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Brokers under the major aggregator settled a record $75 billion in home loans last year, up 44 per cent, the group has revealed.
Aggregation group Connective has revealed that its brokers lodged $110.06 billion in residential home loan applications in the calendar year 2021, the first time the group has surpassed the $100 billion mark in a calendar year.
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Over 2021, Connective brokers settled a total of $74.9 billion home loans, also a new record.
The settlement figures mark a 44 per cent increase on the prior year.
The month of December 2021 saw activity particularly strong, with Connective brokers settling $8.96 billion in resi loans, compared to $5.80 billion in December 2020 (up 55 per cent).
Reflecting the overall trends in the property market, NSW maintained the highest value in residential settlements at $35.3 billion – a 66 per cent increase on the prior year.
However, the largest residential settlement growth for Connective brokers was in Queensland, with settlements for loans in this state up 81 per cent to $12.2 billion.
Speaking to The Adviser about the figures, Connective chief executive Glenn Lees and executive director Mark Haron said that the growth had been fuelled by a combination of the fact the group had welcomed more members over the year, a growing consumer preference to use the broker channel amid an increasingly broad and changing credit environment, and an upgraded CRM technology enabling broker members to be more productive.
Mr Haron commented that the group had seen membership growth over the year due to both new members joining the group, as well as existing broker members hiring more staff to help keep up with demand.
“One of the things we try to do as an aggregator is enable them to grow their business more efficiently and effectively. So there’s that natural growth, the organic growth of existing members, and certainly attracting brokers to us,” Mr Haron said.
“A lot of these brokers were growing and looking for better, more efficient, ways to run their business. They’re turning to us as the aggregator of choice to do that. A lot of that driven by our technology.”
Mr Lees added: “It’s an extraordinary time of demand for brokers, and we believe our software, Mercury Nexus, has been instrumental in helping brokers achieve these records. Our members have been able to capitalise on mortgage demand and strengthen their business with our support.
“I think the growth we’ve seen in the last year has also been driven by the same thing that has driven growth every year: consumer recognition of the value that brokers bring to their finance journey.”
Commercial and asset finance growth
As well as record residential numbers, the group also reported record commercial and asset finance volumes.
Brokers writing commercial loans achieved $7.40 billion in total settlements for 2021, up 83 per cent year-on-year. December 2021 was the strongest performing month for Connective’s commercial brokers, achieving $904 million in settlements, up 93 per cent on December 2020.
Western Australia achieved the strongest growth in commercial borrowing with 107 per cent growth in settlements year-on-year.
Similarly, the asset finance arm of the business saw strong growth, with more than 1,000 Connective asset finance brokers (20 per cent more than in 2020) settling $2.51 billion for the calendar year – a rise of 49 per cent year-on-year.
Westpac maintained the highest ranking lender for asset finance settlements by Connective brokers in 2021.
Brent Starrenburg, head of Connective Asset Finance, told The Adviser: “We actually went from just shy of $1.7 billion to $2.5 billion in settlements last year, so it’s been a significant growth trajectory.”
He suggested that this had been driven by the fact that more brokers were concentrating on asset finance (whether exclusively or by diversifying their offering); there was a larger choice of lenders on the AF panel providing more solutions; there were more government support mechanisms in place over the year (such as the instant asset write-off and SME grants); and because “in general, the landscape has been quite strong” (particularly for leisure goods and cars).
“There’s all sorts of projects going on, which all needs equipment and all needs equipment to be funded. Our brokers have got the finger on the pulse and are actually out there supporting those businesses and actually getting that equipment and those vehicles funded and in use,” Mr Starrenburg said.
Mr Lees concluded by noting that, overall, brokers operating under the aggregation group settled a total of $85 billion.
“The numbers say it all – Connective brokers are flying. 2021 was a big year, and a great one for brokers who were agile in leveraging opportunities the market presented. We’re optimistic that 2022 will bring more success for our brokers – they’ve already started this year off with a bang, lodging $5.9 billion in applications in January,” he said.
The CEO added that the Connective team had grown by almost 15 per cent last year to continue supporting brokers – particularly in the scenarios, compliance and technology teams.
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