cost management – Review financial records from the last three to five years to evaluate profitability trends.
  
  
• Occupancy rates & demand outlook – Assess current and historical occupancy levels to gauge stability and future demand.
  
  
• Capital investment requirements – Identify potential facility upgrades or renovations required for compliance or competitiveness.

2. How Competitive is the Business’s Market Position?

Why It Matters

The aged care sector is experiencing structural shifts, with the Aged Care Act (2025) introducing consumer-directed care and increased provider competition.

Businesses in high-demand locations with diversified services are better positioned to maintain occupancy and profitability.

What to Check

• Location & demographic demand – Evaluate whether the facility is in an area with strong demand for aged care services.
  
  
• Brand reputation & compliance history – Review reports from the Aged Care Quality and Safety Commission for any compliance issues.
  
  
• Workforce stability & staffing costs – Labour accounts for over 60% of operating expenses, making staff availability and cost management critical.
  
  
• Independent vs. corporate ownership model – Assess whether the business benefits from economies of scale or if it operates as an independent provider.

3. Is the Business Aligned with Industry Trends and Future Growth?

Why It Matters

Aged care providers face increasing regulatory scrutiny, rising costs, and evolving consumer preferences.

Businesses that diversify services, integrate technology, and focus on high-quality care will be better equipped for long-term growth.

What to Check

• Compliance & regulatory adaptation – Ensure the business meets all Aged Care Act (2025) requirements and quality standards.
  
  
• Service diversification & revenue opportunities – Assess potential for additional revenue streams, such as allied health programs or home care services.
  
  
• Facility infrastructure & future investment needs – Determine whether the property meets modern standards or requires upgrades.
  
  
• Market adaptability & consumer-directed care strategies – Evaluate how well the business can adjust to increased competition and shifting consumer expectations.

Ready to Invest in a Thriving Aged Care Accommodation Business?

With rising demand, ongoing government funding, and opportunities for service expansion, the Australian aged care sector presents a strong investment opportunity.

However, financial sustainability, regulatory compliance, and competitive positioning are essential for long-term success.

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