Despite lockdowns, economic fear and job loss, the childcare industry has not only survived Covid-19, it’s bloomed in unexpected ways.
When Australia announced strict stay-at-home orders in early 2020, fear for the childcare industry’s long term health was rife. Children remained home with locked-down parents, many of whom had lost income or jobs, and centres were eerily quiet.
But, despite a world-stopping pandemic and a momentary hiatus, the childcare sector has come out on top in every way, making it one of the most secure industries in Australia.
No one could have predicted that a sector that – on paper – should have struggled with nationwide lockdown and economic crisis, would emerge as a crucial and unstoppable part of Australian life, and in the lives of the children it serves.
Table of Contents
1. Childcare centres showed surprising resilience in the face of global economic disaster
Enrolment numbers for 2020 eased by 0.3%, which is explained by the decrease in attendance at the onset of the pandemic. However, in the months post-lockdown, we’ve seen growing and urgent demand for placements, and a critical need for more educators to support the daycare demand.
Financially, childcare businesses have become one of the strongest assets in a portfolio, especially given the government’s vow to infuse billions of grant money and family support funds into childcare – which it deems critical for allowing more women to rejoin the workforce – over the coming years.
Australia’s unemployment rate is falling, and more people are returning to their place of business after working from home for many months, all of which will drive more demand for daycare.
2. Updated hygiene guidelines have created safer environments for everyone
New mandates on safety and cleanliness have taken childcare centre standards to new levels, providing healthier and safer places for children, educators and staff.
The new guidelines include improved handwashing and sanitising procedures, more frequent cleaning schedules, and updated systems for dealing with sick children to prevent infection.
It’s another surprising way we’ve grown as a nation that will set children up with good hygiene sense, and protect educators from illness, which in turn reduces educator turnover and cost of sick days.
3. Childcare emerged as a safe haven for at-risk children
The disturbing rise in Domestic Family Violence cases during the lockdown period revealed just how vital it is for at-risk children to have access to carers and help outside of the home, where they can be nurtured and supported.
Research shows daycare centres provide security for children who are victims of Domestic Family Violence (DFV), which is vital given the preferential order of importance in DFV cases.
Typically, the victim and perpetrator are dealt with first, while children are lowest in priority for support in DFV situations. Childcare educators become, in essence, champions for children who need the most help, and that was never more needed than during 2020 and beyond.
4. Childcare shielded children from Covid-related mental health harm
There was an immense rise in mental health issues throughout the pandemic, as people struggled to cope with the stress and anxiety of a global disaster.
Children may be young, but they aren’t unaware of emotional changes in the home. For example, disrupted routines, anxiety and stress from parents, mask-wearing, physical distancing and missing relatives negatively impacted children and their emotional wellbeing, making them feel insecure and stressed.
Childcare centres were recognised as being safe, familiar places for children navigating the emotional upheaval of Covid-19 times. Educators prioritised fostering social-emotional development for children in care, making daycare an essential service in reducing to mental health issues down the track.
5. An unprecedented bounce-back with excellent numbers in every way
Without doubt, the childcare sector is a strong one to invest in, whether that’s as a business owner or freehold landlord, but the surprising thing is how quickly the sector turned around after almost halving in revenue during early 2020.
Once again, we see how critical childcare is to the successful running of our economy, the health and wealth of Australian families, and pre-school education and wellbeing.
We can see it in the Federal Government’s commitment to greater funding, as well as better financial support for parents with children in care. Demand for childcare is growing as more people enter the workplace, particularly women, with more affordable childcare as an option.
In terms of financial success, childcare is a growing industry with excellent tenant retention, where leases are typically 15 to 20 years. This translates to consistent rental yields, and robust capital growth for the land the business is built on.
6. An explosion of jobs to meet demand was unexpected and encouraging
Australia is experiencing a national shortage of educators and childcare staff to fill the centres cropping up to meet enrolment demand. More than 27,000 jobs are expected to open up in the childcare sector, according to the Australian Industry and Skills Report.
Once again, we see evidence that childcare is an industry that isn’t easily susceptible to movements in the economy, global changes or even technology, since it’s well and truly a crucial brick-and-mortar industry.
7. Government funding shows the magnitude of need for childcare today
In May 2021, the Federal Government pledged $1.7billion towards childcare centres in the 2021-22 budget, on top of the $10.3billion the government already invests into the sector.
The new funding injection will support a new child care subsidy that will make it easier for families with multiple children in care to afford fees.
The government funds up to 85% of fees for families eligible for Child Care Subsidy, now up to 95% under the new scheme, making it easier for low and middle-income earning families to access care.
The biggest test since the GFC
The pandemic was the world’s biggest economic hardship since the Global Financial Crisis of 2008, and while it seemed touch-and-go in the beginning, the entire sector has rebounded with surprising strength.
If you’re considering childcare as a business owner, or investing as a freehold land owner, please see our current listings for available opportunities.
