Capital has made its call on aged care. Now what?
Heading into 2026, capital has made a clear – if uncomfortable – call on Australia’s ageing sector.
Retirement living and land lease have the green light.
Residential aged care sits on amber – investable, but only in certain situations.
Home care is red.
In this week’s New Capital edition of SATURDAY, we apply a traffic-light test not to try to simplify the debate, but to expose it. Because while demand across aged care has never been clearer, the conditions required for new capital to enter the system have not been met.
Demand is not the problem.
The problem is that capital cannot price the operating model.
In retirement living and land lease, investors can see cash, timing and scale. The returns are clear and the risk is managed as platforms grow.
In residential aged care, investors see rising costs, regulatory intensity and uncertain long-term returns. In home care, they see a system being redesigned on the run – price caps, co-contributions and Interim Packages being added on before the dust has settled.
Capital is cautious for good reason.
“Once things settle” is not a plan
The message from policymakers is often that capital will return “once things settle”.
But aged care never settles.
New residential aged care beds take at least three years to deliver – often longer. And every year that capital remains on the sidelines deepens the future shortfall.
We are now at the point where many new beds depend on direct Government intervention.
The Commonwealth has funded a new aged care facility in the Northern Territory through Ozcare because the market could not deliver it alone.
The West Australian Government has introduced a $100 million low-interest loan scheme to accelerate aged care construction.
In NSW, the Minns Government is now underwriting private housing developments to turn approvals into homes.
Since October last year, developers with approved low- to medium-density projects have been able to ask the Government to step in as guarantor for up to 50% of homes in each development.
They are different sectors but they have the same mandate – reduce risk and accelerate delivery.
Aged care should not be the exception.
Everyone is acting rationally – separately
At present, the system is operating in silos.
The Commonwealth controls funding and pricing, while the States control land and planning.
Providers carry all of the workforce, compliance and delivery risk. Meanwhile, investors wait for certainty that no one side can provide.
The result is a sector busy shuffling the deck chairs through mergers and acquisitions – without actually expanding capacity.
This is not a market failure in isolation – it is a failure of stewardship.
The question Canberra must answer
The question is no longer whether aged care needs capital.
It is whether the Federal Government is prepared to treat aged care infrastructure as infrastructure – requiring coordination, underwriting and long-term capital partnerships – instead of hoping the market solves supply shortages on its own.
Capital is already flowing – just not into aged care.
Instead, it’s flowing into the living sectors where risk, returns and cashflow are clear.
Until aged care can meet that test, the lights won’t change – no matter how loud the demand signal becomes.
Read the full New Capital edition of SATURDAY – our first issue for 2026 – for our analysis of where capital is flowing, where it’s stalled – and what must change before it returns, out tomorrow at 12pm. Not a subscriber? Sign up here.
