15/10/2026
**Purpose-Built Aged Care is the Real Estate Story of the Next Decade—Here's Why Victoria Developers Should Pay Attention**
While everyone is chasing Build-to-Rent in Victoria, a far larger demographic tailwind is being overlooked: **aged care development**.
**The Demographic Reality:**
Victoria's aging population is growing at 2.5% annually. By 2031, the 60+ demographic will represent 28% of the population—up from 22% in 2020. That's a **massive demand surge** for aged care facilities and active aging housing.
Problem? Australia has a critical **aged care bed shortage**. We're not building fast enough to keep pace with demand. Federal government support (ACAR grants, capital assistance rounds) is available—but few developers are positioned to capitalize.
**Why Aged Care is the Better Play Than BTR:**
| Metric | BTR (Victoria) | Aged Care |
|--------|---------|-----------|
| **Approvals** | Complex, 12-18 months | Streamlined, shorter timelines |
| **Investor Demand** | Shifting to NSW | Growing; government support |
| **Yields** | 4.0-4.3% (lower) | 5-6.5% (higher) |
| **Objection Risk** | High (community push-back) | Low (positive community reception) |
| **Government Support** | Uncertain (BTR in flux) | Strong (ACAR, tax incentives, procurement) |
| **Demographics** | Neutral | Tailwind (+2.5% annual demand growth) |
**The Development Opportunity:**
Activity centre locations with aging demographics (Box Hill, Caulfield South, Mitcham) are ideal for:
- **Aged care facilities** (traditional nursing homes, memory care)
- **Active aging housing** (independent living for 60+ demographic; 70-80% occupancy typically)
- **Mixed typologies** (30% aged care, 70% active aging housing = balanced risk)
Herniman is actively scoping aged care + active aging housing opportunities in 3-5 activity centre locations. The business case is compelling—higher yields, shorter approvals, demographic tailwinds, government support.
**The Data is Clear:**
1 in 5 Victorians will be 70+ by 2030.
Demand for aged care will grow by 50% by 2031.
Most councils actively encourage aged care development (fewer objections).
Federal government providing capital grants + tax incentives.
If you're a developer looking beyond the BTR churn, aged care is where the real tailwind is. Let's talk.
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