Following a “disappointing” drop in market share over the previous quarter, data just released showed mortgage brokers reclaimed 0.4 percentage points over the October to December 2019 quarter, in which they facilitated 55.3% of all new residential home loans, according to data released by a CoreLogic business and commissioned by the MFAA.
While the result represents the first year-on-year decline in broker market share for the final quarter of a calendar year, MFAA CEO Mike Felton attributed the outcome, in part, to market share coming off a high base in the December 2018 quarter — a period which saw tightened credit conditions during the royal commission lead to a surge in demand for broker services and stronger than normal end of 2018 figures.
“Contextually, the velocity of the year-on-year decline has also slowed significantly from 4.2 percentage points between the September 2018 quarter (59.1%) and the September 2019 quarter (54.9%), to 1.5 percentage points between December 2018 (56.8%) and this December 2019 quarter (55.3%),” Felton added.
“Following two consecutive periods of decline, this quarter represents the first period-on-period uptick since the March 2019 quarter and the first period-on-period increase into a December quarter since 2013.
“Also, unlike previous years, the December 2019 quarter experienced a significant increase on the December 2018 quarter in the value of new lending for the broker community jumping $3.15bn or 6.45% from $48.773bn to $51.925 billion.”
Felton expects the string of upcoming changes scheduled to go into effect in 2020 to act as a positive stimulant rather than a hindrance for the broker channel.
“The positive indications within this quarter’s performance are of greater stability in the market going forward as the industry turns its focus towards the Best Interests Duty and other reforms from the royal commission, which we see as being supportive of further growth in broker market share into the future,” he said.