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Income Composition and Asset Holdings of Older Households in Korea: Challenges and Policy Implications
Publication date May. 13, 2025
Summary
The average income of older households in Korea has increased over the past decade. However, many of these households continue to participate in the labor market even at advanced ages, suggesting that a stable post-retirement income stream has yet to be secured. As observed in many other countries, this challenge reflects the concentration of lifetime savings in owner-occupied housing, which limits the availability of financial assets that can generate steady cash flows in retirement. Older individuals are generally reluctant to reduce their home equity due to a combination of economic and psychological factors, and preferences regarding how to utilize housing equity vary widely by individual. Therefore, beyond the reverse mortgage program, there is a pressing need to introduce a wider range of mechanisms to support the monetization of housing equity among the older population and to actively promote the benefits of existing programs.
The proportion of older individuals in Korea’s population has risen rapidly over the past decade. The share of households headed by individuals aged 65 or older increased from 15.6% in 2007 to 24.1% in 2022 and is projected to reach 50.6% by 2052.1) In response to this demographic shift, there is a growing need for not only parametric reforms to the national pension system but also a broader structural overhaul encompassing both public and private pension schemes. These reforms are essential to enhance the financial sustainability of the overall pension framework and to ensure a stable post-retirement income stream for the aging population. As the share of older households continues to grow, the private sector will inevitably be called upon to assume a greater role in retirement income provision. This article examines the income structure of older households in Korea and discusses the role of real estate holdings, especially owner-occupied housing, as a core component of household assets.
Income structure and asset composition of older households: Characteristics and challenges
Using household panel data, this article analyzes recent trends and key characteristics in the income structure and asset composition of older households over the past decade.2) Figure 1 illustrates current income and total expenditures by age group and year. On a real-value basis, the average household income in Korea has steadily increased since 2007. Notably, this growth has been particularly notable among older households, including those aged 60 to 64. This trend appears to partially reflect the recent attempt to extend the retirement age and a longer average contribution period to the National Pension scheme. In contrast, growth in total expenditures has remained modest compared to income growth. Expenditure levels peak among households headed by individuals aged 45 to 49, and then decline sharply with age. Among older age groups, the declining pace of expenditures closely mirrors the decrease in income, indicating that the expected pattern of “consumption smoothing over the lifecycle” is rarely observed.3)
Research suggests that spending levels among older Korean households are generally insufficient to maintain an adequate standard of living (Kim et al., 2025),4) which could be attributed to the following factors. Rising life expectancy compared to previous generations has introduced greater uncertainty about future financial needs. This uncertainty may pressure retirees, even those with supplementary income sources after retiring from their primary occupations, to curtail current consumption in anticipation of future living and medical expenses.
The more stable and continuous the income structure, the less pressure older households face in preparing for post-retirement living. As shown in Table 1, the share of public and private transfer income—which historically constituted the majority of income among households headed by individuals aged 70 or older—has declined significantly, while the share of pension income has increased. This shift suggests that the income structure of older households has stabilized gradually. However, the income composition of Korea’s older households is rarely considered sufficiently stable or continuous in several critical respects. First, despite the rising share of pension income, its overall level remains relatively low. As of 2021, the combined income from public pensions and private annuities accounted for only 20.6% of current income for the 65–69 group, 22.7% for the 70–74 group, and 17.7% among those aged 75 and older.
Second, it is estimated that the majority of pension income for older households is sourced from the National Pension scheme, while corporate retirement pensions and private annuities made relatively limited contributions. As presented in Table 1, the proportion of older households receiving annuity income has increased substantially over time. For example, in 2021, 70.9% of households with heads aged 70–74 and 48.9% of households headed by those aged 75 and older were reported to receive annuity income, a marked improvement compared to previous years. Nonetheless, this increase primarily reflects expanded coverage under the National Pension scheme. Given that corporate retirement pension plans only gained broader adoption in Korea after 2010, the majority of today’s older households has likely received lump-sum severance pay. Furthermore, the proportion of older households holding private annuity plans remains extremely low, with only 2.4% of individuals aged 70–74 and 0.6% of those aged 75 and older as of 2021. Consequently, income from private annuity plans represents a marginal component of older households’ income portfolios.
