Shanghai to Promote Reverse Mortgage for Seniors

China is now starting to jump on the reverse mortgage bandwagon. The shanghai government is now going to actually promote reverse mortgages.

The Shanghai municipal government has just announced that it will promote reverse mortgages this year, after years of controversy on the topic.

Du Peng, deputy director of the Population and Development Studies with Beijing's Renmin University of China, welcomes the move. But he says the wide promotion will take time and considerable effort.

The population of china is aging as in other parts of the world and they are looking for ways to support this aging population. In Shanghai for instance, 20% of the population is over the age of 60 years old. Even with promotion, it will take 10 years for it to become widely accepted.

"It provides another choice for seniors to support themselves. But it will take over ten years for it to become popular, because the oldest groups of people who now own apartments are mostly the middle aged. Reverse mortgage will only be more applicable when these people retire."