The Australian mortgage broking market
Property is a major asset in Australia and many people aspire to the dream of ‘owning their own home’. A large number also build a property investment portfolio, by adding another or multiple investment properties.
Much is written about the state of the housing market because of this great penchant for buying property. Everyone is well aware we faced rising interest rates over 2010, but we have experienced some relief with rate cuts in late 2011 and borrower demand is still healthy, though subdued.
Mortgage Choice expects housing finance commitments to rebound in FY12 due to housing undersupply, the correction in housing prices, much hotter competition between lenders, steady population and wage growth, low rental vacancy rates, low unemployment and rising rents. Recent share market volatility may also see property become more appealing, especially to investors.
With mortgage brokers currently sourcing 43% of new home loans in Australia, the industry’s prospects are positive. We are an increasingly appealing proposition to consumers and to lenders. Greater mortgage market competition, the widely publicised home loan exit fee ban and much rhetoric about switching sees borrowers more aware of the vast range of options they need help with navigating. Many will want to work with a professional who offers choice and convenience while not playing favourites.
This is where Mortgage Choice’s unique ‘paid the same’ policy stands us apart from competitors.
The relatively new National Consumer Credit Protection Act will have a powerful influence on broker usage as well.
Not only do 56% of the 1,000+ respondents to our most recent annual Consumer Sentiment Survey know the services provided by mortgage brokers, 64% said they will consider using a mortgage broker in future.
Mortgage broker market share should move to 50% and beyond soon, as we better promote ourselves and consumers’ perception of the value of a broker improves. This predicted growth lends itself to an exciting future where expert knowledge, convenience and choice will become the standard by which borrowers assess their home loan needs.