There's no getting away from the fact that Australia's population is ageing. According to government data, almost 20% of the population will be aged 65 and over by 2036, up from 14% in 2016.
This is expected to result in a strong and sustained rise in demand for healthcare services over the next couple of decades.
Which I believe makes the healthcare sector one of the best areas to look at when making long-term buy and hold investments.
Two shares which I would consider today are listed below:
Japara Healthcare Ltd (ASX: JHC)
While this aged care provider does carry regulatory risks relating to its funding, I believe the rewards on offer from a long-term buy and hold investment are compelling. Demand for aged care services is expected to grow strongly as Australia's population ages. So much so there are concerns that supply may not be able to cope with demand. I believe this puts Japara in a strong position to grow at an above-average rate from FY 2019 onwards when it reaps the rewards of the investments it has been making this year and occupancy levels return to normal levels again. I would suggest investors consider buying on today's weakness.
Ramsay Health Care Limited (ASX: RHC)
As demand for healthcare services increases, I expect Ramsay and its network of private hospitals and community pharmacies will be well-positioned to profit. Although private health insurance participation rates have been falling, I suspect that this is just a short term headwind and will improve again when wage growth returns. Ultimately, I think Ramsay could prove to be one of the best buy and hold investment options on the local market.
