Now rent rises create family child care crisis

Sydney’s rental crisis is now hitting child care centres, with industry experts warning parents they should brace for higher fees or a hunt for alternate arrangements.

Sydney’s rental crisis is now hitting child care centres, with industry experts warning parents they should brace for higher fees or a hunt for alternate arrangements.

It comes as families with young children in the Greenwood Early Education Centre at Waterloo were shocked to receive an email this week, informing them the centre will close its doors next month.

Australian Childcare Alliance NSW chief executive officer Chiang Lim said rent disputes were a problem that had been brewing for “three to five years” as more child care operators leased rather than owned their buildings.

“It is an emerging problem, especially for those who may have, during Covid and low interest rates, agreed to a certain lease arrangement, “ he said.

Those leases were now seeing substantial increases.

Rena Oura and husband David Parks with son Hugo outside the Greenwood child care centre in Waterloo, which has announced it is shutting down. Picture: Sam Ruttyn

“Some of the larger operators pay eye-watering leases … (if) demand drops they’ll just close the centres,” Mr Lim said.

“We need a better planning system in place that can allow centres to ride the wave of demand.”

Centres passing on the rising lease costs to parents have also been blamed for Sydney having some of the highest child care costs in the nation.

The Waterloo centre is a case in point.

It told parents the decision to close was made after lease negotiations with the landlord failed to reach “a suitable agreement”.

“Our lease is approaching expiry and despite our very best efforts we have been unable to reach a suitable agreement with the landlord that would enable us to continue to operate the service,” the email to parents read.

Hugo has been attending the centre for two years, but his parents will now need to find a new place for him. Picture: Sam Ruttyn

“Therefore, is it with sadness we inform you our early learning centre will close its doors.”

The Waterloo centre is one of 11 operated by Greenwood in NSW, which has another seven located in Victoria.

The child care chain informed parents that it would assist them in relocating to another centre, such as one it operated in Bronte, or the one it has at Maroubra.

Chartered accountant Rena Oura said she and her husband David, a civil engineer, had relied on the centre to care for their almost three-year-old son Hugo as they worked full-time.

She said there had been no indication the centre as to close, beyond a manager recently taking extended leave.

Increased in residential rents in the area are also forcing families to leave the area, leaving childcare vulnerable to not filling all their places and becoming unviable. Picture: Sam Ruttyn

“Hugo has been going to the centre for two years,” she said.

“The rents have doubled around here and people are moving out. We were told the rent at our centre was also going up.”

However, it is not just the rising cost of leases – child care centres are also under strain from families moving out of an area due to their own rents ­rising.

And, unlike public schools that can sustain fluctuations in student numbers, child care centres struggle to keep operating once numbers drop — a problem that needed resolving for the families left behind, Mr Lim said, adding centres cannot be left at the mercy of the commercial lease market.

According to the Department of Education’s Child Care Subsidy data report, the average childcare fee in Sydney for centre-based childcare is between $150-$200 per day.

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Originally published as Now rent rises create family child care crisis