Combined with a growing body of research demonstrating the significant psychological and developmental benefits of early learning, these factors are seeing placements at high-quality education centres hotly contested by families across the nation.
According to the Australian Bureau of Statistics, enrolments of four- and five-year-olds in early childcare education and care (ECEC) rose by 1.3% in just 12 months from 2020 to 2021, up to 339,015 students.
The growth is projected to continue too. A recent IBISWorld report suggested the trend was set to continue for the next five years “albeit at a slowing rate”.
The unexpected demand does, however, signal good news for those who have invested in childcare centres, are thinking of selling or are interested in capitalising on the upsurge in value by purchasing a centre.
In this blog:
More demand than available positions
For parents, the recent demand crisis – when layered with post-Covid-19 health restrictions, which are significantly impacting staff availability – is causing daily challenges as they seek secure positions for their children.
The issue is crippling some families as they try to return to their workplaces after time spent working from home. According to news.com, many parents are competing with increased enrolment numbers and being challenged by last-minute cancellations due to staff illness, which enforces caps on numbers.
To avoid the anguish, these parents are dropping their children extra early to ensure their places are “secured” before caps are reached.
Accommodating the shifts (and what it means for centre owners)
While the growth and demand issue is complex and will take time to resolve, it has highlighted the urgent need for more quality childcare centres.
We’re seeing an emphasis on boosting and retaining quality staff to service the additional demand, and all this means the industry is in for some very positive years ahead.
New legislation, announced earlier this year, is designed to support the sector through this evolution by:
- increasing childcare subsidies to enable even more children to access ECEC services
- freeing up more parents to return to their workplace in the knowledge their child is receiving consistent, quality care
- supporting more people to join the industry
- increasing the number of First Nations families accessing ECEC by removing some of the key barriers to enrolment
- boosting childcare staff numbers through additional training for current staff, fee-free TAFE to train new staff and revised retention strategies including supplemented wages and salaries
Planning further ahead
Australian Childcare Alliance (ACA) President Paul Mondo says achieving the balance between encouraging increased access to services and meeting the new demand into the future would be of key importance – a role the ACA is happy to assist with.
“ACA will continue to collaborate closely with the Australian Government on policies that drive accessibility and affordability for families, while at the same time providing the critical support needed to build a strong workforce of highly skilled early childhood educators and teachers,” he said.
“We need to co-design policies that resolve the workforce crisis without forcing additional costs onto families who are already doing it tough with the rising cost of living.”
Opportunity within the demand crisis
With so much growth on the horizon, the future is bright for those in and joining the ECEC sector.
As Government commits additional funding to address and support to forecasted growth, there are also several other substantial benefits that add to the appeal of investing in ECEC, including:
- Excellent capital growth potential for land in high-density, suburban zones
- Long, stable leases with low vacancy periods, especially compared to residential vacancies
- Excellent historical returns on investment
- Depreciation benefits
- Mandated upkeep of the building for tenants to provide quality care
Of course, there are many ways you can benefit from the growth in the ECEC sector. If you have ever considered buying a childcare centre, or want to sell while demand is high, contact a member of our specialist team to discuss how you can benefit from the ongoing growth and opportunity in this promising sector.
Selling A Childcare Centre
If you’d like to book an appraisal, you’re welcome to contact Lincoln directly on 0424 370 025, or Andrew Urquhart on 0408 439 762.
You can also register your interest as a seller for more information about the sale process, appraisals, and your profit potential.