Third, property income, composed of interest, dividends, and rental income, accounts for a significantly small share of older households’ total income. This figure has been declining on a time series basis, reaching around 5% as of 2021. This downward trend is closely associated with the composition of household assets, which is characterized by a relatively small share of financial assets, as discussed later.
Fourth, the share of earned income in the total income of older households has increased considerably. When combined with business income, most of which is presumed to come from small-scale self-employment, labor and business income together constitutes between 20.2% (for those aged 75 and older) and 53.3% (for those aged 65–69) of current income. However, much of this income is likely derived from low-wage and unstable employment, making it an unreliable and unstable income source. The high dependence on earned income among older households in Korea is notable even by global standards. According to OECD data (2024), earned income and self-employment income accounted for approximately 48% of the total income of Koreans aged 65 and older as of 2020, one of the highest shares among member countries, comparable only to Mexico and Chile.5)
The lack of stable and consistent income streams among older households is closely linked to the heavy concentration of their assets in real estate. Figure 2 presents the average value of real estate holdings and the share of households owning real estate by age group.6) Both metrics show only a slight decline after the age of 75. For instance, the average value of real estate holdings in the 70–74 group is comparable to that of the 55–59 group. The homeownership rate peaks at 75% among the 70–74 cohort and remains as high as 68.6% even for those aged 75 and older.
Table 2 illustrates the composition of household assets by age group. The share of real estate in total household assets steadily increases with age, reaching a peak of 69.1% among those aged 70–74. This pattern reflects a lifecycle trend in asset accumulation and spending. In Korea, younger households accumulate financial assets while securing housing through lease arrangements such as jeonse (lump-sum deposit leases) or monthly rentals. As they age, these households tend to liquidate financial holdings and lease deposits to purchase housing. As a result, the share of financial assets in their total asset portfolio declines significantly, falling to just 16–18% as they enter the older age segment, while the majority of household wealth is tied up in residential property. This asset composition persists well into advanced age.7) Consequently, the limited financial asset holdings likely force older households to remain active in the labor market.
The role of owner-occupied housing in the asset composition of older households
The predominance of owner-occupied housing in the asset portfolios of older households is not unique to Korea. This trend is widely observed across many countries. According to Marcinkiewicz (2023), the average homeownership rate among households headed by individuals aged 65 and over is approximately 77% across the countries analyzed,8) substantially higher than the 64% observed among those under age 65. A strong preference for homeownership in later life is also evident in Europe, Australia, and the US. Elevated homeownership rates are found across all income quintiles (OECD, 2013).9) In most countries, excluding the US, owner-occupied housing accounts for 60% to 80% of total household assets, with higher proportions generally observed among older households (Lu et al., 2020).10)
Owner-occupied housing, in many countries, represents the culmination of savings and asset accumulation of one’s lifetime. Under the life-cycle hypothesis, individuals are expected to draw down pre-retirement assets to finance consumption in retirement. When those assets are disproportionately concentrated in residential property, older households may turn to home equity as a source of liquid assets.11) There are multiple mechanisms by which home equity can be converted into cash for consumption in old age. These include reverse mortgages, sale-and-leaseback arrangements or home reversion schemes, selling the home and purchasing a lower-cost property in another region, relocating to rental housing, renting out part of the home or using the property as collateral for loans.12) Previous studies suggest that utilizing home equity can help older households maintain their standard of living, mitigate the risk of old-age poverty, and offset shortfalls in public pension income (Rouwendal, 2009; Doling & Elsinga, 2013; Marcinkiewicz, 2022).13)
