Coming soon! Equity Release
DomaCom is currently working towards an equity release product as part of the DomaCom Fund offering for Senior Australians.
DomaCom believes a fractional equity release product will be a viable alternative to the existing reverse mortgage model for Senior Australians because it will be based on an equity model rather than debt (which is the basis for the reverse mortgage model). Debt models are reliant on the availability of short term global cash to maintain funding, which is at odds with the longer term need of Seniors requiring equity release to fund retirement and aged care needs over the longer term.
The fractional model will also facilitate the incremental transfer of property wealth from one generation to another. Ultimately, Seniors will have the benefit of maintaining a reasonable standard of living and not being forced financially to sell and move coupled with a permanent right of residency in their home.
Funding sources for Senior Australians to meet Aged Care Needs
|Downsize||Reverse Mortgage||Equity Release|
|Significant transaction costs|| Not well funded
|| Well funded
|Lifestyle impact of relocating|| Minimal lifestyle impact
|| Minimal lifestyle impact
|Uncertainty about residual equity|| Progressive sale of equity:
DomaCom’s Equity Release – an elegant solution where the time horizons of both the Investors and the Seniors are more closely aligned.
*Sources: APRA Statistics. Deloitte, Dynamics of the Australian Superannuation System: The next 20 years 2013-2033