A widening gap between superannuation and the real cost of retirement is pushing more Australian homeowners toward reverse mortgages, with coastal New South Wales emerging as the state's clearest hotspot for uptake, according to new data from Seniors First.
Seniors First CEO Darren Moffatt (pictured) said the trend reflects growing numbers of retirees whose savings fall short of what retirement actually costs.
"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," Moffatt said.
Compounding the pressure, Moffatt said softer house prices following federal tax changes are also playing a role, with more homeowners choosing to delay selling and access equity instead.
Recent Deloitte figures show more than 40,000 Australians now hold a reverse mortgage, with over 8,000 taken out in the past year alone. More than 5.5 million Australian homeowners are aged over 55, with almost 2.5 million expected to retire within the next decade. The report also found 34% of new reverse mortgages are now written to borrowers under 70, as cost-of-living pressure pushes younger retirees toward equity release earlier than in the past.
The figures show Wamberal (2259) and The Entrance (2261) on the Central Coast, along with Byron Shire (2486) and Jervis Bay (2540) on the South Coast, recording the highest rates of reverse mortgages in NSW. Northbridge (2068), on Sydney's Upper North Shore, rounds out the top five.
Moffatt said the pattern reflects where Australians want to retire.
"These are the places many Australians dream of retiring to, the Central Coast, Byron Shire, the South Coast, so it makes sense homeowners there are finding ways to stay and make the most of it, rather than cashing out and moving on," he said.
Gateway Bank CEO Lexi Airey said the bank is seeing the same trend among its own customers.
"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.
Moffatt said the No Negative Equity Guarantee remains the key protection for borrowers, ensuring they can never owe more than their home is worth. Seniors First, which says it originates one in five reverse mortgages written in Australia, has launched SERAH, an online portal connecting over-55s with educational content and expert brokers.
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