Sell or run at a $5.5M loss? Council weighs future of aged care home
Having already closed two of its three aged care homes, removing 83 beds from the system, Melbourne’s Glen Eira City Council must now decide what to do with its final facility.
With a loss of $5.5 million projected for this financial year, the Council has asked local residents for feedback on the future of its last remaining 90-bed aged care facility.
At an Ordinary Council Meeting (OCM) on 24 February 2026, the council voted confidentially to consider selling Warrawee Community, located in Bentleigh East, 15km southeast of the Melbourne CBD.
In 2019, Glen Eira Council sought a buyer for its then three aged care homes, during the Aged Care Royal Commission, but couldn’t find buyers.
The facilities were:
- The 53-bed Rosstown aged care home in Carnegie, 12km southeast of the Melbourne CBD, which closed and ceased to be accredited in 2023. The land has been cleared and is being used as community-access green space.
- The 30-bed Spurway aged care facility in Murrumbeena, 13km southeast of the Melbourne CBD, which closed and ceased to be accredited in 2022. The site is now used as a respiratory clinic.
With the Rosstown and Spurway closures resulting in the loss of 83 aged care beds, the council has been keen to reinforce that the Warrawee home is not expected to close.
With 73 residents currently – an 81% occpuancy rate – the home is the only council-run, standalone residential aged care facility in Victoria, and one of very few in Australia.
Financial pressures and complexity of reforms
In a seven-page meeting summary, the Council wrote the Government’s recent aged care reforms challenges its ability to deliver sustainable aged care services to residents.
“Warrawee is budgeted to run an operating deficit of $5.5 million in the 2025–26 financial year.
“Financial pressures, combined with the increasing complexity of aged care governance and compliance, have prompted a review of the future operating model for Warrawee.”
Community survey
The Council considered four options:
- continue as usual,
- sell Warrawee to an aged care operator as a going concern,
- engage a third-party provider to operate the home, and
- close the facility and repurpose the site.
Options 3 and 4 were rejected, and the council is now seeking community feedback on options 1 and 2 through a survey closing 25 March.
A decision on the facility’s future is expected in June.
The council is also under financial pressure more broadly. Officials forecast cash reserves are predicted to fall from $67.4 million to $10.9 million by 2034-35 due to rising costs and debt repayments. The council voted in a rate increase of 5% for next financial year at the OCM, seeking an exemption from the 2.75% cap set by the Victorian government in December 2025.
Dozens of local council have exited home care services over the last few years ahead of concerns about the Government’s new home care program, Support at Home, and planned changes to the Commonwealth Home Support Program (CHSP).
With aged care beds at a premium today, and much of the uncertainty around reforms and the Royal Commission out of the way, Warrawee Community should be able to find a buyer if the Council goes down that path.
Many aged care buyers – think Respect Aged Care, Roshana Care Group, and Regis Aged Care – are purchasing stand-alone aged care homes as they seek greater efficiencies.