Despite the liquid nature of owner-occupied housing and the availability of institutional mechanisms such as reverse mortgage schemes in many countries, even individuals of advanced age often remain reluctant to convert home equity into cash flows (Venti & Wise, 2001; Elsinga, 2011; Haffner, 2008; Jones et al., 2012).14) In other words, older individuals are generally unwilling to reduce their equity in owner-occupied housing, regardless of the availability of financial instruments designed to facilitate such transactions. The literature cited above offers a few explanations for this reluctance. First, homeownership is frequently seen as economically rational for many older adults. Even after accounting for opportunity costs, owning residential housing tends to be more cost-effective than renting, while also offering substantial investment value. This rationale held especially true across many countries until 2019, when global interest rates remained historically low. Second, homeownership not only provides housing security but also serves as a critical safeguard against future uncertainties. These two motivations contribute to older adults’ strong reluctance to fully liquidate their home equity in exchange for cash flows or financial assets. For older adults, retaining full ownership of their homes is perceived as a valuable choice, even if it means forgoing cash flows generated from home equity reduction. Third, psychological factors also play a significant role. Many older individuals are wary of mortgage loans due to concerns that a significant drop in property values could erode their home equity. In addition, there is a general aversion to taking out new loans in later life. Although the financial risk associated with reverse mortgages is typically borne by the lender or public guarantor, many older individuals do not fully understand how these instruments work and often perceive them as conventional debt, contributing to low participation rates. Moreover, many older adults develop an emotional attachment to the homes they have occupied for decades. Homes represent more than a physical asset—a repository of family memories, a symbol of personal achievements, and a core part of their identity and social ties to local communities.15) These factors explain not only the reluctance to tap into housing equity, but also the strong resistance to relocating from their long-term residences.16)
Challenges ahead
Securing a stable income structure for older households remains a significant challenge in Korea. Given that most households headed by individuals aged 65 and older are already receiving public and private pension benefits, there is limited scope for further expanding pension income. Accordingly, older homeowners must recognize that utilizing their home equity is essential to maintaining reasonable levels of consumption and preserving quality of life in retirement. Achieving this shift in perception is just as important as the system establishment through government policy.
The relevant literature offers a range of mechanisms for leveraging home equity. It is imperative for the government to assess and institutionalize these options that incentivize older households to convert home equity into retirement income. Any such policy design should be underpinned by the strong preference among older adults for retaining homeownership. Although Korea’s reverse mortgage program has been introduced and is gradually gaining traction, its benefits should be more actively communicated to the older population to foster broader acceptance. It is also worth considering developing a viable sale-and-leaseback market, which enables older homeowners to sell part or all of their home equity while continuing to reside in the property under long-term rental arrangements. Beyond these strategies, a range of policy measures is needed to support alternative methods of generating cash flows. Given the wide variation in financial circumstances, psychological preferences, regional housing market dynamics, and local economic conditions, older households should be provided with a diverse set of options tailored to their specific needs.
1) Based on Statistics Korea’s KOSIS Household Projections (2022, national level).
2) This article utilizes data from the “Fiscal Panel” compiled by the Korea Institute of Public Finance. The dataset spans 15 years, from the 1st to the 15th panel, covering the period 2007–2021 (survey years: 2008–2022).
3) To accurately estimate whether individuals smooth consumption over their life cycle, it is necessary to measure each individual’s consumption across their entire life span, which requires sophisticated empirical analysis. Therefore, as in this article, comparing statistics across different age groups at a single point in time has limitations in providing a precise assessment.
4) Kim, M.L., Jung, H.C. & Kim, J.C., 2025, Aging, Household Wealth, and Consumption (II): Consumption and Asset Adequacy of Elderly Household, KCMI Research Report 25-03.
5) See OECD (2024), p.197, Figure 7.1 (OECD, 2024, Pensions at a Glance 2023 : OECD and G20 Indicators).
6) In this article, real estate assets consist primarily of residential housing.
7) Among financial assets, the proportion of private pension plans capable of generating cash flows is extremely low (0.9% for the 70–74 group; 0.2% for those aged 75 and older). The vast majority consists of deposits, which have low returns and limited ability to generate cash flows (96.3% for the 70–74 group; 98.7% for those aged 75 and older).
