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Rising rates and the federal election have failed to dent broker optimism
Despite unsettled times in the shadow of impending legislation and the upward rate cycle, brokers remain upbeat about business growth over the coming quarter.
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According to The Adviser's latest quarterly sentiment survey, 42.1 per cent of brokers expect their business to grow over the coming quarter - up from 34.7 per cent last quarter.
This increase in broker confidence is mirrored by an expected growth in loan volumes. 41.4 per cent of brokers expect loan volumes to increase over the coming quarter, up 11.9 per cent from last quarter.
Just 18.1 per cent of brokers expect to see a drop in loan volumes between now and the end of the year. This is down from 32.5 per cent in the last quarter.
It seems that the three rate rises earlier this year have done little to dampen broker confidence, which remains strong.
Despite the fact that the majority of brokers feel the federal government has done a poor job of managing the Australian economy, most feel further rate hikes will not affect their business.
When asked what impact the current RBA interest rate would have on demand for home loans over the coming quarter, just 35.2 per cent of respondents said negative - a significant drop from last quarter when almost 80 per cent of brokers thought rising rates would impact negatively on potential home buyers.
Summarising respondent findings on economic issues, it is clear that overall sentiment towards the economy is improving, despite the current rising rate environment.
Almost two thirds of respondents believe the RBA is doing a good job of controlling inflation through its management of monetary policy and tightening tactics.
The positive sentiment towards the economy firmly translates to broker business confidence, as more respondents indicated that they would increase the money they spend on marketing their business - suggesting business is good and could improve over the coming quarter.
In terms of market prospects for brokers, first home buyers have officially stepped off following the wind back of the federal government incentives at the end of 2009.
Despite the ease in first home buyer activity, investor and refinancers are filling the gap.
In the quarter ahead, the refinancing and investor sector will be most active, registering 43.6 per cent and 35.8 respectively. These figures are fairly consistent with Q2's findings.
