Powered by MOMENTUM MEDIA
subscribe to our newsletter sign up

 

We need a decent equity release market: COTA

Equity

In order to unlock the vast equity held in property by Australia’s pre-retirees, the country’s equity release market needs to improve, a social services organisation has said.

The Council of the Ageing’s (COTA) chief executive, Ian Yates, argued this week that Australia’s equity release market will need to shift up a gear to meet the demands of future Australia.

Speaking at the ASIC 2018 Annual Forum in Sydney, he said, “[The] thing that I think we need going into the future of Australia is a much more agile and creative and efficient equity release market.

“We have so much wealth tied up in the house that as people get older they would actually like to be able to tap into. The Productivity Commission recommended that a few years ago [but] the government didn't do anything about it.”

Continuing, Mr Yates said Australia is without a “decent” equity release market and in fact has a number of disincentives for those considering the move.

Downsizing

Retirement psychology expert Dr Joanne Earl from Macquarie University added that, by and large, most people don’t regret the decision to downsize.

She said most people chose to move to a smaller property to lessen the workload associated with large gardens.

However, Dr Earl warned that those who did regret the decision often felt the pain of leaving behind an established network.

“The main source of regret for people was leaving behind established networks, and not just family and friends like you might think, but the butcher, the baker, the candlestick maker, all the people that provided them with services they already trusted, that knew their car, knew their house, knew their power grid,” she said.

“All of these things were people that they valued that they didn’t realise they had connections with.”

Dr Earl said one of the most upsetting testimonials came from someone who had downsized, hoping to address psychological and emotional issues tied up with their home.

However, this downsizer told the researcher, “I was sad and lonely before, I’m sad and lonely now.”

Bearing this in mind, Dr Earl said it’s important prospective downsizers don’t consider the move a silver bullet for larger emotional issues.

We need a decent equity release market: COTA
Equity
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
Dan Hadley JLB - Hi MMS. You raise a great point. There is significant opportunity here at all levels. As with all opportunities in the market, some will pick the.......
Anonymous - Unfortunately Labor's proposal to abolish Negative Gearing will impact not only on Real Estate purchases but also on Margin loan investors, especially.......
Gene S - This is a great article and a wakeup call. I would like to see this article expanded to another version to add some additional information so some.......
MMS - It is quite amazing to watch this transition taking shape right in front of us however most funds have no investment strategies to capture this up.......