The storm clouds of the global financial crisis appear to be lifting, giving brokers some solace that, perhaps at last, brighter times are ahead.
All the signs suggest that the Australian economy is back on track. In August the Reserve Bank of Australia (RBA) revised its forecast of one per cent contraction in GDP to 0.5 per cent growth by end December, rising to one per cent in the year to June 2010. Positive news indeed.
Underscoring this forecast is renewed consumer and business confidence. In August the Westpac-Melbourne Institute Index climbed to 113.4 points – its highest level in nearly two years – and also registered its sharpest ever three-month jump since its inception in 1975.
Renewed business and consumer confidence is of course the first step in a housing market recovery and here, green shoots are already sprouting.
First home buyers largely propped up home lending volumes in the first half of the year but there are now clear signs that investors have started to return to the market, this in turn will help to stimulate activity across other segments.
According to the Australian Bureau of Statistics (ABS), the number of loans to owner occupiers rose for the eighth straight month in June, by 1.1 per cent in seasonally adjusted terms. This highlights the gradual but steady recovery that is now underway.
And the timing could not be better.
Over the last 18 months the broking industry has arguably endured the most challenging period in its relatively short history – not just because of harsh market conditions but also as a result of the significant changes that have taken place in the lending landscape.
Having to meet minimum volume quotas will pose a challenge for many brokers. But in many respects, it is more of a challenge for the aggregation industry.
The banks are still firmly backing the aggregation groups but without a guaranteed panel of lenders to offer brokers, aggregators are realising that they must adapt to the new environment if they are to continue to deliver value to their members.
Most aggregation groups are already expanding their core offering beyond simply providing a lender panel, with sales and marketing support, technology, diversified product offerings and lead generation now part of the mix.
But while the going has admittedly been tough, now is the time for the tough to get going. Strength is born of adversity and now is a never-before chance for the broking industry to rise to the challenge of building a sustainable future.
Rather than reflecting on the past, it’s time to seize the opportunities this market presents and focus on building for the long haul.
Publisher, Mortgage Business
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