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New figures from reverse mortgage broker Seniors First found Wamberal (2259) and The Entrance (2261) on the Central Coast and Byron Shire (2486) and Jervis Bay (2540) on the South Coast ranked among the state’s five leading postcodes for reverse mortgages, alongside Northbridge (2068) on Sydney’s North Shore.
The figures come as Deloitte estimates more than 40,000 Australians hold a reverse mortgage, with more than 8,000 taken out in the past year.
Further data from Seniors First found that demand for reverse mortgages through the Commonwealth’s Home Equity Access Scheme increased 21 per cent over the past year, while online searches related to reverse mortgages climbed 62 per cent over a six-month period.
More than 5.5 million Australian home owners are aged over 55, with almost 2.5 million expected to retire within the next decade.
Seniors First CEO Darren Moffatt said that given the demographics, it was no surprise coastal retirement destinations featured so prominently.
“These are the places many Australians dream of retiring to, the Central Coast, Byron Shire, the South Coast, so it makes sense home owners there are finding ways to stay and make the most of it, rather than cashing out and moving on,” Moffatt said.
Lenders are also noticing the demand for reverse mortgages across the regions, with Homesafe expanding into regional Victoria last week (16 July).
Non-bank lender Brighten has also fast-tracked the national rollout of its new Brighten Life and Brighten Life Plus reverse mortgage products following the completion of a successful broker pilot.
Moffatt said the gap between superannuation and the cost of retirement was widening.
“We are seeing people who have worked hard, paid off their home and built significant equity who now find superannuation alone doesn’t match the reality of retirement,” he said.
“For many Australians, their home is their biggest financial asset. Rather than selling and downsizing or leaving the communities they know, many are choosing a reverse mortgage so they can stay in their home with greater financial confidence.”
Moffatt said that reverse mortgages were also increasingly becoming an option due to softening house prices since the federal government’s tax changes, with people more likely to delay selling.
Gateway Bank CEO Lexi Airey said the bank was also seeing more Australians choosing reverse mortgages.
“We’re hearing this again and again. They would rather stay in the home and the community they love than sell up and start over somewhere new,” Airey said.
“For a lot of Australians, it’s about accessing the money they need and not giving up the home and lifestyle they’ve built.
“They want options and the confidence to make the right call for their own retirement. A reverse mortgage is giving them a way to hold onto that.”
[Related: Household Capital to acquire Macquarie reverse mortgage portfolio]
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