Reverse mortgages have hit $3.3bn in funding, growing 10% over the last year.
Deloitte has released its 10th comprehensive study of the sector, and has found that reverse mortgages grew by 5,000 loans in 2011. The company said the market for reverse mortgages has seen growth of 22.5% over the last 24 months.
Direct sales still outdid brokers and planners, however. The survey found that 74% of reverse mortgages were via direct sales from lenders, with brokers and planners representing 26% of sales.
Sales have also failed to recover to pre-GFC highs, but industry body SEQUAL has predicted the products will continue to surge driven by an ageing population.
"I believe releasing home equity to fund retirement will continue to grow as the Australian population ages. Given our ageing demographic the Government’s emphasis on ageing couples remaining at home for as long as possible is likely to support this," SEQUAL chairman John Thomas said.
Deloitte banking partner James Hickey agreed that the industry could continue to see growth.
"Although the appetite for this equity release product continues to grow, settlements have not yet returned to the levels experienced in the peak years of 2006 and 2007, prior to the Global Financial Crises. Even so growth remains steady and a number of significant lenders remain active in the market," Hickey said.
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