8) Marcinkiewicz, E., 2023, Elderly vs Working-Age generation: Homeownership and housing asset inequality in a cross-country perspective, LWS Working Paper Series No. 41, Cross-National Data Center in Luxembourg.
9) OECD, 2013, The role of housing, financial wealth and public services for adequate living standards in old age, Pensions at Glance 2013: OECD and G20 Indicators.
10) Lu, X., Guo, J., Gan, L., 2020, International comparison of household asset allocation: Micro-evidence from cross-country comparisons, Emerging Markets Review 43, 100691.
11) In this article, “housing equity” refers to the ownership stake in a home.
12) Housing equity access schemes such as reverse mortgages and home equity loans do not involve an immediate sale of housing equity. However, since the repayment of principal and interest typically requires the eventual sale of housing equity (in full or in part) at loan maturity, they are broadly categorized as housing equity releasing tools. In sale-and-leaseback arrangements, the buyer of housing equity gains a proportional share of any price appreciation but also bears the same proportion of any price depreciation. Entities that purchase housing equity in such arrangements include financial institutions and public housing finance agencies, making them structurally distinct from conventional transactions between individuals.
13) Rouwendal, J.,2009, Housing wealth and household portfolios in an ageing society, De Economist 157(1), 1-48; Doling, J., Elsinga, M., 2013, Demographic change and housing wealth: Home-owners, Pensions and Asset-based welfare in Europe, Springer; Marcinkiewicz, E., Chybalski, F., 2022, Income-poor, asset-rich? The Role of homeownership in shaping the welfare position of the elderly, LWS Working Paper Series No. 38, Cross-National Data Center in Luxembourg.
14) Venti, S., Wise, D., 2001, Aging and housing equity: Another look, NBER Working Paper 8608; Elsinga, M., 2011, A qualitative comparative approach to the role of housing equity in the life cycle, International Journal of Housing Policy 11(4), 357-374; Haffner, M., 2008, Savings for old age? Housing wealth of the Dutch elderly, Housing, Theory and Society 25(2), 110-131; Jones, A., Geilenkeuser, T., Helbrecht, I., Quilgars, D., 2012, Demographic change and retirement planning: Comparing households’ views on the role of housing equity in Germany and UK, International Journal of Housing Policy 12(1), 27-45.
15) The psychological preference for remaining in one’s home is commonly referred to as “age in place.” For factors influencing this preference, see Clark et al. (2023) (Clark, W., ViforJ, R., Phelps, C., 2023, Place attachment and aging in place: Preferences and disruptions, Sage Journals 46(3-4)).
16) Other factors, such as the costs associated with relocating through downsizing, may also contribute to this reluctance. However, for brevity, these explanations are omitted here.
Income structure and asset composition of older households: Characteristics and challenges
Using household panel data, this article analyzes recent trends and key characteristics in the income structure and asset composition of older households over the past decade.2) Figure 1 illustrates current income and total expenditures by age group and year. On a real-value basis, the average household income in Korea has steadily increased since 2007. Notably, this growth has been particularly notable among older households, including those aged 60 to 64. This trend appears to partially reflect the recent attempt to extend the retirement age and a longer average contribution period to the National Pension scheme. In contrast, growth in total expenditures has remained modest compared to income growth. Expenditure levels peak among households headed by individuals aged 45 to 49, and then decline sharply with age. Among older age groups, the declining pace of expenditures closely mirrors the decrease in income, indicating that the expected pattern of “consumption smoothing over the lifecycle” is rarely observed.3)
Research suggests that spending levels among older Korean households are generally insufficient to maintain an adequate standard of living (Kim et al., 2025),4) which could be attributed to the following factors. Rising life expectancy compared to previous generations has introduced greater uncertainty about future financial needs. This uncertainty may pressure retirees, even those with supplementary income sources after retiring from their primary occupations, to curtail current consumption in anticipation of future living and medical expenses.
