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Property markets remain strong but facing uncertainty, customers need brokers more than ever.
Property markets are still buoyant, home buyers are active, and investors are building up their property portfolios but recent events both locally and around the world are shaking customer confidence. In this environment, brokers have never been more important in providing customers with choice and guidance in making home lending decisions.
Over the past two years, Australia’s housing market has risen by almost 25 per cent, adding around $144,000 to the value of a home, according to CoreLogic’s national Home Value Index. In February, house prices rose by 0.6 per cent, representing the 17th consecutive month of increases.
The latest figures from the Australian Bureau of Statistics show that total housing finance commitments were up 18.2 per cent year-on-year in January to a record high of $33.7 billion. The investor market led the way with new housing loan commitments to investors up 67.8 per cent over the year to a record $11 billion.
While the housing market continues to show momentum, local issues such as widespread flooding on the east coast and the continuing prevalence of Covid-19, as well as events overseas, are dampening consumer confidence.
A steady hand for guidance
On a day-to-day level, the stress associated with the cost of living is the biggest concern for households, NAB’s Consumer Sentiment Survey for Q4, 2021 shows. While the Federal Budget in March included one-off payments and tax cuts and a temporary cut in fuel excise aimed at offsetting the rise in living costs, higher inflation and recent global events are likely to continue to increase cost pressures.
In times of uncertainty, customers are increasingly turning to brokers for guidance and support with their home lending needs. The latest MFAA Comparator data shows brokers settled 66.5 per cent of all new residential home loans in December 2021.
“Brokers play a valuable role in encouraging open and inclusive conversations with customers throughout the lending journey,” NAB Executive, Broker Distribution Phil Waugh said.
“As the bank behind the broker, NAB is delivering value, consistency and clarity that brokers need to support their customers.”
The valuable role of the broker
Mr Waugh said it was encouraging to see both major political parties showing support for the industry’s remuneration structure in recognition of the value that brokers provide and the maturity of the sector.
A review of broker commissions that was proposed in 2019 will no longer proceed, with assistant treasurer Michael Sukkar MP acknowledging the important role that brokers play in helping Australian home buyers to get a better deal and have choice when selecting a home loan provider.
“At NAB, we support healthy competition between lenders and better outcomes for customers. As well as delivering a compelling product and service proposition, we are committed to lifting professional standards, supporting training and education, and positive behavioural change across the industry,” Mr Waugh said.
“I’m a big believer in leading the market in what’s best for our industry, customers and our businesses. It’s what protects our customers and our industry and keeps all our businesses growing in a sustainable way.”
Quicker, simpler and smarter
Technology also has a role to play in improving the lending experience for brokers and their customers, Mr Waugh added.
The broker channel is NAB’s top priority for investment in home lending in 2022, including white-label which remains strategically important to the business.
“NAB continues to invest in delivering on its simple and digital agenda, helping to support faster decisions and turnaround times. We see opportunities to continue to grow and invest in white-label to provide a wider range of options for brokers,” Mr Waugh said.
In March, NAB announced it had strengthened its longstanding partnership with Yellow Brick Road. This partnership marks the 10th white-label offering of its kind and was the result of close and careful collaboration with the Yellow Brick Road executive team and a select group of brokers within the network.
“By continuing to deliver choice to brokers and their customers and investing in technology to speed up and simplify loan application and processing times, NAB is supporting brokers to grow their businesses as they help their customers to navigate their home lending needs,” Mr Waugh said.
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