How mortgage brokers can connect with millennial investors

Only 11% of millennials used a broker in last year, says report

How mortgage brokers can connect with millennial investors


By Ryan Johnson

While mortgage brokers control three quarters of the home loan market, there is a significant demographic that are slipping through the cracks – millennials.

Recent data from the Commonwealth Bank shows that millennials are now leading the charge when it comes to property investment, with 46% of CBA’s new investors in 2023 falling into this age bracket.

But despite their activity in the market, only 11% of millennials have engaged with a mortgage broker or a financial adviser over the past year, according to a recent study from Great Southern Bank.

Consequently, there’s a big opportunity for brokers to close this gap by tailoring their services to better meet millennials’ distinct needs and preferences, according to mortgage broker Alex Veljancevski (pictured above), director of Eventus Financial.

Embrace their digital world

Nationally, the average age of property investors was 43 years, and the average loan size was just over $500,000, according to the CommBank study. However, as time goes on, those born between 1981 and 1996 are increasingly becoming the leaders of new lending.

However, Great Southern Bank’s No Place like Home report, which surveyed 2,000 Australians about their financial knowledge in April, found some concerning trends. 

Among millennials, only one in three are seeking out professional financial advice, whether it be an accountant (19%), their current bank (16%), a financial adviser (11%) or a mortgage broker (11%) within the past year.

Concerningly, the research found that Australians were most likely to rely on their family and friends for wise words about money.

For brokers, this presents a challenge: How can they reach this growing group of homeowners?

Veljancevski said millennials have grown up in a digital-first environment, so their expectations for online interactions are high.

“So as mortgage brokers, it's critical that we not only maintain an active online presence but also ensure that this presence is engaging and user-friendly,” said Veljancevaski. “Our websites and applications need to be slick, intuitive and mobile-optimised because that's where millennials are most likely to engage with us.”

Social media platforms such as Instagram and YouTube are also invaluable tools for connecting with this demographic.

“By using these platforms effectively – by sharing visually, engaging content – we can increase our visibility and appeal directly to their sensibilities.”

Provide the right educational tools

Many millennials might be enthusiastic about property investment but may not have a deep understanding of the financial complexities involved.

In the No Place Like Home report, millennials and Gen Z participants acknowledged they had more to learn around managing money, rating their financial knowledge an average of 6.1 and 6.5 respectively (out of 10). The most financially knowledgeable age group, baby boomers, rated themselves an average of 7.0.

“As brokers, we can bridge this knowledge gap by offering straightforward, accessible resources that explain critical aspects of property investment, whether that’s understanding rental yields, property taxes, maintenance costs or the nuances behind negative gearing,” Veljancevski said. 

“By demystifying these areas, we educate and make these concepts relatable while building trust. This, in turn, helps position us as reliable partners in their investment journey.”

Create a community

Faced with increasing house prices and higher interest rates, the Great Southern Bank research also showed younger generations were often seeing home ownership as a race to the finish line. In fact, 30% of millennials admitted to buying a property due to a “fear of missing out”.

To counter FOMO, Veljancesvki said another effective way to engage millennial investors is to create a sense of community by hosting workshops and webinars tailored specifically for them.

“These sessions can cover topics relevant to their investment goals and challenges providing a mix of education and peer interaction,” Vejancevski said.

“Such events allow millennials to connect with fellow investors, with the community aspect helping to make the financial journey less daunting and more accessible.”

Promote sustainable and ethical investing

Many millennials care deeply about the impact of their investment choices.

“Highlighting green mortgages or lenders known for their social responsibility can set your brokerage apart as one that matches their values and concerns.”

Overall, by understanding millennials' preference for digital communication, educational resources, and a sense of community, mortgage brokers can bridge the gap and secure their business.

“We brokers need to understand this growing segment of the market and develop ways to better connect with them.”

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