The more stable and continuous the income structure, the less pressure older households face in preparing for post-retirement living. As shown in Table 1, the share of public and private transfer income—which historically constituted the majority of income among households headed by individuals aged 70 or older—has declined significantly, while the share of pension income has increased. This shift suggests that the income structure of older households has stabilized gradually. However, the income composition of Korea’s older households is rarely considered sufficiently stable or continuous in several critical respects. First, despite the rising share of pension income, its overall level remains relatively low. As of 2021, the combined income from public pensions and private annuities accounted for only 20.6% of current income for the 65–69 group, 22.7% for the 70–74 group, and 17.7% among those aged 75 and older.
Second, it is estimated that the majority of pension income for older households is sourced from the National Pension scheme, while corporate retirement pensions and private annuities made relatively limited contributions. As presented in Table 1, the proportion of older households receiving annuity income has increased substantially over time. For example, in 2021, 70.9% of households with heads aged 70–74 and 48.9% of households headed by those aged 75 and older were reported to receive annuity income, a marked improvement compared to previous years. Nonetheless, this increase primarily reflects expanded coverage under the National Pension scheme. Given that corporate retirement pension plans only gained broader adoption in Korea after 2010, the majority of today’s older households has likely received lump-sum severance pay. Furthermore, the proportion of older households holding private annuity plans remains extremely low, with only 2.4% of individuals aged 70–74 and 0.6% of those aged 75 and older as of 2021. Consequently, income from private annuity plans represents a marginal component of older households’ income portfolios.
Third, property income, composed of interest, dividends, and rental income, accounts for a significantly small share of older households’ total income. This figure has been declining on a time series basis, reaching around 5% as of 2021. This downward trend is closely associated with the composition of household assets, which is characterized by a relatively small share of financial assets, as discussed later.
Fourth, the share of earned income in the total income of older households has increased considerably. When combined with business income, most of which is presumed to come from small-scale self-employment, labor and business income together constitutes between 20.2% (for those aged 75 and older) and 53.3% (for those aged 65–69) of current income. However, much of this income is likely derived from low-wage and unstable employment, making it an unreliable and unstable income source. The high dependence on earned income among older households in Korea is notable even by global standards. According to OECD data (2024), earned income and self-employment income accounted for approximately 48% of the total income of Koreans aged 65 and older as of 2020, one of the highest shares among member countries, comparable only to Mexico and Chile.5)
The lack of stable and consistent income streams among older households is closely linked to the heavy concentration of their assets in real estate. Figure 2 presents the average value of real estate holdings and the share of households owning real estate by age group.6) Both metrics show only a slight decline after the age of 75. For instance, the average value of real estate holdings in the 70–74 group is comparable to that of the 55–59 group. The homeownership rate peaks at 75% among the 70–74 cohort and remains as high as 68.6% even for those aged 75 and older.
Table 2 illustrates the composition of household assets by age group. The share of real estate in total household assets steadily increases with age, reaching a peak of 69.1% among those aged 70–74. This pattern reflects a lifecycle trend in asset accumulation and spending. In Korea, younger households accumulate financial assets while securing housing through lease arrangements such as jeonse (lump-sum deposit leases) or monthly rentals. As they age, these households tend to liquidate financial holdings and lease deposits to purchase housing. As a result, the share of financial assets in their total asset portfolio declines significantly, falling to just 16–18% as they enter the older age segment, while the majority of household wealth is tied up in residential property. This asset composition persists well into advanced age.7) Consequently, the limited financial asset holdings likely force older households to remain active in the labor market.
