In the July to September 2020 quarter, brokers hit the highest ever market share level in history. Settling 60.1% of residential mortgages for the period, the figures surpassed the March 2019 quarter market share record of 59.7% by 0.4 of a percentage point.
When compared to previous September quarters, the result is 5.2 percentage points higher than the September 2019 quarter and 1.0 percentage point higher than the September 2018 quarter.
The data, commissioned by the Mortgage & Finance Association of Australia (MFAA) and collated by research group and CoreLogic business comparator, assesses the value of new settlements written by the top 18 aggregators and brokers as a percentage of ABS Housing Finance commitments.
The report found that the September 2020 quarter experienced another historic high, boasting the largest by dollar value of new loans ever recorded, with $57.47 billion settled by the 18 leading aggregators. This was up 24.82% in value from the September 2019 quarter, which saw $46.09 billion of new home loans settled.
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Broker-originated loans declined in the previous quarter (March-June 2020) with unusually long delays in processing discharges, influenced by the uncertainty of the COVID-19 pandemic and the first recession in Australia in 29 years.
MFAA CEO Mike Felton expressed that the September 2020 milestone is a testament to the assistance brokers provide their clients with despite challenging times, and that this would ensure further increases in the broker market share in years to come.
“It is also evidence of the ever-increasing trust and confidence that consumers are placing in mortgage brokers as our industry faces the imminent introduction of a best interests duty and related reforms. We are confident that these reforms will continue to differentiate our channel and that our industry can look forward to further increases in market share in the years ahead,” Mr Felton said.
Loan Market executive chairman Sam White echoed Mr Felton’s sentiments regarding the value mortgage brokers offer Australian consumers across the country.
“We’ve seen time and time again; customers turn to their brokers when they need information fast and we’ve seen this in play throughout COVID and all of 2020.
“After this date, customers will have a clear choice; deal with a broker who is obligated to work in the clients best interest or deal with a bank employee who isn’t,” Mr White said.
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The growing popularity of the broker channel is likely influenced by borrowers wanting to take advantage of record low interest rates, incentives like the HomeBuilder grant or because they have been experiencing financial hardship.
The latest data from the Australian Bureau of Statistics (ABS) found that the seasonally adjusted total value of home loan approvals rose by 5.9% in September.
Approximately 50% of those owner-occupier approvals came from the construction of new dwellings, which saw a 25.3% increase in September following a 19.2% rise in August. First Home Buyer (FHB) owner-occupier approval also saw a substantial rise of 6%.
ABS head of finance and wealth Amanda Seneviratne puts the historically high levels down to “low interest rates and government incentives.”
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Whichever way you splice it, the diligent work of mortgage brokers across the nation has ensured their clients debt situations improve significantly during uncertainty.
From a global pandemic resulting in an economic downturn to bushfires that ravaged the country, it’s been a difficult year for many. MFAA’s Mike Felton acknowledged that brokers have continued to bolster the economy and the lives of their clients during these times.
“While I am always proud of the hard work and professionalism of everyone in our industry, the way brokers have overcome their own challenges and vulnerabilities this year – maintained their focus on their customer’s needs while achieving their highest market share result to date – has been nothing short of inspirational,” Mr Felton said.
Words by Katy Holliday
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