Australia’s reverse mortgage market reaches $2.7bn at 31 December 2009DOWNLOAD
Deloitte Actuaries and Consultants released its eighth comprehensive study of the Australian reverse mortgage sector today. Commissioned by the Senior Australians Equity Release Association (SEQUAL), the study found that the reverse mortgage market in Australia as at 31 December 2009 consisted of more than 39,000 reverse mortgage facilities with total outstanding funding of $2.7 billion. This represents almost 4% growth over the six months from 30 June 2009 and 9% growth over the 12 months from 31 December 2008.
James Hickey, Deloitte Actuaries and Consultants partner who led the study said that there were more than 2,665 new reverse mortgages written in the second half of 2009. “This was up on the same period in 2008,” he said. “Also when you track the growth in the size of each loan from $51,148 in December 2005 when we initiated this study on behalf of SEQUAL, to the current $70,000 as at 31 Dec 2009, there appears to be a continued appetite for this equity release product.”
Hickey noted that the settlement figures for the second half of 2009 of $141m were level with the same period in 2008. “It is interesting to see that, following the dip in the settlement figures in the first half of 2009 to $122m, settlements have begun to move back up to be on par with the 2008 numbers. This gradual recovery in growth appears to reflect the cautious optimism of the economy in general,” he said.
A summary of key information is shown below:
|Outstanding market size||$0.85b||$1.51b||$2.02b||$2.48||$2.71b|
|Number of loans||16.584||27.898||33.741||37.530||38,788|
|Average loan size||$51,148||$54,233||$60,000||$66,150||$69,896|
12 month figures (with the addition of new data from various providers)
Kevin Conlon, Chief Executive of SEQUAL, the peak industry body which governs equity release providers and provides consumer safeguards, pointed out, “attitudes towards retirement funding are changing as the largest generation within the Australian population, the so-called Baby Boomers, approach the end of their working lives. The home is increasingly being considered a part of the planning process with equity release been seen as a means to unlock the substantial wealth stored in property in order to live well.”
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