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Rising rates and increasing house prices are impacting borrowings, according to a new survey, with more than a third of brokers stating lodgement activity declined in August.
Analysis of the latest Broker Pulse survey by research arm Agile Market Intelligence has revealed that a third of all broker respondents believe their lodgement numbers fell in August 2023 compared to the month before.
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The survey of 267 brokers, conducted between 1 and 15 September 2023, asked respondents how their lodgement activity had changed between July and August this year.
More than a third (34 per cent) said their pre-approval lodgements declined in August compared to the previous month.
Similarly, 33 per cent said their refinance lodgements fell month on month, according to the survey.
Consequently, the pre-approval lodgement index fell to -7.1, while the refinance index fell to -3.4
First home buyer applications trend lower
Brokers were also asked how many applications they submitted in August for different borrower types.
New loan applications remained stable month on month, according to the survey, with 31 per cent seeing a dip in lodgements and 30 per cent reporting a rise (the index fell to -1.9).
As first home buyers (FHB) bear the brunt of affordability and loan serviceability challenges amid higher interest rates, 37 per cent of brokers said they submitted fewer applications for this segment in August compared to July.
A similar proportion of brokers (40 per cent) reported submitting fewer investor applications (indices across both borrower types slumped to -14.2).
Conversely, 32 per cent of brokers said they submitted more owner-occupied applications in August compared to July, while less than a quarter (23 per cent) said they submitted fewer applications.
Satisfaction with lenders stable
The Broker Pulse survey of 283 brokers also found that lender sentiment was high.
Overall, 63 per cent were satisfied with lenders in August (down from 65 per cent in July) – with a record high of 83 per cent of brokers satisfied with non-bank lenders in August (up from 77 per cent in July).
Macquarie Bank topped the broker experience ratings list, with 92 per cent satisfied with it over June, July, and August 2023, while St.George placed last with only 52 per cent satisfied with it.
ANZ was the most used lender in August (43 per cent of brokers reported using the major bank), while Macquarie ranked second (38 per cent).
The results come amid renewed optimism in the housing market, with recent Hotspotting Price Predictor Index (PPI) for spring 2023 revealing that seven out of 10 locations across Australia are experiencing positive sales activity and, as such, house prices are expected to continue to rise.
Mortgage Advice Bureau (MAB) Sydney broker Mark Kevin suggested to The Adviser earlier this month that buyer confidence will return amid the spring selling season, particularly as the Reserve Bank of Australia (RBA) has held rates at 4.1 per cent for the third consecutive month.
He added that while affordability and loan servicing challenges remain (particularly for FHB), those with secure incomes are increasingly accepting the current environment as the “new normal”.
To participate in next month’s Broker Pulse survey or for more information, click here.
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