A property investment association has raised concerns about changes to broker pay, citing the number of investors who rely on brokers to get finance.
According to the Property Investment Professionals of Australia (PIPA) 2018 Investor Sentiment Survey, more than 75% of investors secured their last investment loan through a mortgage broker, a number that has continued to increase.
Around 86% of investors said they intended to finance their next investment loan through a broker.
Chairman of PIPA Peter Koulizos slammed the final report for proving “lawlessness is rife”. He said the multitude of examples of potentially criminal activity within the financial services sector was a sign of what happens when money becomes more important than customer outcomes.
He added, “If this is what happens in a regulated industry, imagine the situation in the property investment advice sector where spruikers can ruin people’s financial lives without much chance of prosecution because it is an unregulated environment?
“The report suggests that many in the financial services sector were motivated by greed rather than acting in their client’s best interests, however, such a blanket statement does a disservice to the majority of honest employees working in the industry.
“Mortgage brokers, for example, create much-needed competition and deserve to be paid for their professional service, so we’re pleased that the Federal Government has questioned the recommendation that commissions be paid by consumers rather than banks, who are the ones who can clearly afford it the most.”
Koulizos said he hoped the report’s release would bring an end to the over-the-top credit restrictions that had been in play for more than three years, which were starting to have a negative impact on the national economy.
“Solid borrowers, who should have no problem securing finance under normal credit conditions, are getting knocked back for silly reasons such as spending $50 on Uber Eats on a Friday night,” he said.
“With property prices continuing to fall in our two biggest capital cities, inflation stubbornly low, and wages flat-lining, lenders need to release their strangle-hold on credit so our economy can get moving again.”