Mortgage broking market set to grow
Mortgage brokers' share of the lending market is expected to reach well over 40 per cent over the coming year, according to the Mortgage Finance Association of Australia (MFAA).
Although Deloitte's recent Australian mortgage market report forecast overall home lending growth of 5 per cent in 2013 compared to 2012, MFAA chief executive Phil Naylor said the broking sector has a good chance of increasing its market share as consumer demand for professional credit advice grows.
"We agree with the Deloitte report that the $1.3 trillion mortgage market in 2013 will be highlighted by tougher competition and margin pressure, leading many lenders to more actively manage their books and seek efficiencies through the use of the broker channel," he said.
Vow Financial chief executive Tim Brown said his business is seeing a huge turn-around in the market and he agrees that the major banks are getting much of that growth.
"We're currently experiencing 21 per cent growth both in our broker numbers and in our volumes," he said.
"We're getting more pressure on us from the retail banks to help them achieve their retail budgets."
The Deloitte paper found that new non-major competition in the next three years is expected to come from online lenders and existing large regional lenders.
In addition, the research stated mobile apps and social media are increasingly being used by customers well before they seek lending advice. Naylor said this would provide brokers with the opportunity to take ownership of the customer earlier.
To tap into this trend, Brown said Vow is currently working on a pilot program for online broking services.
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