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Broker market share slipped over the past quarter, which, according to the MFAA, coincided with an easing in credit policy conditions.
According to the latest data released by research group comparator (a CoreLogic business) and commissioned by the Mortgage & Finance Association of Australia (MFAA), the share of broker-originated loans approved in the three months to 30 September 2019 slipped to 54.9 per cent.
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When compared with the previous corresponding period, mortgage broker market share fell by 4.2 percentage points from 59.1 per cent in the September quarter of 2018.
Reflecting on the research, MFAA CEO Mike Felton said that while he’s disappointed with the result, it’s partly attributable to a shift in credit policy conditions.
According to Mr Felton, last year’s September quarter result came off the back of “unusually tight credit”, which coincided with a “higher-than-normal increase” in broker market share.
“During the past quarter, anecdotal evidence suggests that credit policy eased somewhat and that lenders were competing more aggressively through proprietary channels despite a continued trend away from the four majors,” Mr Felton said.
“This is evidenced by measures being adopted by lenders to attract borrowers, such as discounts and other incentives, which in many respects have been a reaction to the increased competition that brokers drive.”
Mr Felton stressed that despite the fall in broker market share over the September quarter, the broker value proposition “remains strong”, underpinned by “choice, experience and strong satisfaction levels”.
The MFAA CEO added that he expects broker market share to recover, particularly in response to regulatory reforms, which he said would deliver better outcomes for consumers.
“We are confident that the overall broker market share trend over time will maintain an upward trajectory and benefit from reforms currently being implemented that will further drive trust, confidence and recognition and particularly amongst those who are yet to use a mortgage broker,” Mr Felton concluded.
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