Broker market share smashes 55%

by Miklos Bolza21 Nov 2017
Financial brokers settled 55.7% of all residential mortgages in Australia during the September quarter, according to the latest industry data.

New research from the Mortgage and Finance Association of Australia (MFAA), in partnership with CoreLogic-owned Comparator, puts market share at an “all-time record” high, up from 53.6% recorded in the same time period last year

MFAA CEO Mike Felton told Australian Broker he was confident that broker market share would continue to increase, reaching 60% in three to five years.

The latest figures represent $51.8bn worth of residential loans settled by brokers across the country during the September quarter, an increase of 6.6% from $48.6bn a year earlier.

Year-on-year, broker market share has risen by 2.1 percentage points from the September 2016 quarter and 3.1 percentage points from the September 2015 quarter.

“What a great result this was in these market conditions. The results suggest a rising trajectory for the broker-originated lending share and are further evidence of the trust and confidence consumers have in their broker,” Felton said.

Addressing recommendations by the Australian Investments & Securities Commission (ASIC) in its broker remuneration review would help further drive trust and confidence in the industry and lay the foundations for future market share growth, he added.

“Improved governance and professionalism are highly supportive of the broker value proposition but if we continue to concentrate on producing great service and outcomes for consumers the growth in market share should take care of itself.”

He continued, saying that figures relating to broker market share need to be looked at alongside an increase in broker numbers: a figure which will be made available early next year. Despite this, growth in broker market share in both value and percentage terms was “extremely positive,” he said.

The research was compiled by the value of loans settled by 19 leading brokers and aggregators as a percentage of the housing finance commitments recorded by the Australian Bureau of Statistics (ABS).

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COMMENTS

  • by John Tobin 22/11/2017 8:57:17 AM

    The banking executives just don't get it. They lobby the regulator for changes which "they believe" will make it more difficult for brokers to write loans. Then when those changes are implemented they find their market share of new loans written drops.

    The fact is brokers adapt quickly, they have to to survive, where as bank staff still receive their wages if they write loans or not - so it appears they are slower to adapt.

    Also customers are now much more savvy and question how unbiased can an individual bank really be when all they can offer is their own products. Compare that to the broker offering of products from a wide range of lenders available to meet client needs.