The reverse mortgage conundrum: Perspectives of older households in Australia

Whait, Rob; Lowies, Braam; Rossini, Peter; McGreal, Stanley; Dimovski, Bill

doi:10.1016/j.habitatint.2019.102073

Cited by 16 publications

(13 citation statements)

References 19 publications

(14 reference statements)

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“…less than 10% before the concept clarification during the questionnaire research. Contrary to the perceived financial consumers' benevolence towards the RM adoption in the Netherlands, according to 31 interview of people aged over 65 years, RMs are quite unpopular in Australia, mainly because of the desire to avoid debt and to retain a home for security and precautionary reasons (Whait et al, 2019).…”

Section: Factors Influencing the Rm Introduction And Acceptancementioning

confidence: 92%

“…With regards to the argument about the far-reaching favorable impact of the RM, calculations for the e.g. UK predict that every 1 GBP of wealth released through RM generates 2,34 GBP for the wider economy via multiplier effects (Whait et al, 2019). At last, improving the social welfare of senior citizens by RM loans approval should dampen public costs in the social security area, and consequently stimulate personal consumption expenditures throughout enhanced perception of the sustainability of social security systems (Kobayashi et al, 2017, p. 100).…”

Section: A General Insight Into the Rm Productmentioning

confidence: 99%

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Anticipating a Reverse Mortgage Adoption in Croatia

Ana

Martina²

2020

Studies in Business and Economics

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Reverse mortgage is an alternative source of financing of elderly population that usually has some homeownership, but insufficient income and savings to support desired or indispensable level of consumption. It is a financial innovation mostly provided by banks and finance companies to seniors, which enables a home equity conversion to liquidity without selling or leaving a property. In circumstances of ageing society, modest pension income, increasing long-care expenditures, limited access to loan market and high risk of poverty, a reverse mortgage product has a solid ground for implementation and adoption. Croatia is an ageing country with negative demographic trends, which accelerated in the last few years. Retired population which is “home rich and cash poor” is particularly vulnerable and at strike to sustain a decent life. Therefore, we raised a question concerning the justification of the reverse mortgage introduction in Croatia. After giving an insight into some contextual factors, an estimation of the potential demand for reverse mortgage service in Croatia was made by carrying out an exploratory – pilot study with around 120 questionnaire respondents. We found out that there is a poor knowledge about the reverse mortgage among Croatian financial consumers (i.e. only 24% of respondents are familiar with the reverse mortgage term), as well as the lack of demand for this home equity extraction instrument. Namely, almost 67% of respondents would not accept a reverse mortgage instrument regardless of the circumstances, primarily due to socio-cultural reasons.

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Section: Factors Influencing the Rm Introduction And Acceptancementioning

confidence: 92%

Section: A General Insight Into the Rm Productmentioning

confidence: 99%

Anticipating a Reverse Mortgage Adoption in Croatia

Ana

Martina²

2020

Studies in Business and Economics

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“…Australian home owners have so far proved reluctant to reduce their share of home equity through such products (Whait, Lowies et al 2019), but for people who are not home owners, the prospect of becoming so through shared equity arrangements may be more appealing. Products in this regard may include fractional property ownership (Lowies, Whait et al 2018) and property crowdfunding (Lowies, Viljoen et al 2017).…”

Section: Alternative Housing Models For Older Lower Income Householdsmentioning

confidence: 99%

Alternative housing models for precariously housed older Australians

Tually¹,

Coram²,

Faulkner³

et al. 2022

AHURI Final Report

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Related reports and documentsInquiry into housing policies and practices for precariously housed older Australians https://www.ahuri.edu.au/research-in-progress/inquiry-intohousing-policies-and-practices-for-precariously-housedolder-australians AHURI AHURI is a national independent research network with an expert not-for-profit research management company, AHURI Limited, at its centre. AHURI's mission is to deliver high quality research that influences policy development and practice change to improve the housing and urban environments of all Australians.Using high quality, independent evidence and through active, managed engagement, AHURI works to inform the policies and practices of governments and the housing and urban development industries, and stimulate debate in the broader Australian community. AHURI undertakes evidence-based policy development on a range of priority policy topics that are of interest to our audience groups, including housing and labour markets, urban growth and renewal, planning and infrastructure development, housing supply and affordability, homelessness, economic productivity, and social cohesion and wellbeing. AHURI journalAHURI Final Report journal series is a refereed series presenting the results of original research to a diverse readership of policy-makers, researchers and practitioners. Peer review statementAn objective assessment of reports published in the AHURI journal series by carefully selected experts in the field ensures that material published is of the highest quality. The AHURI journal series employs a double-blind peer review of the full report, where anonymity is strictly observed between authors and referees.

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“…The peculiarities of the United States, Australia and Japan, to name three non-European markets where this product has been implemented, can be found in Huan and Mahoney (2002), Chatterjee (2016), and Davidoff et al (2017); Ong (2008) and Whait et al (2019); and Mitchell and Piggott (2004), respectively.…”

Section: Introductionmentioning

confidence: 99%

“…In Italy, Fornero et al (2016) focused on the determinants of interest in RM and found that the main predictors of higher interest in RM are risk aversion and negative expectations about living standards after retirement. Likewise, in Australia, Whait et al (2019) highlighted the extraordinary negative vision that people have about RMs, which is reinforced by high interest rates and expenses. Instead, the bequest motive is not a definitive argument against RM.…”

Section: Introductionmentioning

confidence: 99%

Reverse Mortgage and Financial Sustainability

Val

Bielsa

Varea

2022

Technological and Economic Development of Economy

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This paper analyzes the effects that contracting a reverse mortgage has on the finances of families of a country or group whose members who aged 65 or older are the sole owners of the 100% of the property, regardless of the receipt of a retirement pension. For this purpose, an economic-financial model based on the life cycle model is defined, which considers a double source of randomness: mortality and dependence of family members. Long-term effects are measured using probabilistic, temporal and monetary indicators. For each country, the model must be adapted according to the legal framework for retirement and long-term care benefits and for the actuarial mortality and long-term care tables. As an illustration, this model was applied on Spanish families using data from the Spanish Survey of Household Finances 2017. The results obtained indicate that a family in Spain that meets the conditions for contracting a reverse mortgage sees, on average, an increase in its initial income and a decrease in both its probability of having liquidity problems in the future and the value of this lack of liquidity. It is also concluded that family composition influences the magnitude of these positive effects.

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The reverse mortgage conundrum: Perspectives of older households in Australia

Cited by 16 publications

References 19 publications

Anticipating a Reverse Mortgage Adoption in Croatia

Anticipating a Reverse Mortgage Adoption in Croatia

Alternative housing models for precariously housed older Australians

Reverse Mortgage and Financial Sustainability

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