Senior Living Market: Size and Industry Growth

This article was written by our expert who is surveying the industry and constantly updating the business plan for a retirement home.

Who wrote this content?

The Dojo Business Team

A team of financial experts, consultants, and writers

We're a team of finance experts, consultants, market analysts, and specialized writers dedicated to helping new entrepreneurs launch their businesses. We help you avoid costly mistakes by providing detailed business plans, accurate market studies, and reliable financial forecasts to maximize your chances of success from day one—especially in the retirement home market.

What is the global market size for senior living (revenue and residents)?

The senior living market generates about USD 260 billion in revenue in 2025.

This includes retirement homes and related models (independent living, assisted living, memory care, skilled nursing). Estimates indicate “tens of millions” of residents globally, with major supply gaps in mature markets. The UK alone highlighted a need for hundreds of thousands of additional units to meet demand.

North America is the largest revenue base, while Asia–Pacific is scaling quickly from a lower installed base. Penetration rates remain low in several European countries, indicating room for growth. You’ll find detailed market insights in our retirement home business plan, updated every quarter.

For a new retirement home, this confirms a large addressable market if you match local acuity needs and price points.

Secure third-party demand studies to refine the service mix before committing to construction or lease-up assumptions.

How fast has the senior living market grown over the past 5–10 years?

The market has expanded at roughly 5–6% annually over the past decade.

Growth was supported by aging populations, increased longevity, and rising acceptance of purpose-built senior housing. After the pandemic dip, absorption rebounded strongly, bringing occupancy back on an upward path.

For retirement home operators, the last cycle shows resilience—demand recovers and stabilizes with proper infection control and staffing models. This provides confidence for lenders and equity partners evaluating new projects.

It’s a key part of what we outline in the retirement home business plan.

Assume variability year to year, but plan for mid-single-digit structural growth.

What is the projected CAGR for the next 5–10 years?

Projected global CAGR is about 5.8–5.9% through 2030–2032.

This forecast reflects steady demographic tailwinds and a widening care gap in many regions. It also assumes ongoing price increases to offset labor and operating inflation.

For a retirement home launch, a ~6% revenue CAGR baseline helps frame underwriting, but sensitivity-test occupancy and wage growth. Consider scenarios with slower absorption or higher payroll to maintain lender comfort.

We cover this exact topic in the retirement home business plan.

Align debt terms with realistic lease-up and stabilization timelines.

Which regions are growing fastest and what are the market shares?

Asia–Pacific is the fastest-growing region, while North America currently holds the largest share.

Europe remains developed yet undersupplied in places like the UK, and emerging markets are beginning to formalize senior housing. The mix varies by care model and funding systems.

Which demographic trends are driving demand for retirement homes?

• Rapid growth of the 60+ and especially 80+ population cohorts through 2035 and beyond.
• Life expectancy gains increase years lived with chronic conditions requiring assisted living or memory care.
• Falling birth rates and smaller households reduce family caregiving capacity, accelerating institutional demand.
• Urbanization concentrates seniors near services, boosting demand for purpose-built communities.
• Rising middle-class wealth in APAC expands the private-pay segment.

Which senior living arrangements are most in demand and how is demand shifting?

Independent living is the largest segment by revenue share; assisted living and memory care are the fastest growers.

Seniors are prioritizing autonomy, wellness, and socialization in independent living while higher-acuity needs fuel assisted living and memory care growth. Skilled nursing remains essential for complex care but faces reimbursement and staffing pressures.

For a retirement home, a mixed model—independent/assisted with a dedicated memory care wing—can capture multiple demand pools and extend length-of-stay. Program design should integrate rehab, telehealth, and lifestyle amenities for differentiation.

This is one of the strategies explained in our retirement home business plan.

Warm shells that convert between levels of care protect asset value as local demand evolves.

What are typical occupancy rates and how are they trending?

Occupancy averaged ~87.8% pre-pandemic, dropped during COVID, and has been rebounding toward the low-80s and climbing in 2025.

Absorption has been strong as new supply remains constrained in many metros. Operators report steady move-ins with improving unit economics as rate increases hold.

What is the average monthly cost per resident and how is pricing trending?

Monthly private-pay rates vary by country, city, and care level; in the U.S., assisted living commonly ranges around USD 3,500–5,000 per month, with premium offerings higher.

Rates have risen due to wage inflation, rising benefits, and amenity upgrades. Operators increasingly use annual escalators to preserve margins, while offering tiered packages to maintain affordability.

For a new retirement home, publish transparent rate cards by care level and services, and model sensitivity to payroll shocks. Consider bundled wellness memberships to lift ancillary revenue.

Get expert guidance and actionable steps inside our retirement home business plan.

Benchmark pricing locally every quarter to align occupancy with target margins.

How do government policies and regulations shape growth?

Subsidies, long-term care insurance, and quality standards directly influence demand and feasibility.

In North America, Medicaid/Medicare interaction and state regulations impact staffing ratios, reporting, and reimbursements. In Asia–Pacific, new policies invite private capital and professional operators to expand capacity.

For retirement homes, compliance design (life-safety, accessibility, infection control) must be embedded from schematic design. Align with local licensing requirements early to avoid costly redesigns.

This is one of the many elements we break down in the retirement home business plan.

Maintain a regulatory tracker and budget for audits and staff training.

What investment and consolidation activity is occurring, and who are the major players?

Capital flows remain active and consolidation continues across portfolios and regional platforms.

Large operators (e.g., Brookdale, Sunrise, Life Care) and real estate capital pursue scale for operating efficiency and technology investment. Investor surveys show continued appetite for seniors housing despite cost of capital headwinds.

What operational challenges do retirement home providers face?

• Staffing shortages and rising wages, especially for caregivers and nurses.
• Real estate costs and construction inflation affecting new supply and refurbishments.
• Regulatory compliance burdens, audits, and documentation requirements.
• Balancing occupancy growth with care quality and infection control.
• Technology adoption and integration across EHR, monitoring, and resident engagement.

Which innovations and new business models are shaping competitiveness?

• Technology-enabled care: telemedicine, AI monitoring, smart fall detection, predictive staffing.
• Home-based and hybrid models that extend services outside the building and feed in-house referrals.
• Wellness-first designs: fitness, nutrition, social programming, cognitive health.
• Robotics and automation for food service, cleaning, and logistics.
• Flexible unit designs enabling conversion between independent, assisted, and memory care.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.

Sources

1. Coherent Market Insights – Senior Living Market
2. JLL – Senior living for ageing populations
3. NIC MAP – Industry forecast 2025
4. Freddie Mac – Seniors Housing Recovery
5. KPMG – Rise of the Silver Generation
6. Precedence Research – Assisted Living Market
7. Senior Housing News – 2025 Executive Forecast
8. NIC MAP – The Impending Age Wave
9. JLL – Investor Survey & Trend Outlook