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10-year population forecast set to ‘supercharge’ childcare assets

By Grace Ormsby
08 July 2024 | 12 minute read
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An analysis of Western Australia’s population growth over the coming decade is boding well for investment in the childcare space.

Sterling Property has revealed a new report, the Childcare Market Insights: An Outlook on Childcare Fundamentals in Western Australia, detailing that more than 218,000 Western Australian children will require childcare services within the next 10 years.

With the research undertaken by Urbis, the report highlighted the expectation that population growth will “supercharge demand for childcare services”.

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It’s a statement that aligns with what’s being seen on the ground, with Sterling Property partner agency Jake Wallman sharing that it aligns with a recent increase in interest by investors for childcare centres.

He said: “Early movers are identifying the potential for childcare centres to support WA’s growing population – looking to the future needs of the state.”

Wallman noted that these investors who see such centres as “prime growth opportunities” are “identifying opportunities for childcare centres with good access, high exposure and proximity to existing amenity”.

He also noted that improved flexibility in commercial land use has supported the growth of centre-based childcare, with many mixed-use precincts “emerging as suitors for prospective childcare businesses”.

“Increasingly, new and revitalised precincts are being zoned for mixed-use, removing barriers for commercial ventures such as childcare centres.”

He said this is “making it easier for parents and carers to integrate their work commitments with their parental responsibilities”.

And with the average Western Australian household using childcare services for nearly 30 hours per week, Wallman pointed out that many “parents are prioritising proximity to the workplace – looking to make up valuable time throughout the day”.

An economic indicator

For Urbis director David Cresp, childcare centres make a good yardstick for measuring Australia’s economic prosperity.

He explained: “Accessible and affordable childcare provides significant social and economic benefit it supports the workforce, gender equality, and acts as a driver for economic progress.

“A strong workforce leads to higher economic output and greater tax revenue, which will work to support Western Australia’s response to the challenges of a growing population in a high-inflationary environment.”

He also pointed out that “centre-based childcare continues to receive the largest portion of funding available to childcare services, with steady subsidy increases of 7 per cent annually since 2019”.

“If we look at funding across the early education industry, centre-based childcare accounts for 85 per cent of the total allocation, and savvy investors are taking note and exploring the potential of centre-based childcare ventures across WA.”

And while many parents are also seeing further government financial support through the Child Care Subsidy and Additional Child Care Subsidy, increases to the cost of living are still biting, meaning many families are being forced “into a two-working parent model”, as acknowledged by Wallman.

“More parents are needing childcare services to support households navigating a tough economic landscape,” he flagged.

ABOUT THE AUTHOR


Grace Ormsby

Grace Ormsby

Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.

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