National aggregator AFG
has announced new results for the final quarter of 2016 in which lodgement volume grew by 9.9% year-on-year.
This figure, which comes from the AFG Mortgage Index
, shows a tale of two very different Australias, said chief operating officer David Bailey
While Victoria leads the pack with an increase of 23% for the year, Queensland rebounded with an 18% growth in the same time period. NSW came in third place with a 10% increase in lodgements.
The rest of the country told a much different story, Bailey said.
“South Australia remained flat across 2016 and the tough time experienced by the WA economy was evident with a 16% drop for the year. The Northern Territory also showed a drop of 18% across the year.”
Brokers taking their share
Another promising result was that the major banks had dropped share across all sectors of the market in the fourth quarter of 2016, Bailey said.
Overall, non-majors made up 34.7% of total market share, the highest figure since before 2013. This trend has been driven by increased fixed and variable rates as well as tighter lending for investors.
“This has encouraged consumers to examine their own situation and we are seeing many pick up the phone to their mortgage broker to determine if their loan is still the most appropriate for their circumstances.”
A greater level of competition in the marketplace was driving this trend, Bailey told Australian Broker
, especially with the non-majors “stepping up their game” when it comes to attracting business.
“We expect this trend to continue into the new calendar year as an increasing number of consumers recognise that a mortgage broker is in the unique position of being able to provide a comprehensive view of the alternatives available across lenders and products.”
Whether this was an ongoing trend depended on bank pricing and the cost of funds in the marketplace, he added.
“I’d like to see higher levels of competition since more competition and more choice pushes more people to brokers.”
A positive outlook for 2017
Bailey predicted the mortgage market would maintain levels of strength across NSW and Victoria. He also hoped the Western Australian government succeeded in boosting activity in Perth and the border regions. Finally, he said he expected the solid growth in Queensland to continue.
“All-in-all, we’ll expect levels of competition to continue. We’d expect cost of funds will increase for most parties and they will be passed on to the consumer as well at some point over the next 12 months. That will require more people to understand what mortgage rate they’re paying and therefore more will need to go to a broker.”
Non-major market share surges amid refinancing trend
Aggregator reports record year
Gap in home loan rates continues to widen