The MFAA's latest Industry Intelligence Service (IIS) Report (6th edn.), covering the six months ended March 2108, has further confirmed the critical role brokers play in driving lender competition.
The report shows growth in the use of lenders other than the four major banks and their affiliates, with market share for the mix of these lenders increasing to 30.2% as at 31 March 2018, up from 27.9% in the previous IIS report (September 2017), and as compared to 21.4% less than five years ago in September 2013 when the MFAA first started tracking this data.
The trend in recently received data for the quarter ending 30 June 2018 shows another increase in market share for lenders other than the major banks and their affiliates, to a record level of 32.7%, further emphasising the competition that brokers drive.
The total value of lending directed to these lenders has also hit a record high of $15.1 billion for the latest quarter, up from the initial $6.7 billion in July-to-September 2013.
“Our IIS Reports are an important set of data for the industry, in order to quantifiably demonstrate the economic value of the services that brokers deliver. The latest findings reinforce the value proposition of mortgage brokers, creating choice and competition in the mortgage market by placing business with a wide set of lenders, many of which do not have a branch network,” said MFAA CEO Mike Felton.
The data also shows a major spike in mortgage brokers offering diversified services, with a 25% increase in the number of mortgage brokers also writing commercial loans - to just under 3,700 brokers. These brokers wrote close to $9 billion in commercial loans for the six-month period.
Whilst some industry measures are growing, overall, the data in this edition suggests that the industry is entering a period of consolidation with some key per-broker and industry performance indicators slowing, or in some instances contracting.
Broker population growth this period was steady compared to last report, following periods of growth, with the population sitting at 16,787 mortgage brokers; national average total remuneration per broker remains steady at $132,793; and the rate of growth of the quarterly value of home loans settled by brokers appears to be slowing.
“In my conversations with industry leaders, most would agree that growth has flattened overall. Many of the per-broker measures in this report show a flattening of performance across the industry. This suggests more impetus for mortgage broker diversification into commercial lending.”
“Another key finding that needs highlighting, as it's an industry-wide issue, is that the proportion of female mortgage brokers has once again dropped, now at 27.1%. We, as an association, are well progressed on an industry-wide initiative, in conjunction with our industry partners, to look at solutions to promote the broker profession as a career for women. This report will be released at the end of November,” Felton said.
The MFAA produces the IIS Report twice a year in cooperation with the 13 leading aggregators who account for more than 90% of the mortgage brokers in Australia. It is compiled independently by comparator (a CoreLogic business).