Brokers have been at the coalface of the COVID-19 crisis, with borrowers experiencing financial stress increasingly looking to brokers for multifaceted support, new research has revealed.
According to the latest research from MyState Bank – which involved a survey of 346 brokers in May – the third-party channel’s service proposition has “evolved” off the back of the COVID-19 pandemic, with approximately two-thirds of respondents reporting an increase in engagement with their customers since the onset of the crisis.
Surveyed brokers revealed that 80 per cent of their clients have experienced financial stress as a direct consequence of COVID-19.
Reflecting on the findings, MyState Bank general manager, banking, Tony MacRae said the results suggest customers are increasingly depending on brokers for support that extends beyond the traditional broker proposition.
“The coronavirus pandemic is causing Australians, especially those with mortgages, to feel anxious about their financial situation,” he said.
“The effects of the pandemic have been far-reaching, not just impacting people’s finances but their emotional state as well.
“During this period, we are seeing the role of mortgage brokers evolve to not only helping customers navigate through this period financially, but providing emotional support too.”
However, the MyState research also suggests that financial stresses may have abated, with 40 per cent of brokers reporting an improvement in their customers’ financial position in response to the easing of COVID-19 restrictions.
Property purchasers put on the back burner
According to the survey, refinancing applications have made up over 60 per cent of new customer enquiries since the outbreak of COVID-19, with borrowers looking to capitalise on record-low interest rates.
However, the research found that uncertainty in the housing market has prompted prospective borrowers to postpone their home buying ambitions, with over 25 per cent of brokers reporting that more than a quarter of their clients have put their plans on hold.
This follows the release of the Australian Bureau of Statistics’ latest Lending Indicators data, which reported a 4.8 per cent decline in the value of home loan approvals in April to $18.5 billion (seasonally adjusted terms) – the sharpest decline since May 2015.
The result was driven by a 5 per cent fall in owner-occupied lending to $13.7 billion, while investor lending fell 4.2 per cent to $4.8 billion.