With both REA Group and Domain announcing moves into the mortgage broking industry, one broker and digital marketing expert has warned that dire change is approaching the industry.
“Make no mistake, the acquisition of Smartline
by Realestate.com.au, combined with Domain’s partnership with Lendi, are ‘game-changers’ for the broker industry,” said Darren Moffatt, CEO of digital marketing firm Wealthify and founder of reverse mortgage broker Seniors First.
“It will take a while to play out yet, but this has the potential to smash the flow of referrals to the wider industry.”
With these property portals able to take the borrower out of the market early on in the customer journey, this will crimp the volume of leads that would normally flow down to brokers from real estate agents, accountants and more, he said, especially since almost all property transactions start out on either Domain or Realestate.com.au.
“If the portals execute these integrations well, much of the existing home loan enquiry will stop at the top of the funnel when people are conducting initial property searches. Real estate agents and accountants will then get less opportunity to refer buyers to their broker referral partners,” Moffatt warned.
“And those agents who do get a home buyer or upgrader to refer to an external broker will no doubt be incentivised by the portals to ‘keep it in the family’ and send that borrower instead to the portal’s in-house broker division.”
This is a “classic” example of vertical integration, he said, which is based on big data and “platform power”.
How rapidly this change would take place depends on how quickly the property portals can implement these deals, Moffatt told Australian Broker
“My feeling is that the Domain one might happen faster than the REA Group one. Lendi has been very prominent on Domain for a while now, so I’d say that this one may well be closer to fruition. The REA Group one will take longer to roll out.”
He estimated it would take between six and 12 months before brokers start to feel the squeeze, adding that this would affect the purchase market rather than the refinance market.
“Brokers that are working heavily in first home buyers, the investor space or the property upgrader market – they’re the ones who are going to feel the brunt of it first.”
Independent brokers would be especially vulnerable because they did not have the infrastructure such as CRMs and managed databases more associated with branded brokerages, Moffatt said.
“That cohort are the ones who are going to feel this early. The larger groups with better systems are going to be better insulated.”
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