NSW Aged Care facilities are occupied at a rate of 95% capacity which ensures that entry costs will increase year upon year.

In NSW the average entry price is approximately $250,000 for the moment, in the form of a refundable accommodation bond. However, expert predictions are that aged care providers will need to increase entry level prices of aged care facilities to approximately 75% of the average house prices in the surrounding precinct. For the majority of Sydney this would mean an entry price of approximately $750,000. So much for tough love.

If you're lucky enough to have purchased a home in Sydney years ago, there'll be precious little remaining to leave to your children when you sell it on to purchase your way into a retirement facility. That's if you can find one with vacancies. Typically 70% of your "refundable accommodation bond" is returned, usually without accruing any interest attributable to your estate, when your surviving family could benefit from it.

Whether aged care providers will implement these increases remains open to cynical debate, however, construction costs and land limitations are the apparent driving forces in the Sydney market, so the odds are stacked in favour of significant increases. 

ACFA (the Aged Care Financing Authority) estimate that an additional 86,000 places will be needed in the next 5 years and although this figure includes demands estimated Australia wide, on present forecasts, the industry is most unlikely to meet this future demand with self contained accommodation.

Home Care represents the government's present best strategy for picking up the expected overflow. So over the next 5 years we expect the larger Aged Care providers to include Home Care services and home nursing to clients in their existing homes.

In 2011 the Federal Government implemented its "Livable Housing Design Guidelines" for just this purpose, but punters seem less aware than they ought to be.

If I were a forward thinking future retiree, I'd be contemplating making my current home one that can be adaptable for future use, and as a property investor, Im thinking that demands for such homes will undoubtedly increase. That's when you'll need a competent architect, experienced in accessibility.

 

Gary Finn   

 

Read more about it here: why-is-aged-care-changing