2023 Australasian Actuarial Education and Research Symposium

Lingfeng Lyu

Risk and Actuarial, Business School, UNSW; ARC Centre of Excellence in Population Ageing Research (CEPAR)

Postcode-Level reverse mortgages: longevity risks, house price risks, and welfare gain

This is joint work with Michael Sherris, Jonathan Ziveyi, Yang Shen

This research evaluates the Home Equity Access Scheme (HEAS) versus downsizing for older Australians, factoring in elements such as means tests, health expenditures, taxes, and home maintenance. It builds on a utility approach, considering region-specific house price and longevity risks. Findings reveal that HEAS enhances healthy aging for healthy and mildly disabled retirees more than downsizing. This scheme benefits cash-poor but asset-rich retirees who have lower bequest motives, derive higher satisfaction from spacious homes, and prioritise long-term gratification. However, spatial disparities in housing prices and life expectancy decrease the uptake of HEAS, offering new perspectives on housing decisions among seniors in Australia.