The share of new loans originated by the broker channel has increased for the first time in six months, new MFAA data has revealed.
Increased broker originated loans show positive indication of the value of brokers to home buyers despite year-on-year decline and new regulations
According to the latest data released by research group Comparator, a CoreLogic business, and commissioned by the Mortgage & Finance Association of Australia (MFAA), mortgage broker market share increased to 55.3 per cent in the December quarter of 2019, up 0.4 percentage points period-on-period.
The quarterly rise marks the first period-on-period increase in six months, following two consecutive periods of decline.
The research – which draws on data collected from 18 of the largest broking groups and from the ABS – also found that unlike previous years, the December 2019 quarter reported a sharp increase in the value of new lending via the broker channel, up $3.15 billion (6.4 per cent), from $48.7 billion to $51.9 billion.
However, when assessed year-on-year, broker market share slipped for the first time, which MFAA CEO Mike Felton partly attributed to an exceptional result in the December 2018 quarter off the back of a spike in demand for broker services amid tight credit conditions.
“Contextually, the velocity of the year-on-year decline has also slowed significantly from 4.2 percentage points between the September 2018 quarter (59.1 per cent) and the September 2019 quarter (54.9 per cent), to 1.5 percentage points between December 2018 (56.8 per cent) and this December 2019 quarter (55.3 per cent),” he said.
Mr Felton observed that despite the year-on-year decline, the quarterly result reflects a stabilising trend in the market, which he claimed would benefit the industry in the near term as it grapples with new regulation.
“The positive indications within this quarter’s performance are of greater stability in the market going forward as the industry turns its focus towards the best interests duty and other reforms from the royal commission, which we see as being supportive of further growth in broker market share into the future,” he said.