Industry headcount to dwindle under 'new normal'

by Adam Smith29 Mar 2012

Mortgage broker numbers are set to fall as consumer credit appetite settles into a "new normal".

The J.P. Morgan/Fujitsu Australian Mortgage Industry Report has pointed to a "fundamental shift" in risk appetite among borrowers, lenders and regulators. The report predicted that single-digit credit growth is likely to be the future of the Australian economy.

Fujitsu Australia and New Zealand executive director Martin North predicted that broker numbers would contract further in a "lower growth, higher risk environment".

"I do not expect to see a return to the buoyant times of the mid 2000s in the years ahead. This will flow on to lower tax takes and a likely fall in the number of mortgage brokers," North said.

The report claimed that consumer tolerance for debt "reduced substantially" from 2007, with the proportion of new households taking on debt more than halving to 3.3% per annum. North warned that government intervention to stimulate housing demand would be a mistake, and urged policymakers, industry participants and lenders to accept a future of low credit growth.

"In this lower growth environment, there is the risk that policy makers start to think about new incentives to kick-start the housing sector, but this would be a potentially costly mistake as it fails to appreciate the true impact of the new normal. Previous attempts to stimulate the market did little long-term good, and merely lifted house prices to their current high levels," North said.

COMMENTS

  • by ozboy 29/03/2012 10:01:34 AM

    And Mr North has been so on the mark with his other predictions....Nostradamus he is NOT!

  • by JBJB 29/03/2012 10:52:33 AM

    Rarely does North have anything positive to say about the Australian Broker channel. Suggest we would be all better off if he took his opinions back to his homeland.

  • by iMac 10/04/2012 1:10:47 PM

    I've not ever read one 'good news' editorial about the broker channel from 'North'. He is to brokers as Tokyo Rose was to our WW2 diggers. She was resourced by the enemy/opposition. I'll give my broker colleagues one guess as to who may be funding Mr North. Of course his funding would never be anything close to the big four banks, excluding one that has close ties to Australia and New Zealand, they've been OK.
    Keep up the good work guys and girls and support the sector that supports us brokers, the Non bank sector. Oh and a bank based in Adelaide does a good job at that too.