Data from ING DIRECT reveals that Australians are increasingly taking property debt into their retirement years, with the number of over 65 year olds still holding a mortgage rising by 28 per cent in the past three years. This finding aligns with data from our own surveys, as shown in this data extract from DFA analysis of owner occupied loans held by those over 50.
Of those in their retirement years that still have a mortgage, 26 per cent hold an investor loan while 74 per cent are owner occupiers. The average debt they are holding is $158,000.
Mark Woolnough, Head of Third Party Distribution at ING DIRECT commented: “As property prices climb and people wait longer to get onto the property ladder, it’s not a surprise that people are holding their home loan debt later in life. However, proper planning is critical to make sure that this debt doesn’t cause stress in later years and people can enjoy the retirement they have worked hard for.”
According to ING DIRECT’s Autumn Buyers Guide, since June 2012 the average capital city residential property has increased in value by 32 per cent, with growth of 7.6 per cent in the past 12 months alone. The average age of a home buyer has also risen in recent years to 38.
Mr Woolnough added: “We talk about superannuation and property as the barbells of a person’s financial lifecycle – in most cases they are the two biggest investments that a person will ever make.
“Research has shown us that people are very open to discussing broader financial needs when they are sourcing a mortgage, such as their superannuation, and brokers are in a great position to encourage and support their clients to consider and sort their super in light of this growing property debt trend.”
The analysis is based on ING DIRECT’s own customer base. ‘Retirement years’ considers those customers aged between 65 and 79.
