Road for reverse mortgage programme in Hong Kong : a study of consumer's perception

Abstract

Reverse Mortgage Programme (“RMP”) was launched in Hong Kong on 11th July 2011. It aims to help the elderly to improve the living standard. Since the aging population is getting serious and the lack of comprehensive retirement protection scheme in Hong Kong, a big potential market for reverse mortgage is given which is anticipated that the eligible elderly should eagerly participate to the programme.

However, the statistic from the Hong Kong Mortgage Corporation (“HKMC”) showing that the participation rate of RMP is surprisingly low. Up to 31st May 2014, only 624numbers of applications were recorded. In order to boost the participation rate, this dissertation has conducted a study to identify the reason(s) of low participation rate and explore the possible way(s)to enhance the RMP.

In order to achieve the aim of the study, a questionnaire survey was conducted to investigate the consumer’s perception to RMP. It divided consumer’s perception into consumer’s awareness and consumer’s motivation. High awareness but low understanding to RMP was found according to the results of survey. Meanwhile, low consumer’s motivation to RMP was found and the complicated programme content and legacy concern are the major factors influencing the consumer’s motivation.

Nevertheless, there still a long way to go for the RMP in Hong Kong. To enhance the performance of RMP, it is recommended to promote it by different means of media and focus it to the elderly without children. Further studies would be needed to assess the effectiveness of the approaches in the recommendation.