Broker market share likely to grow, survey suggests

by Julia Corderoy29 Apr 2015
As the next generation of property buyers begins to dominate the market, the market share of brokers is likely to rise, a new survey suggests.

The 2015 QBE Barometer report, which randomly surveyed 1,014 mortgagors or consumers intending to take out a home loan, revealed that two in three (63%) consumers would go direct to a lender while just over a third (37%) would use a broker.

However, the data suggests that the number of consumers who choose to use a broker is likely to rise as younger generations begin to penetrate the property market. 

The report reveals that younger respondents were more likely than older respondents to go through a broker, with 39% of those under 45 years using a broker, compared to 31% of those over 45 years. 

Further, the number of people surveyed who rejected dealing with banks has increased significantly compared to last year, from 9% to 16%. While this hasn’t affected the share of mortgage lending currently, with the number of respondents choosing to go direct to a lender remaining steady overall compared to last year's survey, the report does admit that “it may be an early indicator of future sentiment if the trend continues”. 

Jenny Boddington, financial institutions EGM and CEO of QBE LMI told Australian Broker that mortgage broking has been hugely benefitted by regulation, specifically the introduction of the NCCP in 2009. As a result, younger people are likely to look upon the mortgage broking ‘brand’ more favourably than older generations, and are more likely to use a mortgage broker.
 

COMMENTS

  • by MCC 29/04/2015 10:28:43 AM

    An interesting add on to this article is something that resonated with me in respect to younger generations, ''Y'' & beyond, after listening to past presentations on selling to different generations. They come from more dislocated families where trust has been lacking due to increased incidents of parent separation. If you can establish a strong trusting relationship with them it will carry the test of time. That's speaking from a 'baby boomers' perspective. Brokers / Credit Advisers have a strong value proposition to take advantage of that, which also often involves an old style formal interview. The general public have now also become better educated in understanding that ''banks'' are just selling products & of course THEIR products, the selling of which is negatively impacted by target based incentive schemes! (parting shot)

  • by Stephen Hale - MFAA 29/04/2015 12:03:09 PM

    Heads up. 2014 results show that brokers wrote slightly under 51% of the total market last year and make up over 60% of the growth rate in the industry. The MFAA are soon to publish the first quarter results for 2015. Based on these figures the broker conversion rate must very high. Thanks QBE for a great report.

  • by Geoff Mannix 30/04/2015 2:47:22 PM

    Interesting that it is the younger people who are more likely to use a Broker than the older respondents. I suspect that in some cases this may have to do about some misguided loyalty to a particular Bank.