The role of owner-occupied housing in the asset composition of older households
The predominance of owner-occupied housing in the asset portfolios of older households is not unique to Korea. This trend is widely observed across many countries. According to Marcinkiewicz (2023), the average homeownership rate among households headed by individuals aged 65 and over is approximately 77% across the countries analyzed,8) substantially higher than the 64% observed among those under age 65. A strong preference for homeownership in later life is also evident in Europe, Australia, and the US. Elevated homeownership rates are found across all income quintiles (OECD, 2013).9) In most countries, excluding the US, owner-occupied housing accounts for 60% to 80% of total household assets, with higher proportions generally observed among older households (Lu et al., 2020).10)
Owner-occupied housing, in many countries, represents the culmination of savings and asset accumulation of one’s lifetime. Under the life-cycle hypothesis, individuals are expected to draw down pre-retirement assets to finance consumption in retirement. When those assets are disproportionately concentrated in residential property, older households may turn to home equity as a source of liquid assets.11) There are multiple mechanisms by which home equity can be converted into cash for consumption in old age. These include reverse mortgages, sale-and-leaseback arrangements or home reversion schemes, selling the home and purchasing a lower-cost property in another region, relocating to rental housing, renting out part of the home or using the property as collateral for loans.12) Previous studies suggest that utilizing home equity can help older households maintain their standard of living, mitigate the risk of old-age poverty, and offset shortfalls in public pension income (Rouwendal, 2009; Doling & Elsinga, 2013; Marcinkiewicz, 2022).13)
Despite the liquid nature of owner-occupied housing and the availability of institutional mechanisms such as reverse mortgage schemes in many countries, even individuals of advanced age often remain reluctant to convert home equity into cash flows (Venti & Wise, 2001; Elsinga, 2011; Haffner, 2008; Jones et al., 2012).14) In other words, older individuals are generally unwilling to reduce their equity in owner-occupied housing, regardless of the availability of financial instruments designed to facilitate such transactions. The literature cited above offers a few explanations for this reluctance. First, homeownership is frequently seen as economically rational for many older adults. Even after accounting for opportunity costs, owning residential housing tends to be more cost-effective than renting, while also offering substantial investment value. This rationale held especially true across many countries until 2019, when global interest rates remained historically low. Second, homeownership not only provides housing security but also serves as a critical safeguard against future uncertainties. These two motivations contribute to older adults’ strong reluctance to fully liquidate their home equity in exchange for cash flows or financial assets. For older adults, retaining full ownership of their homes is perceived as a valuable choice, even if it means forgoing cash flows generated from home equity reduction. Third, psychological factors also play a significant role. Many older individuals are wary of mortgage loans due to concerns that a significant drop in property values could erode their home equity. In addition, there is a general aversion to taking out new loans in later life. Although the financial risk associated with reverse mortgages is typically borne by the lender or public guarantor, many older individuals do not fully understand how these instruments work and often perceive them as conventional debt, contributing to low participation rates. Moreover, many older adults develop an emotional attachment to the homes they have occupied for decades. Homes represent more than a physical asset—a repository of family memories, a symbol of personal achievements, and a core part of their identity and social ties to local communities.15) These factors explain not only the reluctance to tap into housing equity, but also the strong resistance to relocating from their long-term residences.16)
Challenges ahead
Securing a stable income structure for older households remains a significant challenge in Korea. Given that most households headed by individuals aged 65 and older are already receiving public and private pension benefits, there is limited scope for further expanding pension income. Accordingly, older homeowners must recognize that utilizing their home equity is essential to maintaining reasonable levels of consumption and preserving quality of life in retirement. Achieving this shift in perception is just as important as the system establishment through government policy.
The relevant literature offers a range of mechanisms for leveraging home equity. It is imperative for the government to assess and institutionalize these options that incentivize older households to convert home equity into retirement income. Any such policy design should be underpinned by the strong preference among older adults for retaining homeownership. Although Korea’s reverse mortgage program has been introduced and is gradually gaining traction, its benefits should be more actively communicated to the older population to foster broader acceptance. It is also worth considering developing a viable sale-and-leaseback market, which enables older homeowners to sell part or all of their home equity while continuing to reside in the property under long-term rental arrangements. Beyond these strategies, a range of policy measures is needed to support alternative methods of generating cash flows. Given the wide variation in financial circumstances, psychological preferences, regional housing market dynamics, and local economic conditions, older households should be provided with a diverse set of options tailored to their specific needs.
1) Based on Statistics Korea’s KOSIS Household Projections (2022, national level).
2) This article utilizes data from the “Fiscal Panel” compiled by the Korea Institute of Public Finance. The dataset spans 15 years, from the 1st to the 15th panel, covering the period 2007–2021 (survey years: 2008–2022).
3) To accurately estimate whether individuals smooth consumption over their life cycle, it is necessary to measure each individual’s consumption across their entire life span, which requires sophisticated empirical analysis. Therefore, as in this article, comparing statistics across different age groups at a single point in time has limitations in providing a precise assessment.
4) Kim, M.L., Jung, H.C. & Kim, J.C., 2025, Aging, Household Wealth, and Consumption (II): Consumption and Asset Adequacy of Elderly Household, KCMI Research Report 25-03.
5) See OECD (2024), p.197, Figure 7.1 (OECD, 2024, Pensions at a Glance 2023 : OECD and G20 Indicators).
6) In this article, real estate assets consist primarily of residential housing.
7) Among financial assets, the proportion of private pension plans capable of generating cash flows is extremely low (0.9% for the 70–74 group; 0.2% for those aged 75 and older). The vast majority consists of deposits, which have low returns and limited ability to generate cash flows (96.3% for the 70–74 group; 98.7% for those aged 75 and older).
8) Marcinkiewicz, E., 2023, Elderly vs Working-Age generation: Homeownership and housing asset inequality in a cross-country perspective, LWS Working Paper Series No. 41, Cross-National Data Center in Luxembourg.
9) OECD, 2013, The role of housing, financial wealth and public services for adequate living standards in old age, Pensions at Glance 2013: OECD and G20 Indicators.
10) Lu, X., Guo, J., Gan, L., 2020, International comparison of household asset allocation: Micro-evidence from cross-country comparisons, Emerging Markets Review 43, 100691.
11) In this article, “housing equity” refers to the ownership stake in a home.
12) Housing equity access schemes such as reverse mortgages and home equity loans do not involve an immediate sale of housing equity. However, since the repayment of principal and interest typically requires the eventual sale of housing equity (in full or in part) at loan maturity, they are broadly categorized as housing equity releasing tools. In sale-and-leaseback arrangements, the buyer of housing equity gains a proportional share of any price appreciation but also bears the same proportion of any price depreciation. Entities that purchase housing equity in such arrangements include financial institutions and public housing finance agencies, making them structurally distinct from conventional transactions between individuals.
13) Rouwendal, J.,2009, Housing wealth and household portfolios in an ageing society, De Economist 157(1), 1-48; Doling, J., Elsinga, M., 2013, Demographic change and housing wealth: Home-owners, Pensions and Asset-based welfare in Europe, Springer; Marcinkiewicz, E., Chybalski, F., 2022, Income-poor, asset-rich? The Role of homeownership in shaping the welfare position of the elderly, LWS Working Paper Series No. 38, Cross-National Data Center in Luxembourg.
14) Venti, S., Wise, D., 2001, Aging and housing equity: Another look, NBER Working Paper 8608; Elsinga, M., 2011, A qualitative comparative approach to the role of housing equity in the life cycle, International Journal of Housing Policy 11(4), 357-374; Haffner, M., 2008, Savings for old age? Housing wealth of the Dutch elderly, Housing, Theory and Society 25(2), 110-131; Jones, A., Geilenkeuser, T., Helbrecht, I., Quilgars, D., 2012, Demographic change and retirement planning: Comparing households’ views on the role of housing equity in Germany and UK, International Journal of Housing Policy 12(1), 27-45.
15) The psychological preference for remaining in one’s home is commonly referred to as “age in place.” For factors influencing this preference, see Clark et al. (2023) (Clark, W., ViforJ, R., Phelps, C., 2023, Place attachment and aging in place: Preferences and disruptions, Sage Journals 46(3-4)).
16) Other factors, such as the costs associated with relocating through downsizing, may also contribute to this reluctance. However, for brevity, these explanations are omitted here.