Australia's reverse mortgage market is now valued at $2.6b after recording a growth rate of 5% in the six months to 30 June 2009, a new study by Deloitte Actuaries and Consultants has revealed.
The Deloitte SEQUAL Reverse Mortgage Study showed that the market consisted of more than 38,000 reverse mortgage facilities at the end of six-month period.
According to James Hickey, the Deloitte Actuaries and Consultants partner who led the study, there were 2,350 new borrowers of reverse mortgages in the first half of 2009 compared with 2,600 in the second half of 2008. He continued, "This shows that the product is still in demand by borrowers, albeit at a slower rate than in the previous six months."
Kevin Conlon, chief executive SEQUAL hailed the results of the Deloitte study "as testament to the fact that seniors equity release continues to emerge as a key retirement funding option". He added, "The sustained, albeit slower market growth over the last six months, demonstrates to us the important role equity release continues to play in assisting Australian seniors to face the challenge of funding their retirement."
The report revealed that most reverse mortgage business came from New South Wales (33%), with Queensland (16%), and Victoria (14%). NSW increased its share of new lending by almost 10% since 2008.