The strength is led by surging activity in Western Sydney and underpinned by historic levels of government investment and a maturing development pipeline.
Western Sydney continues to dominate the metropolitan landscape, accounting for 34.5 per cent of all childcare sales across metropolitan NSW in 2025, and representing over 40 per cent of the state’s development pipeline, as population growth and dual-income household dynamics drive demand for early education infrastructure.
“This report reinforces Western Sydney’s appeal as a cornerstone of the childcare investment market,” said Peter Vines, managing director of RWC Western Sydney.
“The region’s expanding population, family-centric demographic, and growing need for accessible care mean demand is structural, not cyclical. For investors, it’s a powerful combination of yield stability and long-term necessity.”
Some key findings from the report include:
Unprecedented government investment
NSW continues to be the nation's primary beneficiary of federal childcare funding, receiving $4.5 billion in annual subsidies - 31.3 per cent of the national total - supporting care for 463,160 children across 327,290 families. The 2025 Federal Budget's $5 billion universal child care commitment, including the "3 Day Guarantee" and the $1 billion Building Early Education Fund, further cements the sector’s fundamentals and long-term viability.
The package, which also includes $3.6 billion in wage support for educators, is aimed at enhancing accessibility and addressing labour shortages that have challenged operators in recent years.
Development pipeline and yields signal confidence
There are currently 669 childcare development projects across NSW, with 343 at the DA approval stage. While construction activity had slowed due to cost pressures, it is recovering, with 44 projects currently under construction. Western Sydney remains the state’s development engine, with Blacktown (67), Liverpool (61), and The Hills Shire (44) leading in active projects.
Investor confidence remains high, with yields holding steady at 4.74 per cent in metropolitan areas and 5.48% per cent in regional markets, showcasing the sector's defensive appeal as the interest rate cycle enters a compression phase.
"Yields have remained remarkably stable through the cycle," Peter Vines said. "Even in a more cautious interest rate environment, childcare assets continue to provide security, with government funding offering reliable revenue streams."
Investor trends and market segmentation
Childcare asset buyer trends have segmented by price point, with sub-$5 million centres attracting the widest investor pool, including first-time commercial buyers seeking net lease structures and land tax-exempt properties. Assets above $7 million, while still attractive, are experiencing extended marketing periods, with operators and investors alike managing exposure to staffing pressures and scale-related risks.
As development site owners face DA expiry timelines, activity has intensified. Many are amending approvals to enable more cost-efficient single-level builds amid stabilising construction costs.
"Childcare is increasingly seen as a long-term infrastructure play," said Peter Vines. "Whether you’re a private investor or institutional fund, the combination of demographic certainty, yield resilience, and government support makes the NSW market, especially Western Sydney, an enduring proposition."
NSW Childcare Snapshot (2025 YTD):
Children in care: 463,160
Average weekly usage: 33.9 hours
Average hourly fee: $14.15
Total 2025 transaction volume: $123.3 million
Metropolitan yield average: 4.74 per cent
Regional yield average: 5.48 per cent
