Brokers lodged 17 per cent fewer loans between April and September last year, but the value of home loans settled has remained high, MFAA data has shown.
The findings come in the MFAA’s most recent Industry Intelligence Service (IIS) Report, compiled by CoreLogic business Comparator, covering the six-month period to September 2018.
Drawing on data from 13 aggregators (AFG, Aussie, Choice Aggregation, Connective, FAST, Finsure, LoanKit, Loan Market, Mortgage Choice, National Mortgage Brokers, PLAN Australia, Smartline and Vow Financial), the data shows that the total number of home loans lodged by brokers fell by 17.3 per cent, from 303,058 in April-September 2017 to 248,830 over April-September 2018.
This was also markedly down on the prior six-month period (October 2017 to March 2018), when brokers lodged 300,828 loans.
In fact, the IIS 7 Report showed that some states are seeing increases in lodgements, while others are writing less.
NSW/ACT and Western Australia contributed most to the national decline in number of applications when comparing the like-for-like totals of April-to-September 2017 to 2018 – with the eastern state brokers writing 4,266 fewer applications (down 5.1 per cent to 79,578), while their western counterparts wrote 1,088 fewer applications (down 4.5 per cent to 23,395).
Victorian brokers lodged the most loans (84,587), maintaining their lead over NSW/ACT and increasing their applications by 0.3 per cent on the prior year. However, Tasmanian brokers improved the most over the period, increasing their application by 916 loans, or 32 per cent more than the previous year.
Meanwhile, the number of loans Queensland brokers wrote remained relatively flat year-on-year with a fall of 418 home loan applications, down 0.9 per cent, while South Australian brokers wrote 328 fewer mortgages or 1.6 per cent less.
Like the drop in lodgements, the average value of new home loans settled per broker continued to decline, the IIS 7 Report showed.
On a national level, the number of applications settled per broker fell, from 19 down to 18, when compared to the previous six-month period.
Year-on-year, from April-to-September 2017 to April-to-September 2018, the average value of new home loans settled per broker dropped by $154,435 or -2.62 per cent.
Brokers in WA settled 3.22 per cent less in the six-month period to September 2018, Qld broker saw the value of new settled loans drop by 2 per cent, while SA’s average settled value was down by 6.38 per cent compared to a year ago (but up 1.37 per cent on the previous six-month period).
Victorian brokers were leading the charge in this data set as well – and, for the first time since the IIS Report began measuring the average value of home loans settled per mortgage broker, surpassed the NSW/ACT market for the first time.
Year-on-year, the average value settled by Victorian brokers increased by $338,267 or 5.65 per cent from $5.99 million, whilst NSW and ACT’s value declined by 8.11 per cent or $552,228 from $6.81 million, in line with the states’ overall trend.
In fact, the report showed, the average value of home loans settled per mortgage broker in NSW/ACT has been in decline since September 2015, despite growing house prices.
Year-on-year, Tasmania’s average settled values increased by 10 per cent or $505,645, meaning the brokers in this state are now settling more than those in SA.
The Northern Territory brokers saw settlements rise by 23.76 per cent year-on-year but starting off a low base.
Comparator noted: “One reason for the falling average value of home loans settled for the states may be the consistently increasing population of brokers creating greater competition...
“With the average value of new home loans settled continuing to decline, though now at a slower rate, coupled with the overall increase in the value of loan books, a possible action mortgage brokers might like to consider to ensure the sustainability of their businesses would be to place greater emphasis and care on managing and servicing of their existing client base,” the report authors suggested.
Despite the drop in per broker value, the value of mortgages settled by brokers totalled $97.9 billion in the six months to September 2018, up 0.3 per cent on the previous period, or just 0.2 per cent less than between April-September 2017.
Annie Kane is the editor of The Adviser, Australia’s leading source of news, opinion and strategy for mortgage brokers.
As well as writing news and features on the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker podcast and In Focus podcasts and The Adviser Live webcasts.
Before joining Momentum Media in 2016, Annie wrote for a range of business and consumer titles, including The Guardian (Australia), BBC Music Magazine, Elle (Australia), BBC Countryfile, BBC Homes & Antiques, and Resource magazine.
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