Reality check for Health Minister’s aged care ambitions
- Demand surges: Aged care residents expected to double by 2045
- Build activity slows: New construction spending fell five per cent
- Supply lags: Only 802 new aged care beds opened
- Pipeline improves: Building approvals reached a five-year high
New Government figures have poured cold water on plans to rapidly expand Australia’s aged care sector.
The Federal Government’s Financial Report on the Australian Aged Care Sector 2024-25 – released this week – has reiterated the outlook for residential aged care demand.
According to the report, the number of aged care residents is expected to more than double within 20 years, reaching 412,000 by 2045, compared with 204,000 residents in 2024-25.
To meet the needs of this population, an anticipated 10,600 new aged care beds will be required every year – an annual growth of 3.6%.
Federal Health, Disability and Ageing Minister Mark Butler has repeatedly stated that Australia needs the equivalent of one new aged care home every three days for the next 20 years to meet the demand.
Yet, the 121-page report highlights that the pace of new aged care builds will not even come close to meeting that forecast.
In 2024-25, only 0.6% of services were planning to build new homes – equating to only 15.5 of the total 2,590 homes in Australia. At best, that could add 1,500 beds, which could still be years away from opening.
Building levels also declined in 2024-25, despite the 2026-27 Budget in May promising funding to support 5,000 additional aged care beds each year.
The value of new aged care builds fell 5% to $2.5 million during the year, down from $2.6 billion in 2023-24.
Expenditure on rebuilding was also down, falling 17% to $547.9 million in 2024-25, down from $658 million in 2023-24.
However, the data on building approvals did offer a glimmer of optimism for future aged care bed supply.
Building approvals increased 23% to 285 in 2024-25, up from 232 in 2023-24 and the highest number in five years.
There were also 93 approvals for new builds in 2024-25, up 41% from 66 in 2023-24.
The Department of Health, Disability and Ageing told The Weekly SOURCE in September 2025 that 1,700 new residential aged care beds are expected to come online in 2025-26 and 4,000 in 2025-26.
The slowdown in new builds and redevelopments in 2024-25, combined with just 802 new beds added during the year, raises questions about whether that forecast can be achieved.
Watch this space then.
