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Brokers aggregating under the group wrote a record $92 billion of loans in 2021, with the largest proportion lodged in the final quarter.
ASX-listed aggregator Australian Finance Group (AFG) has released its most recent AFG Index, showing that its brokers lodged a record amount of loans in the 2021 calendar year.
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According to the figures, brokers lodged approximately $92 billion of loans to lenders through more than 153,000 applications in 2021.
Brokers finished the 2021 calendar year on a high, with record quarterly volumes of $24.6 billion in the three months to December 2021. This was up from the previous quarterly record of $24.1 billion, which was set the quarter before.
The average loan size lodged by AFG brokers also rose substantially in the final quarter of the year, with the December quarter seeing the average loan size reach new highs of $624,077.
The average loan-to-value ratio (LVR) dropped to 68.7 per cent.
Residential lodgement volumes across the final three months of 2021 increased in Victoria, Queensland, South Australia, and Western Australia, while volumes in NSW dropped marginally during the quarter.
The Northern Territory saw the largest drop in loan volumes in the final quarter of the year, falling by nearly $9 million to $46.6 million.
Majors continue to lose market share
When compared to the same quarter the year prior, residential lodgements were up 24 per cent in the December quarter 2021. However, unlike the year prior, first home buyer activity accounted for the smallest proportion of business - at just 13 per cent (compared to 22 per cent in the same quarter in 2020).
Investor loans were up from 21 per cent in the same period in 2020 to 26 per cent in 2021.
Borrowers who were ‘upgrading’ the type of property they owned made up the bulk of lodgements (43 per cent). Interestingly, the AFG figures showed that the major banks continue to lose the market share of ‘upgraders’ with a record low proportion of loans lodged to the big four banks in the December quarter, at 54.5 per cent.
The proportion of refinance applications being sent to the major banks also sunk to near record-lows in the final quarter of the year, taking less than half (47.3 per cent) of refinance lodgements from AFG brokers. This figure was nearly 10 percentage points higher in the same period in 2020.
Noting the figures, AFG CEO David Bailey applauded AFG brokers for having “navigated the challenges presented by the latest wave of disruption caused by the pandemic to help their customers secure new homes, upgrade their existing homes or take up opportunities to save by refinancing their existing home loans”.
“In a sign of a healthy level of competition, the country’s non-major lenders’ market share is up to 46.5 per cent,” he said, noting that this cohort’s largest market share from AFG brokers was recorded in Q2 FY20 when they reached 46.9 per cent.
“Conversely, the big four banks and their associated brands were down from 57.31 per cent last quarter to 53.55 per cent, their second lowest market share recorded in the past 10 years.”
ANZ and the CBA group registered the biggest drops, of 2.02 per cent and 3.36 per cent respectively.
The Westpac Group’s market share lifted from 15 per cent to 15.48 per cent, driven by their subsidiary brands, Bank of Melbourne, Bank SA and St George, while Westpac dropped 8.36 per cent to 7.95 per cent for the quarter.
NAB was up from 10.69 per cent to 11.83 per cent.
“Increases amongst the non-majors were evenly shared however Beyond Bank doubled from 0.23 per cent to 0.45 per cent, ING went from 3.28 per cent to 3.92 per cent and Macquarie jumped from 9.17 per cent to 10.49 per cent,” Mr Bailey noted.
Lender turnaround times for full approval stabilised at 21.8 days for the past two quarters, according to the AFG data.
The CEO also flagged that the popularity of fixed rate products dropped in the final quarter of the year, falling from 38.2 per cent in the September quarter to 34 per cent in the December quarter.
He concluded: “With brokers now writing two-thirds of all home loans in Australia these results clearly demonstrate the value of the channel to homebuyers.
“By driving competition between lenders and providing a vital distribution network for lenders without branches, brokers deliver options for consumers. And consumers clearly value that choice.”
[Related: Turnarounds improve despite record loan volumes: AFG]
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