Early Childhood Education Sector is Booming

New Zealand has a high and growing participation rate in early childhood education making the sector a very popular investment choice.

The Ministry of Education has said that between 70 and 80 new childcare centres have opened each year over the past three years in the Auckland region, a trend they expect to continue. Time spent in early childhood education has risen from 13.5 hours a week in 2000 to today's average of 21.7 hours.

Demand for childcare developments is high among commercial property investors. Supply is tightly held with only small numbers childcare centres coming on the market, driving prices upwards. Investors appreciate the sector's growth potential as well as its unusually high level of reliability and security. The Government has a goal of 98 per cent of children attending an early childhood service before starting school and is setting more public funding aside to help achieve it.

Auckland alone has 1432 early childhood education services, 77 of which were licensed last year. There are currently applications for another 15 Auckland childcare centres that may potentially open this year.

The increasing demand for childcare services is also being driven by population growth. Auckland's 1.5 million population is expected to continue to grow by half a million over the next 10 years, meaning there will be more pressure on existing childcare providers and creating an opportunity for smart property investors.

With our high property prices, investors looking to build in areas where there is an under-supply of childcare centres in Auckland have faced some tough competition from residential developers. However, the recent increase in government funding is triggering new activity and more centres look set to be built as investors are drawn to the childcare sector.