We must be near peak cycle, from Banking Day:
Industry superannuation fund-owned bank ME is working with one of its super fund partners to develop a shared equity mortgage and is working towards launching it early next year.
ME is also working on a product “in the reverse mortgage space”.
ME chief executive Jamie McPhee said the big challenge for home buyers was affordability and ME could see opportunities to work with its super fund partners on solutions.
McPhee said: “We are in discussions with a fund on a shared appreciation mortgage. We would do the banking and the fund would provide the equity.”
Shared equity mortgages started to appear in Australian about a decade ago but the emerging market was wiped out by the financial crisis.
In a typical shared equity mortgage arrangement, the homebuyer would borrow against 60 per cent of the equity and an investor would hold the balance. This lowers the entry cost for a first-home buyer. When the house is sold the proceeds are split according to the equity share.
The chart:
