Business News

DomaCom eyes July for product launch

Online-based property exchange provider DomaCom is looking at July for the release of its debt-free protected equity release product aimed at senior Australians.

The product will work in conjunction with DomaCom’s fractional residential property facility targeted at SMSF investors.

“It will embrace people with existing reverse mortgages looking to discontinue that for whatever reason and the main reason is probably cost. We’ve been engaged with seniors through various organisations and the feedback we’re getting is that there is some discontentment with the interest rates associated with the reverse mortgage products,” DomaCom sales and marketing general manager Warren Gibson told selfmanagedsuper.

“For people that aren’t in reverse mortgages, we perceive a greater need for equity release strategies in the future due to the aging population and the unpreparedness of seniors financially.”

DomaCom is looking to attract money from SMSF members to fund its equity release offering by providing the ability to employ fractional investing in residential property to enhance diversification within their investment portfolios.

“It was largely conceived as a solution for the SMSF market to invest because no one seemed to be providing residential property as an asset allocation class in any way other than purchasing an entire property,” Gibson said.

The mismatching of investment timelines has led to many of the problems with reverse mortgages whereby short-term debt was used to fund longer-term requirements of the equity release customers.

According to Gibson, DomaCom’s plan of funding equity release facilities through SMSF investments would provide a better alignment of time horizons.

“When we considered it, we wondered who’s got a 10, 15 or 20-year time horizon and we thought super funds do,” he said.

To help its progress in 2013, DomaCom has just hired former Skandia chief executive Ross Laidlaw as chief financial officer and chief operating officer.

“It’s a dual role and he’ll be driving the development of our platform,’ Gibson said.

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