The Demographics
Our Ageing Population
It is widely recognised that Australia’s population is ageing. Australian Bureau of Statistics (“ABS”) projections show that the ageing of the population, already evident, is set to continue. The 1999 median population age of 34.9 years is projected to increase to between 43.6 and 46.5 years in 2051. The age structure of the population will noticeably change with a heavier concentration of people in the ages 55 years and over and only a small increase or even slight decline in the younger age groups, as detailed in the graph below.
The proportion of the population aged 55 and over is expected to substantially increase from 21% in 1999 to almost 40% in 2051. The proportion aged 85 and over is expected to almost quadruple, from 1.3% in 1999 to approximately 5% in 2051 as seen in the graph below. The size of the 65+ age group will increase rapidly from 2011 onwards when the post World War II “baby boomers” start turning 65. ABS Population Projections Australia, 1999 – 2101 (3222.0)
Baby Boomers
Over the next 50 years, the over 55’s market will become the fastest growing demographic sector as a result of the post World War II “Baby Boomers” influence. The expression “baby boomers” is a reference to Australian residents who were born in Australia or overseas during the years 1946 to 1965. In the year 2001, the first of the baby boomers turned 55. ABS Population Projections 1997 to 2051 (Cat. No 3222.0).
The baby-boom generation is the result of a period of high fertility and high levels of immigration that followed World War II.
Because of this the baby boomers have made, and will continue to make, a large impact on the absolute size of a range of population groups as they progress through the age structure.
As seen in the graph below, baby boomers formed a prominent bulge at the younger end of the age distribution (all children under 15) in 1961. At the other end of the spectrum, in 2001 the first of the baby boomers reached the age of 55. ABS Population 1997 to 2051 (Cat. No. 3222.0).
Australia’s changing age structure has implications both for the level of social expenditure that might be required in the future, and the level of resources that might be available to fund it. As the population aged 55 years and over increases in size, associated social expenditure on income support, care and health services can be expected to increase. ABS Population Projections 1997 to 2051 (Cat. No. 3222.0)
The ageing baby boomers are set to be the healthiest generation in Australian history, not to mention the wealthiest. Many baby boomers will be in a better position than the current older generation, to provide for a financially secure retirement without relying on the age pension for a major component of their income.
The combination of a rapidly ageing Australian population with increased life expectancy, better health, substantial wealth and disposable income, and a significant amount of spare time, has enormous implications for all Australian businesses.
Market Profile
According to surveys of living arrangements of older Australians undertaken by the ABS the number of persons and proportion of target population living in senior living accommodation has increased in recent years.
Currently, it is estimated that less than 3% of the senior Australian population live in comparable senior living accommodation, compared with up to 12% in certain regions of other developed nations with similar demographics.
The following table indicates the size of the senior living market and the future demand for people aged 55 years and over.
With the changing demographics and changing choices being offered to enhance senior living lifestyles, estimates based on ABS data indicate that the “baby boomer” population expansion may require up to 198,000 units to accommodate an additional 277,000 Australians over the next 10 years, as seen in the table above. The penetration, which is a proportion of senior Australians residing in comparable senior living communities, is based on 6% of persons over 55.
The Future
The need for future senior living planning has been highlighted by a number of issues, including the high demands and emergence of the “baby boomers” into a retired aged market, which is rapidly changing the demographic structure of our population.
The larger players in the market must strive for brand recognition as an important objective in their business model. Such competition will provide better facilities and services to meet the demands and expectations of the ever-growing over 55’s demographic.
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