There are welcome signs that 2010 could be a bumper year for brokers as activity in the property market heats up.
It may be too early to call, but there’s plenty of reason to be bullish.
For starters, while the last couple of years have been challenging for brokers, they have not seen their overall market share drop. The broker market share stands at 40 per cent according to the 2009 Genworth Financial mortgage trends report.
Conditions are now much improved and there is good reason to believe that brokers will be able to increase their share of the volumes written each month.
What started as a surge in first home buyer activity in early 2009 has spread into the investor and refinancing sectors, backed also by a recovery in the re-sale market.
As well as solid consumer support for the broker channel, there are also strong indicators of improvement in most of the key property markets.
Melbourne has been tipped to deliver further growth this year, with BIS Shrapnel predicting prices will surge 8.2 per cent – the strongest growth of all capital cities.
There are also clear signs that the Sydney market will start to pick up pace with forecast growth of 6.8 per cent, followed by 5.2 per cent in Brisbane.
The current lull in interest rate rises and strengthening buyer demand will also encourage vendors who have sat out the last couple of years to put their properties on the market – stimulating the supply of existing dwellings.
While the number of dwellings approved in Australia rose 2.2 per cent last December, supply remains scarce due to a range of factors including an influx of highly skilled migrants.
There are other reasons for optimism.
There has been something of a revolution in mortgage lending as second tier and non-bank lenders prepare to reclaim territory from the majors.
While the GFC is still a major concern for funders, liquidity and indeed pricing has improved somewhat.
Even this small advance has been enough to prompt the smaller lenders to push back into some of the product areas the majors have withdrawn from, giving borrowers greater choice and enhancing competition.
Higher LVR loans have also crept back into the market place with Collins Securities, Future Financial and Australian First Mortgage among the mortgage managers recently announcing the launch of 95 per cent LVR products.
There is no doubt that there will be challenges ahead and the RBA’s approach to monetary policy may be pivotal to volumes as the year unfolds.
But as things stand, the positives far outweigh the negatives – and smart operators will be gearing up for a new phase of growth.
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