How are aged care services gaining traction in developing countries?

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How are aged care services gaining traction in developing countries?

 How are aged care services gaining traction in developing countries?
Image source: © Fizkes | Megapixl.com

Highlights

  • With the development of medical science and care facilities, the aged care sector has started gaining traction in developing nations.
  • Changing trends of working family members and the rise in chronic disease cases are some of the major driving forces toward the surge in demand for aged care.
  • Summerset Group, Regis Healthcare, Estia Health, and Oceania Healthcare are some ASX-listed companies involved in aged care services.

Aged care services are already in high demand in developed countries but with advancing medical science and care facilities, people of developing nations are also inclining toward these services.

According to market research, the aged care sector would grow from 2022 to 2029. The sector is growing with a Compound Annual Growth Rate of 7%, and by 2029, it will reach US$2.35 million.

Aged care services are  divided into

  • Short-term service – assists in performing daily basic activities
  • Long-term service – provides residential facilities and medical assistance

Increasing trend of aged care services

The growing number of elderly populations is a major driving force for the growing demand for aged care services. Further, changes in the social environment and economy would also play an important role in the increasing demand.

Busy family members - A growing number of older people in a family makes it difficult for younger members to take care of them along with their work. In ancient times, female family members were supposed to stay home and care for kids and elderly people. But now, things have changed, and females are equally participating in earning money by having a job or business. This is leading to an increase in the need for aged care services.

Rising cases of chronic diseases – Nowadays, there are rising cases of chronic diseases such as cancer, obesity, cardiovascular diseases etc. These can be prevented with proper  nutrition, treatment, and some physical activities. Currently, these facilities and treatments can be taken from the comfort of one's own home without visiting hospitals or clinics. Several aged care services also provide these types of medical facilities.

Besides these, people have become more aware of aged care services and products, leading to the growth of this sector.

Despite the sector gaining momentum, it lacks adequately trained manpower and experienced workers, hampering its market growth.
Is the aged care market sensitive to recession?

A recession is a strike or a massive shrinkage in economic activities. A substantial fall in spending generally leads to a recession.

During a recession or economic slowdown, markets become volatile, and although no industry is completely recession-proof, some related to consumer staples stand strong during economic downturns as compared to others.

Aged care services have become a staple need of people these days. As discussed above,  the growing elderly population and other driving factors have made this service indispensable. Despite financial struggles, people wish for the best care and facility for their ageing parents and grandparents and are ready to spend a hefty amount for their wellbeing.

Scenario in Australia

In Australia, the government is the primary source of funding and regulator of the aged care system. Further, the government is implementing practical measures to ensure that the aged care system meets the needs of older Australians.

In 2022, the Australian government released an additional 40,000 home care packages and introduced a single assessment workforce. The average care minutes were increased to 200 minutes per day, and telehealth service was also included

In this article, we at Kalkine Media® will look at some of the ASX-listed aged care stocks and their operations.

Oceania Healthcare Limited (ASX:OCA)

Oceania Healthcare is working towards transforming the retirement and aged care experience. The company has over 44 villages across New Zealand.

Village living – Boutique villages to suit an individual's unique needs. It offers home options according to location, lifestyle, and interests.

Aged care living – It offers rest home, hospital, and dementia level care in a customised way.

Oceania has a market capitalisation of AU$670.57 million with a share value of AU$0.935 apiece.

Regis Healthcare Limited (ASX:REG)

Regis has about 30 years of expertise in aged care services. It started with 104 residents in regional Victoria and is now caring for more than 7,200 people across Australia. Regis offers premium quality aged care services through its residential care, short-term care, home care, and retirement living services.

Regis has a market capitalisation of AU$634.75 million.

Estia Health Limited (ASX:EHE)

Estia is a very well-known aged care operators in Australia. It has 68 homes in Southern Australia, Victoria, New South Wales, and Queensland and provides care to more than 8,000 residents annually.

Estia's services include long term care, short term respite care, dementia care, palliative care, and emergency care.

The company has a market capitalisation of AU$511.11 million.

Summerset Group Holdings Limited (ASX:SNZ)

Summerset is one of the fastest-growing aged care companies in New Zealand. Currently, it has 33 villages either in completion or in different stages of development. Summerset offers various independent living options and care within its villages. It provides care to more than 7,000 residents in safe, energetic, and welcoming communities.

SNZ has a market capitalisation of AU$2.40 billion.

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