Reverse mortgages continue to grow in popularity with Australian seniors, according to a new report.
The Deloitte report, commissioned by SEQUAL, shows that as of 31 December 2010 the Australian reverse mortgage market was comprised of more than 41,000 loans with total outstanding funding of $3bn. The total represents 11% growth in the market from 31 December 2009, and the average loan size has also increased to $72,500, up from $51,148 in 2005.
Deloitte partner James Hickey said the reverse mortgage market has recovered from its lows during the GFC, though it has yet to return to its pre-GFC peak.
“Nevertheless, there remains gradual recovery in growth which is encouraging,” Hickey said.
SEQUALCEO Kevin Conlon said reverse mortgages may continue to grow in popularity as a new generation moves toward retirement.
“It appears that attitudes towards retirement funding are changing. As Baby Boomers approach retirement, equity release strategies are increasingly seen as a useful option to access the wealth stored in their home in order to meet the challenge of living longer and living well,” he said.
Conlon emphasised that SEQUAL’s industry accreditation protocol that raises professional standards above the minimum education requirements imposed by legislation and industry association membership. SEQUAL has established a national network of accredited Consultants (SERC) which assist consumers make informed decisions about equity release strategies.
“It is important that consumers make informed decisions and carefully consider how their needs may change over time,” he added.
He welcomed the encouragement provided by both industry sector associations and market regulators for the meaningful contribution SEQUAL has made towards the establishment of an efficient and ethical seniors equity release market in Australia.