Brokers remain confident that diversification strategies will mitigate the impact of a potential residential property down turn.
Earlier this week John Edwards, chief executive of Residex, said that the current slowdown in property markets could become a “one-in-a-hundred year slump”.
Chris Burns, group managing director of Money Advisers, a South Australian-based brokerage, said home loan volumes had certainly dropped off.
“I’m definitely concerned about the state of the property market,” he said.
According to Mr Burns, the top end of the market – the million dollars plus bracket – remained strong particularly. It was the smaller loans of around $250,000-300,000 that had really slowed.
He was confident however that any slowdown in residential markets would not impact brokers with a diversified product offering.
“Residential mortgage brokers still have a strong future ahead of them, they just need to turn the switch a little and become providers of wider financial service solutions,” he said.
Maroubra-based Auspak broker Mark Melick believes brokers that don’t diversify will struggle to maintain revenue.
“Gone are the days of just writing home loans,” Mr Melick said.
Mr Melick now offers his clients a broad range of products including income protection insurance and commercial loans. He also has a referral arrangement with a financial planner.
“There is still a future in residential loans,” he said, “but brokers must recognise the lending landscape is changing – and will continue to change.”
Despite the bleak outlook presented by Residex, not all analysts are as pessimistic.
Cameron Kusher, research analyst from RP Data, said he didn’t expect a major drop in national house prices as forecast by others.
“I think we’ll see a sluggish market at least until the end of the year or until rates come down, but I don’t think we’ll see any major crash in national house prices,” he said.
Mr Kusher also pointed out that there would always be demand for property in the long term.
“In the long term, property will always be a stable investment,” he said.
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