Reverse mortgage markets in some international territories are poised to hit it big over the next decade, according to recent data and research presented by Australia’s Heartland Group and Canada’s HomeEquity Bank.
According to Heartland Group, the market for reverse mortgages in Australia and around the world could grow by as much as three times over the next decade based on internal data and metrics shared at an event called the 2020 Global Equity Release Roundtable, which recently shared survey results from participating countries about the prevalence of home equity release in other developed nations.
While recent indications in Australia have shown the reverse mortgage market falling, data suggests that as much as 90% of Australian retirees have a desire to age in place, but don’t have the necessary funds to be able to do so. As in the United States, however, most Australians who wish to remain at home simply don’t know or understand enough about reverse mortgage product options, according to Heartland Reverse Mortgages Head of Operations Sharon Yardley.
“Heartland is experiencing a strong increase in demand from people wanting to stay in their home and live a more comfortable retirement,” Yardley told Savings.com.au. “Despite this, many people over the age of 60 don’t realize that a reverse mortgage could help them fund the retirement they desire and deserve. This research demonstrates that demand for equity release options will continue to rise, and it’s our role as the market leading provider to help educate consumers about how a reverse mortgage could be an option for them, particularly as the cost of living continues to increase.”
A potential barrier to greater reverse mortgage proliferation across Australia is the level at which interest rates currently sit, but a senior advocacy organization within the country recently called upon the Australian government to lower reverse mortgage interest rates, according to the Australian Savings outlet.
Additionally, reverse mortgages in Canada show no signs of letting up, as the nation’s leading reverse mortgage lender HomeEquity Bank saw 14% growth in reverse mortgage originations in the fourth quarter of 2020, according to Canada’s Global News outlet.
The only other major reverse mortgage provider in Canada, Equitable Bank, saw its own reverse mortgage balance double between November 2019 and November 2020, based on data from the Canadian Office of the Superintendent of Financial Institutions, the outlet explained.
One of the drivers of reverse mortgage business in Canada comes from seniors in the country wanting to assist younger relatives in entering the housing market, according to area financial planner Alexandra Macqueen.
“Grandma and grandpa are presumably going to leave an estate in the form of the house. Well, why not give out some of that estate and have it do some good today?,” Macqueen told Global News.
Read the story about the Australian reverse mortgage market at Savings.com.au, and about the growth in the Canadian market at GlobalNews.ca.