As childcare conditions diverge across Australia, brokers who present a clear local story will have the strongest chance of lender approval
Childcare remains an active sector for broker-introduced lending, but the picture across Australia in 2026 is far from uniform. Centres in catchments with strong demand, good reputation and experienced operators are performing well, while centres in more competitive or cost-pressured locations are finding conditions harder.
The difference is being driven by local market conditions. A centre in a growing suburb with strong demand, a good reputation and an experienced operator can look very different to one in an area where new supply has lifted competition or where staffing costs are harder to manage.
“What we are seeing in 2026 is not a single national story. It is a series of local markets behaving very differently,” Karen Carter (pictured), BOQ General Manager Commercial Third Party said.
For brokers, this means the local story matters. Population growth, family demographics, nearby competitors, occupancy trends, staff availability and the operator’s track record are now just as important as the broader strength of the sector.
More than a property play
Childcare should not be viewed only through the lens of property. Operator quality, trading history, compliance record, staffing model and sustainable occupancy all shape how a proposal is assessed.
“Lenders are looking well beyond the headline number. They want to understand how repeatable the earnings are and how the business will perform if conditions tighten,” Carter said.
Industry trends shaping childcare in Australia
Across Australia, childcare demand remains underpinned by working families, population growth and government policy settings designed to improve access to early learning. Subsidy reforms and increased public investment are expected to support utilisation, particularly for families where affordability has been a barrier.
Government policy is also changing the shape of demand. Reforms that improve access to subsidised care can lift utilisation, particularly in lower-income, outer-metropolitan and regional catchments. But policy support does not remove the need to understand each local market. It can lift demand, but it does not guarantee every centre will perform well.
Workforce shortages remain one of the biggest challenges. Centres need qualified educators to meet staffing ratios and maintain quality. When educators are hard to find, centres may face higher wages, more rostering pressure and limits on how many children they can safely and legally accept.
This is one reason margins are under pressure. Wages are rising, rent and operating costs are higher, and compliance requirements are increasing. Centres with strong occupancy and good systems can absorb these pressures more easily. Centres still building enrolments, or operating in oversupplied areas, have less room to move.
Regulation is another important factor. Licensing, quality ratings, child safety obligations and staffing requirements are central to the sector. They support better outcomes for children and families, but they also add cost and complexity for operators.
The market is also seeing continued consolidation. Larger operators and experienced groups are looking for centres that can be integrated into stronger operating platforms. Scale can help with staffing, systems, compliance and purchasing power, but smaller high-quality operators can still perform well where they have a strong local reputation and good occupancy.
There is also more focus on specialist and higher-quality care. Families are looking closely at quality, reputation, inclusion support, educational programs and the overall centre experience. Centres that can show strong quality outcomes and meet the needs of their community are better placed to hold occupancy and pricing.
Broker considerations
For brokers, these industry trends change how childcare opportunities need to be presented. Strong demand and government support are positives, but workforce shortages, margin pressure, regulation and uneven supply mean each centre needs a clear local story.
A strong submission for a going concern proposal should explain the operator’s experience, current financials, occupancy trends, staffing position, compliance record, local competition, lease terms and the factors that support future demand. Bringing this information forward early helps reduce back and forth and gives lenders a clearer view of why the opportunity is well placed to perform.
BOQ support for quality childcare operators
BOQ remains open to quality childcare opportunities, with a focus on experienced operators, sustainable occupancy, sound financials and a clear local market story.
“At BOQ, we are very open for business in childcare. The key is making sure the proposal is clear, the operator is experienced and the information gives credit confidence from the start,” Carter said
BOQ’s childcare lending settings give brokers clear guidelines when assessing whether a proposal may fit. For established centres in eligible metropolitan or regional locations, BOQ can consider funding for purchase, expansion, working capital or refinance. The policy includes LVRs of up to 70% for owner operators, and up to 50% for leasehold going concern where criteria are met. BOQ also takes into consideration factors such as operator experience, occupancy, licensed places, serviceability, and security. Where a proposal is well-structured and the operator has a strong track record, there can be scope to discuss the right facility structure to support the customer's needs.
As the sector becomes more selective, brokers can help by bringing together the operator, market and financial story upfront. BOQ is here to support quality operators with clear, well-prepared proposals grounded in the realities of the market.
Disclaimer: Bank of Queensland Limited ABN 32 009 656 740 AFSL and Australian Credit Licence no. 244616 (BOQ). Lending criteria, terms and conditions and fees apply. Acceptance of any application for credit is always at BOQ’s lending discretion. The childcare lending settings referenced are not exhaustive, may change at any time without notice, and should not be relied upon or represented as BOQ’s current lending policy. This content is intended for broker use only.
