The market for nursing homes - Germany

1.1 Definition and scope of the study

Nursing homes, also known as homes for the elderly or retirement homes, are facilities that provide housing and assistance with daily activities for elderly people. Residents usually live in the facilities permanently and are cared for by nursing professionals who attend to their medical, nursing, and social needs. They usually offer different types of care, depending on the individual needs of the residents. It goes from care for seniors with limited mobility to intensive medical care for people with serious illnesses or disabilities.

The market for nursing homes in Germany is characterized by a high number of facilities and operators, whose size and quality vary significantly. The facilities range from large nursing homes with thousands of beds to small family-run facilities. The quality as well as the prices of the facilities also vary greatly and often depend on the type of facility as well as the operator and the location.

The number of people needing care in Germany at the end of 2021 was more than 4.96 million. Only 1 out of 6 people among these 5 million are indeed taken care of in nursing homes [Statista, 2021]. Forecasts promise a further increase in the need for care facilities for the elderly. The main reason for this is demographic change, which is leading to a continuous increase in the number of elderly people as a result of the steadily growing life expectancy. This growth should slow down from 2055 in Germany, as the baby boomers from the 1950s and 1960s will eventually be replaced by baby boomers with a lower birth rate [Statista, 2023].

Due to the high cost of operating nursing homes and increasing demand, many private investors have invested in the nursing home market in Germany. Consequently, the number of private operators has increased a lot, and the market has become a competitive one. Government regulation and the financing of the nursing market also play an important role in Germany.