The MFAA has released the ninth edition of its Industry Intelligence Service Report (IIS), drawing on data from 13 aggregator brands to provide insight on broker and industry performance for the six-month period of 1 April 2019 to 30 September 2019.
While a time marked by continued severe credit tightening and the royal commission, MFAA CEO Mike Felton highlighted that the second half of the period reflected an improvement in buyer sentiment and market conditions.
“During the July to September 2019 quarter, mortgage brokers continued to facilitate more than half of all new residential mortgages at 54.9%,” said Felton.
“While this figure represented a decline of 4.2 percentage points year-on-year, it partly reflected a correction in broker market share from the 2018 September quarter, when unusually tight credit corresponded with a higher-than-normal increase in broker market share.”
The report also revealed that the broker population contracted for the second consecutive period to 16,598, down from the peak of 17,040 participants in the September 2018 period.
The MFAA noted the reduction coincides with a period of increased industry scrutiny, which resulted in an “apparent trimming down of less productive brokers”.
The national broker residential loan book grew by a further 5.9% year on year. While trail commission has continued its growth trajectory, up-front payments fell, resulting in a year-on-year remuneration per broker decline to $131,402.
However, the “systemic importance of the broker channel” was spotlighted as the share of broker-originated lending settled by the big four banks dropped to a record low of 42.8% over the quarter. Non-majors recorded a record-high market share of 38.5%, indicating that the broker channel continues to deliver choice and drive competition.
“Overall, compared to previous periods, it has been a challenging time for the mortgage broking industry,” said Felton.
“The current environment presents many challenges and uncertainties for the economy and our industry, and will clearly impact overall market volume. The broker value proposition, however, remains more compelling than ever and I am confident that our industry is well placed to capitalise on future periods of growth once we have managed to navigate the current COVID-19 event.”