'Typical' mortgage customer set to change

by John Maguire18 Apr 2016
Forward indicators and unprecedented market circumstances are having a profound effect on what the typical mortgage buyer will look like in the future, according to the latest commentary from Blake Buchanan, general manager of aggregation at mortgage brokers eChoice.

Australia’s ageing population, interest rates at historic lows, inflated property markets in major cities and regulatory intervention are all increasingly influential factors in determining buyer behaviour – and demographic.

Buchanan said, “Traditional market segments in relation to first homebuyers, owner-occupiers and investors may not remain as relevant as they are today, as we see cashed up and equity-laden baby-boomers decide their future.

"Whether they downsize or look to acquire aspirational property as their next, or possible last purchase, that particular customer segment will more than likely open up possibilities for brokers to play a greater part in guidance and facilitation."

The rising popularity of reverse mortgages, along with the development of aged care loans, could mark a trend in products tailored for each life stage as the general population gets older. This, plus the rise in ethnic markets, is set to herald significant cultural changes in the mortgage industry, demanding that brokers brace themselves for changes ahead.

“Forward-thinking business support programs will become a critical component in preparing brokers to engage with and service those new and emerging customer segments,” said Buchanan.

When asked by Australian Broker if the mortgage industry's emphasis on an ageing population could have a detrimental effect on Generation X and Y, Buchanan said, "Brokers have always focussed on the specific needs of a broad range of customer segments, which is one of the prime reasons for their increasing popularity as the preferred choice to provide finance solutions for consumers. As Generation X and Y are longer-term mortgage holders, they will remain a critical segment of the market and will be equally nurtured by brokers as their needs and circumstances continue to change."

He added that as brokers adjust and evolve to meet the changing climate, technology will be at the forefront of their innovation.

"Most important of all is to embrace technology. Brokers who have access to a full-service proposition for borrowers through their aggregator programs and platforms will be in the box-seat to service any customer in the future. This will allow them to develop sustainable businesses that can adapt in a continually dynamically changing mortgage environment."