A Year That Shifted the Ground
2025 was not defined by a single market trend or policy change. Instead, it was a year where multiple pressures converged — housing affordability, demographic change, record high immigration rates, care reform, regulatory scrutiny and delivery risk — reshaping how property decisions are being made across Australia.
For developers, operators and investors, the year reinforced a clear reality: success is no longer driven by speed or scale alone, but by clarity, evidence and alignment across strategy, product and execution.
As the industry steps into 2026, the lessons from 2025 are already influencing how decisions are being made. Reflecting on the year just passed, several patterns stood out. In this piece, we’ve chosen to focus on what unfolded across the retirement living sector — not because it exists in isolation, but because it offers one of the clearest lenses into the broader structural shifts underway.
The Bigger Picture: What 2025 Revealed Across the Market
Across the property sector, we observed a shift away from purely aspirational demand toward more needs-based decision-making, underpinned by affordability pressure, lifestyle trade-offs and increasing consumer scrutiny.
Key themes that consistently emerged included:
- Policy and regulatory volatility influencing feasibility earlier in the project lifecycle
- Supply constraints creating compounding pressure across housing typologies
- Greater focus on transparency, value for money and long-term outcomes
- A growing disconnect between assumptions made on paper and realities encountered in market
While these dynamics are evident across the broader property sector, retirement living provides a particularly instructive lens through which many of these shifts became most visible.
Retirement Living in 2025: A System Under Pressure
Retirement living entered 2025 with unprecedented demand certainty, a material policy reset, and intensifying execution risk.
The commencement of Support at Home and the new Aged Care Act in November 2025 marked a clear transition from reform design to operational reality. Expectations around consumer rights, quality, transparency and provider accountability are now enforceable.
For the sector, the challenge is no longer one of intent — but delivery at scale.
Demand Certainty Is No Longer the Question
Demographic signals are unambiguous. Australia’s population aged 75+ is forecast to grow by more than 40% by 2030, reaching approximately 3.7 million by 2040 (ABS, 2024). That demand is already visible in market performance:
- Retirement living occupancy sits at approximately 96% nationally
- More than 3,000 aged-care-eligible patients remain in hospital beds — a 25% increase in just three months (ABC News, 2025)
In practical terms, demand risk has largely been removed from the equation. The binding constraint is now capacity.
The Capacity Gap Is Widening
Despite clear demand signals, supply expansion remains materially below what is required. Current forecasts indicate:
- Approximately 12,000 new retirement living units are expected to be delivered by 2030, against an estimated requirement of 67,000 (Bolton Clarke, 2025)
- Around 800 residential aged care beds were delivered in 2024–25, compared with an estimated annual requirement of more than 10,600 (ABC News, 2025)
This gap is no longer theoretical. Its consequences are already visible across the health system, with hospital bed block now a structural issue rather than a temporary dislocation.
The shortfall reflects a compounding set of constraints rather than a single point of failure — planning and approvals, capital deployment, construction capacity and workforce availability are all contributing.
Reform Has Raised Expectations — and the Bar for Execution
The Aged Care Act 2024 introduces a rights-based framework that fundamentally changes the compliance equation. Providers are now expected to demonstrate measurable outcomes and lived experience, not simply adherence to inputs or process.
At the same time, Support at Home consolidates existing in-home care programs, with price caps scheduled from 1 July 2026. This transition is reshaping pricing structures, funding flows and service models, creating short-term friction at a time when labour availability and margins are already under pressure.
While the sector’s long-term fundamentals remain compelling, performance over the next five years is likely to be determined less by demographics and more by execution capability.
Organisations that move early to:
- Accelerate development pipelines
- Invest in workforce attraction, training and leadership
- Integrate housing, care and health services
- Embed data, quality measurement and consumer experience
are more likely to emerge as leaders in the next phase of the market.
Those that wait for further policy clarity or more favourable conditions risk falling behind as demand continues to outpace supply.
What We Saw Repeatedly Across Projects
Beyond sector-level data, 2025 reinforced several patterns at a project and portfolio level.
Across projects and portfolios, we repeatedly saw:
- Assumptions made early that were not tested deeply enough
- Product, pricing and sales strategies drifting out of alignment
- Teams underestimating delivery and transition complexity
- An increasing need for project resets, refinement and structured decision frameworks
The projects that performed best were those that paused early to test their assumptions, ensured strategy and execution remained aligned, and were prepared to change course when the evidence required it.
What This Means Heading Into 2026
Looking ahead, the implications are clear.
For developers and operators, strategic clarity and evidence-led decision-making are becoming non-negotiable. The cost of misalignment — in product, pricing or delivery — continues to rise.
For investors, understanding execution capability and operating resilience is just as critical as understanding market opportunity.
For government and policymakers, the convergence of housing and care highlights the need for coordinated planning, approvals and delivery frameworks to avoid compounding system pressure.
A Quiet Look Ahead
As we move into 2026, the focus for Channel is on building deeper capability, stronger alignment and more meaningful collaboration with the people shaping Australia’s housing future.
That includes evolving how we gather and share insight, how we work with senior decision-makers, and how we create space for informed, strategic conversations beyond the noise.
More on that soon.
Discussion
From a development and operating perspective, where do you see the greatest constraint on scaling retirement living supply today — planning and approvals, capital deployment, workforce capacity, employee capability, operating models, or something else entirely? And what would most meaningfully unlock progress over the next five years?
Author note
This article was written by Tiffany Richardson, with the retirement living analysis developed in collaboration with Helen Swanson. It reflects insights drawn from Channel’s research, project work and strategic advisory delivered across more than 60 local government areas throughout Australia over the course of 2025.
