Aged Care Residential Services in Australia: Market Size, Businesses & Forecast 2026

The Aged Care Residential Services industry in Australia provides long-term, supportive accommodation and professional clinical care to elderly individuals who can no longer live independently. The sector is heavily dependent on public funding, with government expenditure on residential care reaching 24 billion AUD in the 2024-25 financial year according to the Department of Health, Disability and Ageing. The industry's current direction is characterized by extensive regulatory structural reforms, a transition to higher mandatory care targets, and steady consolidation among providers to cope with tightening margins.

Industry snapshot

Key public data points

Historical & forecast

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What does the Aged Care Residential Services in Australia industry cover?

This industry comprises organizations operating facilities that offer residential care combined with either supervision, personal care, or nursing care services for the aged. Services encompass long-term permanent accommodation, dementia units, palliative care, and short-term respite options. Under the official Australian framework, these facilities do not operate as standard apartment complexes but function as clinical and assisted living spaces where care is tied directly to the resident's physical or cognitive assessment.

• •Provides permanent or short-term clinical and personal assistance primarily to individuals aged 65 and over (or 50 and over for Aboriginal and Torres Strait Islander peoples).
• •Services are evaluated through the Australian National Aged Care Classification (AN-ACC) funding model.
• •Excludes independent living units and retirement villages that do not offer formal, regulated everyday personal and nursing care.

Who operates in the industry and how is it structured?

The Australian residential aged care market features a mixed ecosystem of not-for-profit organizations, private for-profit enterprises, and state/local government operators. Not-for-profit operators, including religious, charitable, and community groups, historically maintain the largest share of facilities, although commercial operations hold a significant portion of the urban market. The total number of approved residential care providers has contracted due to rising structural demands, falling to 707 providers by June 2025.

• •The sector saw a reduction of 29 residential aged care providers between June 2024 and June 2025, driven largely by market consolidation.
• •Not-for-profit providers accounted for the highest average delivery of daily care minutes, outpacing commercial entities.
• •Total industry claim days grew from 71.1 million to 73 million in 2024-25, showing higher service delivery despite fewer discrete operators.

What drives demand in the industry?

Demand for residential aged care is primarily dictated by Australia's rapidly aging demographic profile and a corresponding increase in chronic, age-related health conditions such as dementia. While government policy encourages aging-in-place via home care packages, residential services remain essential for individuals requiring complex, continuous clinical oversight. Occupancy rates have trended upward as the absolute population of older Australians expands, nearing optimal operational capacity in metropolitan centers.

• •Average industry occupancy rose to 90% in the 2024-25 financial year, up from 88% in the previous period.
• •Occupancy in major metropolitan areas reached 95.2% in 2024-25, highlighting localized urban capacity constraints.
• •Government long-term projections estimate Australia will require approximately 10,000 new aged care beds per year to sustain future demand.

Who are the notable companies in the industry?

The competitive landscape features a few large corporate entities alongside major non-profit provider networks like UnitingCare, Catholic Health Australia, and Bolton Clarke. For-profit corporate operators manage substantial portfolios of properties, focusing heavily on operational efficiencies and premium accommodation streams to balance direct care deficits. The market is competitive yet constrained by rigid capital requirements and government-controlled bed allocations and pricing schedules.

• •Regis Healthcare Limited is one of the largest publicly listed aged care providers in Australia, operating dozens of facilities nationwide.
• •Estia Health, historically a major listed competitor, represents the ongoing trend of private equity and institutional acquisition in the sector.
• •Opal HealthCare and BlueCross operate as major private corporate entities managing extensive residential care footprints.
• •Total sector Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) reached 2.4 billion AUD across the residential care system in 2024-25.

What are the recent trends and outlook?

Financial sustainability remains a critical focal point, with many homes operating at a loss despite an overall improvement in sector-wide net profits. Providers are facing increased labor costs stemming from historic fair work wage determinations, which have compressed direct care margins and forced the cross-subsidization of everyday living losses. Capital expenditure on new builds has experienced modest contractions, though investments in upgrading existing facilities are rising to meet modernized regulatory demands.

• •The proportion of providers reporting a positive net profit before tax (NPBT) position increased to 62% in 2024-25.
• •Over half of all residential aged care homes (54.8%) operated at an individual operational deficit in 2024-25.
• •Total refundable accommodation deposits (RADs) held by industry providers expanded to 48 billion AUD as of June 30, 2025.

How is the industry regulated?

The sector is heavily regulated by the Australian Government, which dictates compliance, funding levels, quality standards, and staff-to-resident ratios. The industry is currently undergoing a legal transformation with the introduction of the new Aged Care Act, designed to strengthen the rights of older Australians and tighten provider accountability. Operators face strict penalties and public scrutiny through metrics like Star Ratings and mandatory staffing quotas.

• •Mandatory direct care minute targets increased to an average of 215 minutes per resident per day starting October 1, 2024.
• •The mandated targets require a minimum of 44 minutes of registered nurse (RN) care per resident per day.
• •The newly drafted Aged Care Act 2024, altering the regulatory architecture, came into formal effect on November 1, 2025.

Government, statistical and trade sources used for this Claight analysis.

• Department of Health, Disability and Ageing 2024-25 Report on the Operation of the Aged Care Act 1997 ·
• Financial Report on the Australian Aged Care Sector 2024-25 ·
• Independent Health and Aged Care Pricing Authority (IHACPA) Residential Aged Care Cost Collection 2024-25 ·
• UTS Australia's Aged Care Sector Full-Year Report 2024-25