Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Broker numbers ‘may be reaching saturation point’

crowd crowd
Reporter 7 minute read

There is a “disconnect” between growth in the number of brokers in the market and the amount of new loans being written, which could suggest that “broker capacity may be reaching saturation”, according to a new MFAA report.

Designed to create insights into the operations of brokers and provide benchmarking statistics for brokers, the third instalment of the Mortgage & Finance Association of Australia (MFAA) Industry Intelligence Service (IIS) asked 14 aggregators (including AFG, Aussie, and Connective) to provide the association with data on their brokers (which collectively make up more than 95 per cent of the Australian broker market). 

According to the data compiled by CoreLogic’s comparator business, in the six-month period 1 April 2016 to 30 September 2016, the leading aggregators had 15,434 brokers under their banners. This reflected a 6.4 per cent growth rate for the number of brokers in the half year (compared to the previous six-month period). 

Number of loans settled fell 0.5 per cent


However, the MFAA highlighted that there was a “disconnect” in the figures, seeing as there was a 0.5 per cent drop in the number of new loans being written in the period. 

The IIS report found that, while the value of new and refinanced home loans settled by brokers increased by 1.1 per cent to $92.97 billion over the six months to 30 September, there were fewer loans actually being written. 

In fact, the report noted “evidence of a tapering in the home loan market”, as 256,082 new home loans were settled in the period, a drop of 0.5 per cent on a like-for-like basis on the March 2016 half year results. 

However, the researchers argued that the growth picture was an “uneven one”, with the value of new lending by brokers falling by 4 per cent in NSW to $37.5 billion and 2 per cent in the Northern Territory, while it increased by a massive 17.9 per cent in Tasmania (but the MFAA noted that lending volumes there were “commensurately small given the state’s population). 

Only in Queensland, Western Australia and South Australia did growth rates in new lending exceed the states’ growth rates in the populations of brokers. 


Surprisingly, the research found that 18 per cent (or 1,841 brokers) did not settle a home loan in the six-month period, which the MFAA concluded could mean that “there is a material proportion of the industry that are either passive, dormant or under-performing”. 

In addition, a further 17 per cent of the broker population settled less than $2 million of new home loans during the half year. 

The MFAA posited that a “likely component of this segment” would be new-to-industry brokers.   

Further, while application activity for home loans grew strongly at 9 per cent in the period, compared to the previous six months, the conversion rate of applications to settlements fell from 80 per cent to 71 per cent.

“It is not inconsistent to conclude that combined effects of more promotions by lenders, a low point in the interest rate cycle, more conservative lending policies, and intense competition amongst brokers themselves may have contributed to an uptick in the volume of applications, but commensurately a softening in the conversion rate,” the report reads.

“In summary, the six-monthly growth rate nationally of 1.1 per cent for broker originated home loans cannot be construed as a strong one, and the traditional growth engine for brokers appears to have stalled,” it adds.

Speaking of the findings, MFAA CEO Mike Felton warned that trends from the report show that broker numbers may be “reaching saturation”, with additional numbers operating in a market with softening demand.

Most aggregators were found to have been recruiting “aggressively”, with 2,180 brokers recruited by 13 aggregator groups during the six-month period.

The MFAA warned: “The growth in the numbers of brokers deployed nationally exceeded the growth rate in new lending (value) materially…

“This conclusion is arguably most conspicuous in NSW where a disconnect between the growth in brokers and the softening market environment is most obvious, implying that many brokers are competing for a restricted pool of new home loan business.”

In NSW/ACT, broker numbers grew by 5.5 per cent, while the value of new loans fell by 4 per cent. This was the only state to see such a correlation.

Victoria and Tasmania also saw broker numbers outpace the growth in value of new loans settled (with the island state seeing a whopping 25.1 per cent increase in broker numbers, and a 17.9 per cent increase in the value of new loans settled), while the remaining states saw the growth in the value of new loans settled overtake the growth in broker numbers. 

More women being hired

In terms of gender breakdown, the MFAA report found that more women are working as mortgage brokers, making up 28 per cent of the broker workforce.

Further, the growth rate for female brokers outpaced that for men – with an 8.7 per cent growth rate, compared to 5.7 per cent for male brokers (based on a sample of around 13,000 brokers), “implying that women are entering the industry, or are remaining in the industry at stronger rates than men”.

In all, women accounted for 32 per cent of new hires in the six-month period.

The report noted that the fact the proportion of new female recruits was “materially higher than their proportion of the total population of brokers at the end of the period” backs the conclusion made in the March edition of the IIS that “more women are entering the industry, and/or conversely fewer women are leaving the sector”.

In terms of business composition, the report found that 53 per cent of broker businesses were sole operators or two broker offices, whilst just over 21 per cent had 11 brokers or more in their offices. 

[Related: Average broker home loan portfolio is $38m, finds MFAA]

Broker numbers ‘may be reaching saturation point’
TheAdviser logo

If you’re feeling overworked and overwhelmed in this fast-paced mortgage market, it’s time to make some changes, and the Business Accelerator Program can help! Work smarter, not harder, in 2022 and beyond, visit the website here to secure your ticket.



more from the adviser
Beau Bertoli Greg Moshal 863x385jpg

Breaking News

Prospa squares up against banks, expands SME loan

The ASX-listed lender has flagged a new “all-in-one” business...

small business owner ta

Breaking News

Business credit demand bounces back in NSW

Data from the initial days of NSW reopening after lockdown has sh...


Breaking News

Hot Property: The biggest property headlines from the week 18-22 October

The weekly round-up of the biggest news stories from across Momen...