New data has revealed mortgage brokers achieved a 20% year-on-year increase in the value of new settlements for the January to March 2020 quarter.
It was the largest volume through brokers ever observed for a March quarter, according to the research commissioned by the Mortgage and Finance Association of Australia (MFAA).
The overall value of new lending facilitated by brokers over the three months reached just over $49.0bn, an increase of $8.2bn from the comparable quarter ending March 2019.
However, despite the record result in terms of volume, broker market share declined over the quarter – down to 52.1% from 55.3% the quarter before and down from 59.7% from the corresponding quarter in 2019.
According to MFAA CEO Mike Felton, the result confirms lenders have been competing more fiercely through their proprietary channels. He specifically highlighted the major banks which have leveraged the strength of their balance sheets to pursue market share through “aggressive discounting”, as well as cash back and fixed rate offerings.
“It also reflects a blowout in lender credit turnaround times and delays in processing discharges which will have impacted broker settlements to varying extents in the quarter and particularly given the broker channel’s higher concentration of refinancers,” Felton said.
Notably, overall market volume for all channels increased by a significant 37.5% over the same period as compared to the quarter ending 31 March 2019, also contributing to the lower relative broker market share result.
“Whilst broker market share over the past year has declined in percentage terms, the broker value proposition remains strong,” said Felton.
“We are confident that the reforms currently being implemented will continue to drive trust, confidence and an increase in market share in the years ahead as consumers increasingly turn to the broker channel.”
