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Strong growth is forecast for Australia’s reverse mortgage industry over the next five years, aided by an ageing population and greater life expectancy.
According to global business research provider IBISWorld, the nation’s reverse mortgage providers industry – currently worth $252.2 million in revenue – is expected to increase at an annualised 5.4 per cent between 2016 and 2021 to $328.0 million as more homeowners look to unlock equity in their home as a lump sum, income stream or line of credit.
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“As Australia’s baby boomer generation enters retirement and seeks new ways to fund enriched lifestyle choices – including travel and relaxation – demand for reverse mortgages is expected to grow,” IBISWorld said.
“Rising house prices (which allow for a greater amount to be borrowed) and an increasing cash rate (which drives up the interest revenue generated on reverse mortgages) are expect to support growth in reverse mortgages.”
[Related: Loan arrears hit 10-year low]
