According to the Australian Bureau of Statistics, approximately 20% of the Australian population, or 6.8 million people, are expected to be aged 65 and over by 2040.
This will be more than double the 3.2 million people aged 65 and over in 2012.
During the same period, the number of Australians aged 85 and over is forecast to almost triple to 1.2 million from 430,000.
As Australia's population ages I expect demand for aged care and healthcare services will rise strongly.
In light of this, I feel the following shares could prove to be great long-term buy and hold investments:
Japara Healthcare Ltd (ASX: JHC)
Japara has plans in place to meet the expected increase in demand for aged care services over the next decade and beyond. By 2025/26 the company intends to increase the number of places under management by over 2,500. This will be a sizeable 65% increase on its current places. I expect this to result in above-average earnings growth over the next decade, allowing Japara to continue to grow its dividend. At present its shares provide a trailing fully franked 5.5% dividend.
Ramsay Health Care Limited (ASX: RHC)
It is worth remembering that ageing populations are not just an Australian phenomenon. Populations across the globe are ageing at a similarly strong rate and in many cases even quicker. I think this puts Ramsay and its vast global private hospital network in an excellent position to profit in the future. Although its shares appear reasonably expensive at 30x trailing earnings, I believe its strong long-term growth prospects make them worth every cent.
