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Housing Equity Withdrawal in Mid-To-Late Life: Patterns and Motivations Amongst Australian Home Owners

Author

Listed:
  • Rachel Ong

    (Bankwest Curtin Economics Centre, Curtin University)

  • Gavin Wood

    (Centre for Urban Research, RMIT University)

  • Siobhan Austen

    (School of Economics and Finance, Curtin University)

  • Therese Jefferson

    (Graduate School of Business, Curtin University)

  • Marietta E.A. Haffner

    (Faculty of Architecture and the Built Environment, Delft University of Technology)

Abstract

Resource that can perform a pension role in retirement. This paper assesses the extent to which Australians aged over 45 utilise housing equity withdrawal (HEW) through the three methods of in situ mortgage equity withdrawal, downsizing and selling up. We find that the incidence of HEW has increased over the last decade despite a global financial crisis. Mortgage equity withdrawal is the dominant form of equity release among those under pension age, while downsizing or selling up is relatively more frequent among those above pension age. Different motivations are associated with the decision to invoke alternative styles of equity withdrawal. Mortgage equity withdrawal is linked with financial and employment factors while downsizing and selling up seems to be prompted by adverse life events. Selling up to access equity is typically an option of last resort. Our findings offer insights into important debates around home ownership societies and the welfare role performed by owner-occupied housing in mid-to-late life.

Suggested Citation

  • Rachel Ong & Gavin Wood & Siobhan Austen & Therese Jefferson & Marietta E.A. Haffner, 2014. "Housing Equity Withdrawal in Mid-To-Late Life: Patterns and Motivations Amongst Australian Home Owners," Bankwest Curtin Economics Centre Working Paper series WP1406, Bankwest Curtin Economics Centre (BCEC), Curtin Business School.
    • Handle: RePEc:ozl:bcecwp:wp1406
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    References listed on IDEAS

    as
    1. Maria Chiuri & Tullio Jappelli, 2010. "Do the elderly reduce housing equity? An international comparison," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(2), pages 643-663, March.
    2. Productivity Commission, 2004. "First Home Ownership," Others 0410007, University Library of Munich, Germany.
    3. Sharon Parkinson & Beverley Searle & Susan Smith & Alice Stoakes & Gavin Wood, 2009. "Mortgage Equity Withdrawal in Australia and Britain: Towards a Wealth-fare State?," European Journal of Housing Policy, Taylor and Francis Journals, vol. 9(4), pages 365-389.
    4. Rachel Ong & Sharon Parkinson & Beverley A. Searle & Susan J. Smith & Gavin A. Wood, 2013. "Channels from Housing Wealth to Consumption," Housing Studies, Taylor & Francis Journals, vol. 28(7), pages 1012-1036, October.
    5. Mr. Vladimir Klyuev & Mr. Paul S. Mills, 2006. "Is Housing Wealth An 'ATM'? the Relationship Between Household Wealth, Home Equity withdrawal, and Saving Rates," IMF Working Papers 2006/162, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    housing equity withdrawal; mortgage equity withdrawal; downsizing; selling up; mid-to-late life;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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