Real estate and broking network tackles NZ market

by Julia Corderoy17 Aug 2016
The Australian branch of global real estate network, Century 21, is expanding its home loans arm to include New Zealand.

Speaking to Australian Broker, the CEO of Home Loans at Century 21, James Green, said the company will officially unveil its New Zealand home loans arm at the Century 21 National Awards Convention in Auckland today.

Century 21 currently operates 20 real estate offices across New Zealand, and this announcement will see each of the 20 offices launch its own mortgage broking service.

“In the last 12 months, the conditions in New Zealand have overcome some of the challenges, and it has become far easier for brokers to dominate in the New Zealand market,” Green told Australian Broker.

“Up until recently, the banks have had some restrictions on mortgage brokers in [the New Zealand] market and these restrictions have come off. The banks have recognised the value the consumer gets in the home loan experience when they go to a broker… Now brokers are seen as an ally and banks are chasing that broking business and are looking increase their market share through brokers.”

According to Green, mortgage broker market share in New Zealand is currently sitting around 40-45%. In Australia, MFAA research says mortgage broker market share of new lending is 54%.

“Market share has grown a lot,” Green said. “It dropped to the mid-thirties only a couple of years ago, but it really has really bounced back due to the changes implemented by the banks in terms of how they treated brokers.”

In addition to greater potential to increase market share, Green said the New Zealand market is also conducive to mortgage brokers.

“A really interesting dynamic here in New Zealand that we are not seeing in Australia is the implementation of macro-prudential lending instruments being used by the Reserve Bank of New Zealand. 

“This gives non-bank lenders in New Zealand an opportunity or point of difference over their banking peers to market products to investors, for example, at 80% LVR when the banks are restricted to 60% LVR.”

“The by-product of this is that brokers can now support a wider range of lenders as a result of having to help customers obtain finance where a tier-one bank can’t,” he told Australian Broker.