Old people, it appears, are getting older. It seems like every week there's someone from the government or business talking about the changing demographics of Australia or the difficulty in catering for an increase in aged care.
So what's an investor to do?
Experts believe that is a trend that will continue for the next 10 to 20 years at least. Australia's population is dominated by the baby boomers (born between 1946 and 1964) that are now coming into their older years and plan to be around for many years yet. I therefore expect Australia as a whole will need more retirement homes, more hospitals, more diagnostic and pathology capacity, and more aged care workers.
Invest in this!
There are a number of ways to take advantage of this trend depending on your level of wealth. For the multi-millionaires among us:
- Buy or open a nursing home,
- Start a pathology lab or small private hospital for the elderly,
- Buy a few CT or MRI machines and lease them to smaller practices, or
- Start an aged care training academy.
Or, for those of us with less millions, there are a number of options on the ASX that are poised to benefit from this trend:
- Ramsay Health Care Limited (ASX: RHC) owns and operates private hospitals in key positions around Australia and is also investing overseas. The group is increasing capacity to deal with greater demand in both metropolitan and regional areas.
- Primary Health Care Limited (ASX: PRY) owns and operates a range of medical centres that focus on preventative medicine through the use of pathology and diagnostics services. It is expected that greater reliance will be placed on prevention rather than cures in the future, which should increase demand for Primary's services.
- Japara Healthcare Limited (ASX: JHC) owns 35 aged-care facilities in Victoria, New South Wales, South Australia and Tasmania. Japara controls 3,000 of the 186,000 beds nationwide and will be looking for acquisitions.
