At least 50,000 nursing home beds will be required between now and 2051 to meet the needs of the State’s aging population, according to Sherry FitzGerald. This equates to about 1,800 new beds a year.
The property agent’s commercial research division said the supply of nursing home beds was close to capacity and more stock would be needed to meet future demand.
The total stock of long-term nursing home beds in Ireland stood at about 30,900 in the second quarter of 2023. This figure includes those run by the private, voluntary and public sectors.
Census 2022 found that 28,450 individuals aged 65 years and over resided in nursing homes last year, suggesting an occupancy rate of at least 92 per cent, Sherry GitzGerald noted.
The Census data also shows that the ratio of individuals aged 65 years and over to those aged between 15 and 64 years increased to 23.1 per cent in 2022 from 20.4 per cent in 2016.
Population forecasts from the Central Statistics Office (CSO) indicate that by 2051, an estimated one in four people will be in the 65 years-plus age cohort as a result of increased life expectancy and declining fertility rates.
“This will impact the demand for nursing home beds,” said Jean Behan, senior economist for Sherry FitzGerald Research.
It said its estimated need for a 161 per cent increase in the supply of beds to meet demand assumed no further nursing home closures.
Many nursing homes have come under increased pressure to meet operational costs, however, indicating that further closures are “inevitable”, Sherry FitzGerald said, citing what it described as the “inadequate” rates paid to private nursing homes under the Fair Deal scheme.
“The equitability of the current system is certainly a point of contention amongst many operators, especially in the face of increased costs. Increases in Fair Deal have, in many instances, been outstripped by inflation. The frustrations of privately run homes is becoming significantly louder,” said Sherry FitzGerald associate director Dermot Hughes.
An analysis of the spread of nursing home beds across the State shows that about 26 per cent or 8,050 are in Dublin. A further 12 per cent are in Cork, with Galway and Limerick accounting for 6 per cent and 4 per cent, respectively.
A comparison between the number of beds in each county with the estimated number of individuals requiring long-term nursing home care suggests that there are currently not enough beds to meet demand in seven counties.
A further seven counties have ratios of beds to requirements of more than 110 per cent, including Kildare, Wicklow, and Meath. But the high occupancy rate across the State “leaves little room for spare capacity”, according to Sherry FitzGerald.
Investment activity in the nursing home sector was “very robust” during 2021 and 2022, it added, with Belgian real estate investment trusts (REITs) Aedifica, Care Property Invest and Cofinimmo accounting for the majority of acquisitions over the two-year period.
While investment in nursing homes was curtailed in 2023 by rising interest rates and elevated building and construction costs, the outlook is more positive, it said.
“While the current year witnessed a paucity in activity compared to 2021 and 2022, there remains a clear need for further investment within the market, to keep pace with the State’s shifting demographics,” said Mr Hughes.