Investigating Relationship between Demand and Awareness of Reverse Mortgage: An Empirical Analysis from India

SARITA GUPTA, SANJAY KUMAR

Abstract


Irrespective of huge potent due to demographic passage Reverse mortgage (RM) has not captured a remarkable market size in India. Current study makes an attempt to probe why Indian reverse mortgage market has not shown significant development.  Prior studies convey high cost, product complexity, Bequest, dull features and low awareness as to be reasons hindering RM market. Current research efforts to examine relationship and association between demand of RM and its awareness. Spearman’s rho and Chi- square test is employed on a data of 410 elder Indian homeowners. Result indicates level of awareness of RM among respondents is quite low. Finding of the study exhibits there is no significant relation and association between demand of reverse mortgage and awareness of reverse mortgage. Homeowners who are aware about the product have not shown interests in RM while those are Unaware are willing to tap housing wealth in later life.  Thus, result indicates possessing awareness of RM is not a determining factor of willingness/demand. Low awareness is not a valid reason of slow market growth in India. Study suggests apart from enhancing awareness among prospective buyers, policy makers should emphasis other components also to make RM more feasible. For widening the size of market, promotion of awareness of RM should be done for actual segment of elderly who are less educated and lacking financial well being. RM should be redesigned and communicated properly by lenders too, to make it more attractive so elderly may show interest to unlock housing wealth.   By Implementing RM Properly, It may used as a poverty eradication tool in coming decades for Aging India.


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