The Mortgage and Finance Association of Australia (MFAA) has released the latest Industry Intelligence Service Report (IIS) 8th edition highlighting the strong performance and systemic importance of mortgage brokers at a time of tough market conditions, severe credit tightening and unprecedented industry scrutiny. 

The IIS Report 8th edition, which draws on data supplied by 12 of the industry’s leading aggregator brands, provides broker and industry performance and demographic data for the six-month period of 1 October 2018 to 31 March 2019, as well as data from recent quarterly periods.

October 2018 to March 2019 was a tough period for Australia’s housing market and the mortgage broking industry with total values settled and home loan applications down. But despite this, broker market share and the national total value of broker loan books reached new record highs of 59.7% and $686.93 billion respectively during the period.

MFAA CEO Mike Felton said the fact that the market share growth during the six months coincided with a period of severe credit tightening, as well as the release of the final report and recommendations of the Royal Commission, proved once again the strength of consumer confidence in the channel.

The increase in market share also coincided with a record share of the broker channel's business being directed to lenders that are in no way affiliated to the major banks, with this combined segment recording a market share of 36.5%. This clearly shows the systemic importance of the channel in driving competition, choice and moderating the dominance of the major lenders.

Despite the exceptional share result, the broker channel settled $87.56 billion in residential home loans for the six-month period, the lowest six-month value recorded since the MFAA commenced reporting in 2015, down 10.59% period-on-period, and 10.32% year-on-year.

“Whilst these results are a concern, the mortgage broking channel performed extremely well in the context of overall tough market conditions, with the overall market down 13.05% period-on-period and 14.64% year-on-year,” Mr Felton said.

Having reached a peak of 17,040 brokers last period, the broker population also contracted slightly this period to 16,851 brokers, revealing an emerging stabilisation of the broker population, tracking at around 16,900 brokers over the last four periods.

“But with ongoing year-on-year market share growth proving the value that mortgage brokers deliver to their customers through the role they play in driving competition, choice and access to credit, we’re in a strong position to capitalise on future periods of growth and prosperity.”

Download the MFAA's latest IIS Report 8th edn. here.