According to digital loan platform HashChing, a June survey of their broker network has revealed 59.26% of Australian mortgage brokers believe customers come to them purely for the interest rates they can provide.
The survey also found that 11% of brokers feel clients are there for customer service, another 11% agreed it was for custom loans, while 3.9% argue they were searching for greater loan flexibility with a mortgage broker.
The majority of brokers surveyed communicated that their clients are searching for advice surrounding optimal home loan interest rates. With the fear of looming interest rate hikes, there’s more pressure than ever on brokers to prove their value.
“Brokers are still seeing themselves as a portal to better interest rates for their customers. This is actually quite a pessimistic view of the profession – and one that means that if interest rates do rise, brokers will start to feel under pressure to demonstrate value,” said HashChing chief executive Arun Maharaj.
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55% of the brokers surveyed in the HashChing network feel confident that interest rates will rise this year.
This sentiment is backed by a recent ANZ/Property Council survey that found that 30% of the property industry professionals surveyed expect to see the Reserve Bank of Australia (RBA) increase interest rates over the coming 12 months.
While Australia’s current housing market remains on the boil with prices continuing to rise, 33% of surveyed brokers believe it will begin to simmer by the end of December 2021, 48% predict it will stay at current levels, and only 18% expect the market to heat up further by the end of the year.
These findings suggest few brokers feel optimistic about the market despite the government’s Federal Budget plans to stimulate the economy through the property industry.
Many brokers “don’t see a major reason for celebration from the recent federal budget announcement,” said Maharaj.
Most major banks are already raising interest rates on fixed mortgages. However, broker sentiment is largely based on what the market will do, rather than the actions of the RBA.
“Brokers are expecting the market to either cool or stay the same for the rest of this year, and they’re not often wrong in their predictions on this front, given their proximity to the heart of the industry,” said Maharaj.
“That’s good news for first home buyers, and bad news for the government hoping to use the industry to kick-start the Aussie economy. But only time will tell!”
Regarding refinancing, 44% of mortgage brokers surveyed were experiencing an upswing in customer refinancing, while 56% said levels remained similar to previous years for the same period.
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“We’re also seeing that despite the pandemic, there’s still over a third (37%) of brokers not utilising video calling technology for client interactions,” Maharaj said.
“This data was gathered before the NSW lockdown, so it will be interesting to see if that changes. It has to be said that the majority (55%) are indeed using modern technology like video conferencing to make client interactions easier, which is pleasing to see.”
“This is still a conservative time for many, and that will be reinforced by the NSW lockdown,” he concluded.
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