Sentiment Survey - Q2 2011

Support for the non-bank and second tier sectors remains solid. In Q1, 75.1 per cent of brokers who responded to the survey expected to recommend non-bank products in the coming quarter; at the end of Q2, 76 per cent said they had indeed done so.

Eighty-seven per cent expected to recommend second tier products in the same period, and by the end of Q2, only slightly fewer – 83.7 per cent – had done so. Most of those who “didn’t know” in Q1, however, ended up not recommending second tier products in Q2.

The proportion of brokers that expects loan volumes to decrease has risen to 29.3 per cent from last quarter’s 23 per cent, with slight drops in the number of brokers that expect volumes to remain the same or rise.

In the property market, 38.1 per cent of brokers now expect sales to decrease in the coming quarter, while in Q1 that figure was only 29.8 per cent. Also in Q1, while 17.7 per cent expected residential property prices to rise, that figure has plummeted to 4 per cent of brokers in Q2.

A vast majority of brokers, 79.5 per cent, still believe the property market in the coming quarter will represent good value for buyers, which is a small increase on the Q2 figure.

Having taken a battering throughout the financial year, the Gillard government remains unpopular both with brokers and the public. A huge 78.4 per cent of brokers think the government is not doing a good job managing the economy, an increase of 3 per cent since the previous quarter.

Dissatisfaction with the RBA has also increased significantly. In March, 68.5 per cent of brokers thought the Bank was doing a good job controlling inflation; three months on, that figure has dropped to 58.3 per cent.

Considerably more brokers now expect the cash rate to go up in the next quarter – 41.4 per cent, a massive increase of 22 per cent on Q1. The number that believes the cash rate will have a negative impact on the demand for home loans, 60.8 per cent, is also up by just over 20 per cent.