Reverse mortgage applications have essentially tripled in volume over the past year alone, according to Equitable Group CEO Andrew Moor.
“We’ve only been in this market for 18 months, but applications are jumping,” Moor told Bloomberg in an interview. “Canadians are getting older and there is an opportunity there.”
As of June, the national outstanding balance on this loan type has ballooned by more than double in less than four years to $3.12 billion, according to data from the Canadian banking regulator.
The pace of growth compared to other products has been nothing short of inflamed, with reverse mortgages increasing by 22% annually in June, compared to 4.8% for the overall market.
Equitable previously predicted that the reverse mortgage segment will grow by roughly 25% a year. The bank is a relatively fresh addition to the market, with $10.1 million in reverse mortgages at present.
The only other major bank that offers the loan type is HomeEquity Bank, with $3.11 billion in reverse mortgages.
Last month, the Canada Mortgage and Housing Corporation said that the nation’s seniors are becoming even more active in in the housing market.
This was especially apparent in Toronto, where the proportion of the senior population (those aged 65 and over) owning homes has increased by 4.5% between 2006 and 2016, ending up at 25%.
CMHC cited increased labour force participation as the major factor in greater ownership among seniors.
“In 2016, employment became the primary source of income (including self-employed) for close to one-third of homeowner households, compared to 20% among renters. With more seniors working, fewer have been reliant on income from government sources compared to a decade ago,” the report stated.
“Among homeowners, there has been a strong increase in the share of retirees for whom pensions (public and private) were their primary source of income. These trends have translated into faster income growth for seniors.”