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Brokers have maintained a strong market share position, with the third-party channel settling over $350 billion in home loans.
The Mortgage & Finance Association of Australia (MFAA) has released the 16th edition of its Industry Intelligence Service Report, which revealed that mortgage brokers continue to hold strong market share, writing 69.6 per cent of all residential home loans in the March 2023 quarter.
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The IIS report, which pulls on data from 11 aggregation groups, covered the six-month period from 1 October 2022 to 31 March 2023.
According to the latest data, in the 12 months leading up to March 2023, mortgage brokers settled a record $358.68 billion in home loans. However, compared to the prior comparative period (October 2021 to March 2022), the total value of loans settled by mortgage brokers declined by 8.63 per cent in the six-month period. This decline coincided with 10 consecutive months of decreasing home values.
The total number of home loan applications lodged declined for the third consecutive six-month period, too. Over 343,000 home loan applications were lodged during the October 2022 – March 2023 period, a 13.12 per cent decline when compared year-on-year and a 10.20 per cent decline compared to the previous six-month period.
MFAA chief executive Anja Pannek noted that the period covered in the report coincided with a period of “intense refinancing” as fixed-rate mortgages transitioned to variable rates, clients encountered serviceability constraints and there was a moderation of property prices in some markets.
“This confluence of factors can be seen in this industry research, however the outstanding service mortgage brokers deliver to their clients has remained a constant throughout this time,” Ms Pannek said.
The report reinforced feedback from members on the impact of interest rate increases and record levels of refinancing on brokers and their clients.
Ms Pannek noted that the drop in settlements over the six-month period was the first period of decline since April-September 2019.
“It was not unexpected to see a decline in values settled due to property market conditions," she said.
"We looked deeper to understand how the broker channel was performing versus the total home loan market,” she explained.
“Our further analysis shows that whilst the value of home loans settled by brokers declined 8.63 per cent for the period, the lending market as a whole – broker and proprietary channels – declined 10.89 per cent over the same period.
“This highlights that the broker market is meeting more needs of more consumers in a challenging economic environment.”
The aggregate value of brokers’ home loan books grew by 6.84 per cent year-on-year, to $948.11 billion. The highest growth was observed in Tasmania (up 27.02 per cent year-on-year), followed by Victoria (10.69 per cent) and South Australia (8.71 per cent). The Northern Territory recorded a 5.99 per cent drop in the total loan book year-on-year.
Compared year-on-year, the average value of new home loans settled per broker decreased by $1,211,961 or 12.72 per cent. When compared to the previous six-month period the measure dropped $1,107,225 or 11.75 per cent.
At an individual mortgage broker level, the average number of applications lodged per broker (including inactive brokers) declined to 17.7 from 19.9 in the previous six-month period. Following five consecutive periods of an increase in the conversion rate of applications to settlement, the measure decreased by 1 percentage point year-on-year, and 4.1 percentage points period-on-period.
Broker numbers on the up, female broker numbers rising
The number of brokers remained above 19,000 for the second consecutive six-month period, totalling 19,456, marking a 4.69 per cent increase year on year.
After three consecutive periods of decline, the proportion of female brokers during this period increased to 26.9 per cent, up from 25.4 per cent as reported in the previous period.
Ms Pannek expressed her satisfaction with this increase as “pleasing to see”, but also acknowledged that progress appears to be slow.
“An industry that is welcoming and supportive of people from all walks of life is a goal we need to strive for and keep as a focus,” said Ms Pannek.
“At the MFAA we will continue to work with industry to implement strategies that drive an industry that is diverse, equitable and inclusive.”
[Related: Brokers see uptick in new refinancing clients: MFAA]
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