The third-party channel’s share of the Australian home loan market has fallen back to its lowest level since December 2015.
Mortgage brokers originated 51.9 per cent of new residential home loans during the December quarter, according to research group ‘comparator’, a CoreLogic business.
The data, which was sourced from 19 broker groups and aggregators, revealed that this figure was slightly down from the 53.6 per cent settled in the September 2016 quarter and matches the figure from the same quarter in December 2015 (51.8 per cent).
These results come after Adelaide Bank general manager of third party Damian Percy predicted last month that brokers could soon be writing 70 per cent of Australian home loans.
Mr Percy said at the time that mortgage brokers are “the original disruptors” who should feel empowered, rather than threatened, by the emergence of new online players.
“What brokers deliver in terms of advice, taking the grief away from borrowers, [is a] friend to help you through the process, that key part of the proposition, which is what broking is all about, and I think [that] will continue to be required by consumers,” he told The Adviser last month.
“The fact that it is made more interesting by technology will just mean brokers become more productive and if anything, are going to get more market share rather than less.”
Similarly, award-winning broker George Samios of MADD Home Loans predicted last September that brokers' market share would surge to approximately 63 per cent.
MFAA CEO Mike Felton explained that the softening in brokers’ market share is a “seasonal trend” experienced since 2014.
“[It] does not reflect any change in brokers’ customer satisfaction,” he elaborated. “The past three December quarters have shown an adjustment in share followed by a rise in subsequent quarters.”
“The market share results for the end quarter of 2016 is just slightly ahead of the comparative figure for 2015, showing that consumers still support the broker position with the majority of residential lending,” he added.
Despite the decline in market share, the data showed that finance brokers originated at least $50.19 billion in new home loans during the December 2016 quarter, which is the first time that broker-originated lending has exceeded $50 billion in a quarter. Additionally, the 2016 annual result is $188.5 billion, the highest value since the data has been collected.
According to Mr Felton, brokers have an “established” role in the investor side of the market, a segment of borrowers that has been impacted with recent changes in lending restrictions.
He pointed out that ABS data also shows a “flattening” of the housing market, with an overall 0.5 per cent decrease in the number of settlements and a 1.1 per cent increase in value of settlements for the six months ended September 2016.
“The December quarter result, however, still reflects solid consumer support for brokers in Australia in the residential lending sector,” Mr Felton emphasised.
The research group ‘comparator’ provided the quarterly figure by calculating the value of loans settled through 19 of the leading aggregator groups as a percentage of the ABS housing finance commitments.