Australia’s Reverse Mortgage Market, also known as a lifetime mortgage, was nearly 2.5 billion dollars at the end of 2008, a 23% growth from 2007, according to a report from Deloitte. The report is especially interesting because it includes statistics on the type of borrowers taking out lifetime mortgages, which appear very similar to the US reverse mortgage program.
-The average age of a borrower in a lifetime mortgage is 74. However, the average appeared to be trending younger as the number of new loans being taken by those under 70 was 37% vs. 30% of the outstanding loans. It is unsurprising that the state of the economy would drive younger borrowers to be more likely to take out a lifetime mortgage.
-While the number of lifetime mortgages being taken out seems to be fairly uniform across the states (with the exception of Tasmania and the territories), Queensland and New South Wales have the highest share of the lifetime mortgage market, with an average of 22.5% of all new loans. This is especially interesting because in the United States, the prevalence of reverse mortgages appears to vary widely based on region and state.
– However, many of the lifetime mortgages are clustered around capital cities. For example, about 85% of the loan settlements in 2008 in Victoria and Western Australia took place in the capital cities. One wonders if this discrepency is a question of demand or of supply.
G’day mate!