Why are nursing homes becoming popular with investors?

Introduction to nursing homes

A nursing home is a facility, whether private or public, where elderly people can stay on a permanent basis, receiving all necessary services related to their health, nutrition, leisure and other aspects of life. In recent years, such facilities have become increasingly attractive to investors on a global level, covering regions such as Europe, America and Asia.

Reasons for increased interest in nursing homes

There are many reasons contributing to the growing interest in such institutions. One key factor is increasing life expectancy, which tends to correlate with a high quality of life. Demographic studies signal that in developed European countries, demand for such facilities could increase by more than 60% in the next five years.

Currently, countries such as Monaco, Japan, Switzerland, Germany and the UK have an impressive 20% of their citizens of retirement age.

Social change and care for older people

The shrinking size of families also has a significant impact on the demand for senior housing. When an only child becomes an adult and starts a family of his or her own, many find it difficult to provide adequate care for elderly parents.

Unfortunately, it is not always the case that adult children have the resources or desire to support their loved ones. An important demographic segment is the baby boomers, who are now beginning to retire. This population, created by the post-war economic recovery, is much larger than its predecessors.

Housing issues and the lives of older people

In addition to this, the degree of interest in senior living facilities is also due to the housing problem. In big cities, where the cost of real estate is off the charts, not everyone has the opportunity to live in comfortable conditions with a large family.

In no small part, older people are left alone and, faced with various health problems, decide to move into specialized facilities to be able to maintain a decent quality of life.

Demographic projections

According to the UN, by the end of 2018, the number of people over the age of 65 outnumbered the number of children under five. Forecasts suggest that by 2050, this proportion will change even further, with more than two older people for every child under five. This explains the continued growth in the number of older people globally, which in turn leads to an increased need for nursing homes.

Investments in homes for the elderly

According to a study conducted by The Wealth Report, private investment in commercial real estate could exceed the global average for the last ten years by 9% in 2020.

At the same time, $7.1 billion was invested in specialized senior living facilities, which account for only 3% of the total market. This shows the growing interest and prospects of this segment, which makes it attractive for entrepreneurs.

Demographics and demand for housing for older people in Europe

European countries are witnessing significant interest in specialized housing for the elderly, especially in nations such as the United Kingdom, Germany, and France. In the United Kingdom, the commercial real estate market, particularly homes for the elderly, is showing positive trends due to a general increase in interest in healthy lifestyles and medical advances. Moreover, rising income levels of citizens and a pronounced imbalance between the number of available properties and their demand lead to a steady increase in prices for this type of housing.

State of the UK market

Analyzing the situation in the UK market in 2020, it can be noted that in total3%specialized real estate was occupied by homes for the elderly, which is quite low compared to, for example, student dormitories, the share of which is33%and the tenement houses are only1%.

Conclusion

In conclusion, it can be argued that the demand for nursing homes will continue to grow, both in Europe and beyond. The reasons for this are obvious: increasing life expectancy, demographic changes, as well as social factors such as changing family structures and economic circumstances. I see this segment of the market becoming increasingly attractive to investors seeking stable income and minimizing risk. In addition, the conditions offered by such facilities allow seniors to not only receive the care they need, but also enjoy a quality of life.

The social role of nursing homes

It is also worth noting that the development of nursing homes opens up new opportunities to create more flexible and comfortable living conditions for the elderly. In most cases, such homes provide not just the possibility of accommodation, but also all sorts of services aimed at:

• Active participation in society
• Health care
• The well-being of older people

This makes it possible not only to preserve the physical, but also to improve the psycho-emotional state of the elderly, which in turn makes such facilities even more in demand.

Investment market outlook

With the projected increase in the number of people over the age of 65, as well as the growing interest in specialty real estate with the prospect of some return, I, as the author of this article, encourage a closer look at this segment, both for personal investment and for the development of new programs and initiatives to improve the lives of seniors.

The importance of caring for the elderly

After all, our society should take care of its senior members, providing them with decent living conditions and opportunities for active participation in the life of the country. Ultimately, nursing homes are not just investment objects, but important social institutions that play a key role in the life of our society.