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Australia’s biggest lenders and mortgage groups believe broker market share could hit between 51 and 60 per cent in three years’ time, according to a major report.
Deloitte’s Australian Mortgage Report 2015, now in its tenth year, asked eight mortgage market leaders what proportion of mortgage settlements brokers will represent in three years.
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Six out of eight said broker market share would grow to between 51 and 60 per cent, with only two predicting market share to fall to between 41 and 50 per cent.
Deloitte partner James Hickey remarked that with three-quarters of respondents anticipating strong growth in the next few years, industry leaders have given the third-party channel a “vote of confidence”.
Broker market share is currently hovering around the 50 per cent mark, but the nation’s biggest lenders and broker groups agree that digital disruption is a serious threat.
CBA’s James Sheffield said we are potentially seeing the high tide of ‘physical-only’ distribution.
“I think digital is going to impact all of our businesses more dramatically than our generation understands,” he said.
AFG executive director Malcolm Watkins feels that broker market share will remain at 50 per cent for the next three years.
“I think there’s a really strong case to say we will be,” he said.
“Our business is around the three Cs – choice, convenience and cost. If you can do low cost and you can potentially do convenience through your omni-channel, you’re still not offering choice.
“I think that is a component that most people like. They can make that choice on the web but they still haven’t made the decision to walk in and buy.
“They need someone to run them through the choices," Mr Watkins said. "That’s what will hold brokers in position for a good time.”
Pepper’s Mario Rehayem said lenders must help brokers evolve into the digital world.
“It will be a good idea for the right lenders to always make sure they do evolve in the digital world, but at the same time assist the broker channel evolution into the digital world as well,” he said.
Macquarie Bank executive director Frank Ganis said lenders should not take broker growth for granted.
“If as a business or industry we don’t stay focused and continue to improve our products, digital and our online capability, relationships will be difficult to sustain,” he said.
“When I answer this question, I go beyond the broker to the intermediary, because it’s not just mortgage brokers who are distributing and accessing new borrowers.
“Suffice to say, brokers will continue to play a very important part in this industry.”
[Related: Brokers lose share of mortgage market]
