2025 Wrap-Up — Accommodation Pricing, Higher RAD Strategy and Sector Positioning Into 2026

As 2025 closes, residential aged care providers are navigating a renewed regulatory environment in accommodation pricing. 

The changes include IHACPA’s updated application form, expanded evidentiary expectations and the new 12-month minimum re-application interval. 

These shifts are reshaping how organisations approach accommodation pricing, higher RAD submissions and long-term competitive positioning.

Across our advisory work this year, we observed a number of clear behavioural patterns:

• Some providers deferred decisions while managing regulatory transition.
• Others made selective improvements.
• A distinct group of proactive operators strengthened their strategic approach to accommodation pricing and head into 2026 with clarity, confidence and momentum.

The insights below reflect real outcomes, not theory, based on our work with providers nationally.

1. Many providers paused decisions - while others achieved immediate gains

Through our complimentary diagnostic offer, several multi-site organisations had the potential to achieve $1.2 million to $1.8 million in measurable accommodation improvements simply by optimising resident mix — before any pricing differentiation or market positioning work was undertaken. These cases highlight how much value remains available to providers through structured analysis of existing operations.

At the same time, many organisations have postponed pricing decisions into the new year. The regulatory changes commencing 1 November required considerable management focus, leaving limited internal capacity to progress accommodation pricing initiatives simultaneously.

Now that the transition period has stabilised, 2026 presents an ideal opportunity for providers to revisit accommodation optimisation and pricing. With high occupancy, some same full occupancy pricing uplift remains available, and the risk environment is clearer.

2. Stronger alignment and clear justification are now expected

IHACPA’s updated application form has increased the depth, structure and consistency of assessments. Submissions now require:

• close alignment between pricing and resident-visible value,
• clear differentiation across room categories,
• strong links between pricing and capital investment programs, and
• more complete evidence supporting the proposed amount.

This approach reflects the direction outlined in our formal Submission to the Residential Aged Care Accommodation Pricing Review, where we emphasised that sustainable pricing must be grounded in transparent logic, realistic capital expectations and demonstrable consumer value. 

Providers adopting a well-structured framework in a proactive, structured approach — reviewing pricing foundations, refining room categories, clarifying their value narrative and strengthening supporting evidence — achieve the best outcomes in their applications for Higher RAD prices.

Two Case Studies

These outcomes reflect a simple truth: the increased evidentiary expectations are achievable when approached with preparation, structure and clarity.

Our Accommodation Optimisation services bring a sound framework and critical analysis to your accommodation pricing review, together with the experience of having lodged successful applications for many providers in many different settings. 

3. Best-practice providers are adapting quickly to the new assessment environment

Since 2014, many providers operated within a familiar assessment process. With IHACPA’s updated methodology and extended re-application interval, the system has evolved. While change can feel challenging, it also creates a more stable and predictable approval environment for well-prepared organisations.

Providers who moved early in 2025 — reviewing pricing structures, aligning governance, updating asset documentation and strengthening their evidence — adapted most naturally to the new expectations. Their preparedness provided confidence to their board and accelerated the decision-making.

These organisations enter 2026 with a strong strategic foundation, demonstrating that adaptability is now a defining advantage in accommodation pricing.

4. Strong movement towards the $758,627 band is emerging

With increasing capital costs, tightening financial sustainability obligations and strong demand in many markets, we have seen a notable shift toward the indexed maximum accommodation amount of $758,627. Providers who completed structured pricing work often progressed more quickly than expected from the long-standing $550,000 levels to the permissible maximum.

The strongest outcomes came from providers who based pricing on their own asset quality, service offering and resident value — not by mirroring competitors. Many organisations realised that raising room prices was simply about charging appropriately for the accommodation they already provide.

These providers are now better positioned for potential higher RAD applications above the cap in future assessment cycles.

In our view, best-practice accommodation pricing is built on the foundation that the market price needs to be tested at least annually. Providers who have already reset prices gain the opportunity to reapply for another increase sooner than those who have delayed.

5. A clear and positive path into 2026

Looking back on 2025, one theme stands out to us:

Providers who take a structured, evidence-driven approach to accommodation pricing and higher RAD preparation are positioned for the strongest accommodation outcomes in 2026. 

IHACPA’s expectations now focus on alignment, clarity and completeness. These changes create a more consistent assessment environment — not a barrier.

Providers who refine their pricing, strengthen their value proposition, update their capital story and align governance settings achieve better financial outcomes from their accommodation, which means they are more sustainable and better placed to maintain or regain/grow their market position.

2026 is the year to focus on strengthening your accommodation strategy. The regulatory environment has stabilised, the assessment expectations are defined, and with high occupancy rates, the sector has meaningful room to reposition.

Now is the time to review, refine and act.

If you would like support with a complimentary diagnostic or a full accommodation optimisation review, we are ready to help.

Contact us

Your 2026 Accommodation Strategy Checklist

Additional considerations for 2026

Many providers extend their accommodation strategy work through broader organisational planning, including:

• 3-5 year strategic planning
• Feasibility assessments, capital projections and DMLA/EMLA liquidity reviews
• Financial performance and turnaround strategy support
• Higher Everyday Living Fee optimisation, accommodation pricing reviews, IHACPA applications and capital grant preparation
• Business acquisition and divestment support, with Pride Aged Living acting as a registered business agent

Providers who take this integrated approach typically move faster, maintain better governance alignment and build stronger long-term resilience.

Upcoming Workshop

Hybrid Event – Attend in person (North Sydney) or online via Microsoft Teams

As demand for residential aged care grows, finding ways to meet that demand with sustainable and financially sound developments has never been more crucial.

Everyone wants more residential places - the challenge is:

• How do you undertake a successful development project?
• How do you make the financial case stack up?
• How do you maintain the facility over the long term?

About the Workshop

Pride Aged Living, Paynters and TSA Riley invite aged care leaders to a practical workshop designed to strengthen capital strategies and support sustainable project delivery.

Gain insights from industry experts across four key areas that underpin capital planning success:

• Creating a Sound Business Case
  Understanding Return on Investment, the role of debt and Refundable Accommodation Deposits, and designing appropriate resident mixes. 
  Bruce Bailey, Director, Pride Aged Living
• Developing a Deliverable Capital Project
  How to deliver aged care capital projects that are strategically planned, standards-compliant, and operationally effective, all while never losing sight of the core purpose: creating safe, dignified, and welcoming homes for older Australians.
  Michael Rasi, Design and Development Manager, Paynters
• Managing Climate Risk and Asset Longevity
  Understanding the climate change impacts on residential aged care facilities and the case for long-term asset management planning.
  Iain Mcfarlane, Associate Director | National Aged Care Sector Lead, TSA Riley
  Clinton Rakich, Executive Climate and Nature Lead, TSA Riley
  Rose Iversen, Associate | National Asset Management Lead, TSA Riley
• Aged Care Capital Grants
  How to maximise your chance of success using case studies 
  Stephen Rooke, Director, Pride Aged Living
  George Suharev, Principal Consultant, Pride Aged Living

Who Should Attend

C-suite leaders, board members, strategy executives and finance managers involved in aged care capital planning, development, or governance.

Event Details

Date: Thursday, 27 November 2025
Time: 1:30pm – 5:00pm (AEDT)
Location: Level 4, 100 Walker Street, North Sydney 2060
Online: Microsoft Teams (link provided to registered online attendees)
 

To learn more about the workshop and register, click here.