Following the news that the mortgage broker channel has claimed a record percentage of the home loan market share, the MFAA has forecasted that business will continue to pick up momentum – at an even faster rate.
The association expects broker market share will reach a figure as high as 75% over the next five years.
Research commissioned by the MFAA and published yesterday, revealed that brokers settled 59.7% of all residential home loans during the January to March 2019 quarter.
This figure is four percentage points higher than the corresponding period in 2018 and six percentage points higher than 2017, continuing the upward trend of growth in market share for broker-originated lending.
MFAA CEO, Mike Felton said, “The MFAA expects broker market share will increase to between 70% and 75% in the next five years.
“This will not only reflect improved trust and confidence in the channel resulting from changes to remuneration structures, disclosure, reporting, governance, education and professionalism but will also be due to ongoing market complexity and the experience and choice differential mortgage brokers have when compared to the proprietary channel.”
According to Felton, the fact that the record-setting data was collected during the release of the royal commission final report should communicate to policymakers how deeply consumers value the choice that mortgage brokers provide.
He added, “According to Deloitte Access Economics, brokers have an average 13.8 years of industry experience and access to an average of 34 lenders which is a very different value proposition to that available through the branch network.”
However, while market share increased, the overall value of lending through the broker channel fell to $40.85bn, down $5.25bn (11.39%) from the $46.096bn settled in the March 2018 quarter.
“Despite the decline in the value of residential lending volumes for this period, brokers have maintained their position as consumer champions,” said Felton.
“This result clearly shows that mortgage brokers have been able to remain focused on their clients despite all the noise surrounding the industry and continue to deliver unparalleled service and choice to Australian consumers.”