Global equity release market set to triple by 2031
International research published by EY predicts that the global equity release market could more than triple over the next decade. The Global Equity Release Roundtable 2020 survey report analyses information from market leaders across 13 different countries (including Heartland Reverse Mortgages in Australia and New Zealand).
According to the data, the growth potential of this market is huge. Over $15bn of equity is currently released per year globally, and by 2031 this is expected to surpass $50bn annually. That’s not to say providers won’t face challenges – one of the biggest potential barriers to growth is a lack of customer awareness.
“The survey report confirms that equity release providers across the globe are facing similar challenges and opportunities,” says Steve Kyle, Secretary General of the European Pensions Asset Release Group (EPPARG).
“As a global industry, we must now foster awareness of the considerable social and economic benefits that home equity release products can bring, particularly in the light of the global economic downturn triggered by the pandemic.”
According to the research, the most common type of equity release globally is the reverse mortgage (also known as a lifetime mortgage). A reverse mortgage allows people over 60 to access some of the equity in their home, helping them fund a more comfortable retirement without needing to leave or sell their home.
Heartland is Australasia’s leading provider of reverse mortgages, offering services through Heartland Bank in New Zealand and Heartland Reverse Mortgages in Australia. Heartland Reverse Mortgages recently engaged with the Royal Melbourne Institute of Technology (RMIT) to support research on financing ‘ageing in place’ rather than moving into specialised care, or even moving at all.
The findings showed that nearly 90% of Australian retirees want to remain in their home as long as possible, but don’t have the funds to do so. Limited superannuation and the rising cost of living is restricting the ability to fund ageing in place and provide for necessary home renovations and a comfortable retirement.
“Heartland is experiencing a strong increase in demand from people wanting to stay in their home and live a more comfortable retirement. Despite this, many people over the age of 60 don’t realise that a reverse mortgage could help them fund the retirement they desire and deserve,” explains Heartland’s Head of NZ Reverse Mortgages, Andrew Ford.
“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.”
See the full report for more: http://epparg.org/news/global-equity-release-market-forecast-to-more-than-treble-by-2031/
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