3 ASX stocks to benefit from Australia's ageing population

Ageing demographies is a strong tailwind.

| More on:
An older couple hold hands as they bounce happily high in the air.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

ASX stocks that benefit from long-term tailwinds can provide a real boost for earnings over the long term. I think the ageing population tailwind is strong and one of the clearest tailwinds that's going to happen.

The 2023 intergenerational report said over the next 40 years the number of Australians aged 65 and over will more than double and the number aged 85 and over will more than triple. The number of people aged at least 100 is expected to increase six-fold.  

Which businesses could benefit from the growing number of older Australians? I think the three ASX stocks below could be leading beneficiaries of the tailwind.

Challenger Ltd (ASX: CGF)

Challenger is a leading ASX financial share that provides annuities. This enables people to turn their capital into a guaranteed source of income. Retirees may appreciate the level of certainty that an annuity can provide.

As the number of older Aussies increases, it should mean a growing amount of people moving from the accumulation phase to the retirement phase with their money, which could lead to stronger demand for annuities.

Australian superannuation assets are expected to increase to more than $9 trillion in the next 20 years, with 2.5 million Australians entering retirement over the next 10 years.

In the FY24 third quarter, group assets under management (AUM) grew by 6% for the quarter to $124 billion.

Lifestyle Communities Ltd (ASX: LIC)

This company develops, owns and manages affordable independent living residential land lease communities.

The business is benefiting from ongoing rental growth and the completion of new communities. Ten projects are currently in active development, and two more projects are scheduled to launch in 2024.

The ASX stock saw 'annuity' revenue increase 16% in the FY24 first half, driven by higher rental revenue from an increased number of homes under management and the inflation-linked 6.6% year over year rental increase. Lifestyle Communities says one of its key selling points is providing affordable housing to Australians aged over 50.

Its site rental income has grown from $14.5 million in the first half of FY22 to $20.5 million in the first half of FY26.

Medibank Private Ltd (ASX: MPL)

A growing number of older Aussies may decide to sign up for private health insurance so they can have any elective surgeries that they plan to have.

Australia's growing population is also helping increase the overall demand for private health insurance.

Despite the current economic challenges and Medibank's cyber attack, it managed to grow its Australian policyholders by a net 0.2% over the six months to 31 December 2023, while net non-resident policy unit growth was 12% over the six months to 309,000 (and it rose 34% over 12 months to December 2023).

I think the growing number of policyholders will help the company's underlying net profit over the coming years and help push the Medibank share price higher.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Challenger. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Opinions

Shocked office worker staring at computer screen with colleagues working in the background.
Opinions

2 ASX shares with earnings results that shocked me this week

These two results really surprised me.

Read more »

Emotional euphoric young woman giving high five to male partner, celebrating family achievement, getting bank loan approval, or financial or investing success.
Opinions

1 ASX dividend stock up 40% in 12 months that I'd buy

I’m backing this company to deliver pleasing dividends.

Read more »

A smiling man take a big bite out of a burrito
Opinions

Is it worth me buying Guzman Y Gomez shares for $40 after a 33% rise?

Is the valuation too spicy or is this a good time to invest?

Read more »

Businessman smiles with arms outstretched after receiving good news.
Best Shares

Here are 3 of my most profitable investments in ASX shares ever (and which one I'd buy more of right now)

I reckon only one of these shares is worthy of a buy today.

Read more »

An ASX investor relaxes on her couch as the Harvey Norman share price drops due to the shares trading ex-dividend from today.
Opinions

This ASX 300 stock soared 15% after reporting. Time to buy?

This business is a great operator. Is it time to buy?

Read more »

Boys making faces and flexing.
Opinions

3 ASX shares for Australian investors worried about Trump tariffs

These stocks could offer defensive characteristics.

Read more »

A man leans forward over his phone in his hands with a satisfied smirk on his face although he has just learned something pleasing or received some satisfying news.
Technology Shares

Life360 shares: A generational opportunity to get rich?

I think the Life360 share price could more than double again in the year ahead.

Read more »

A woman makes the task of vacuuming fun, leaping while she pretends it is an air guitar.
Opinions

Opinion: This is one of the best ASX growth shares to own for the next 5 years

This stock is rapidly growing, and I’m excited about it.

Read more »