Mortgage brokers offer clients a range of products that can be tailored to specific needs.
Melbourne, Australia (PRWEB) September 10, 2013
Buying one's own home has long been the Australian dream. It is often the biggest financial decision an individual will make in their lifetime, and for that reason borrowers find comfort in consulting an expert who can help them wade through the complex range of products. The Mortgage Brokers industry is relatively new, having been around for less than two decades. Mortgage brokers have filled a gap in the market that has been missing in the past, and are seen as providers of comprehensive, convenient and unbiased advice to clients. Because they represent a panel of lenders, they are able to offer customers a range of products and tailor mortgages to specific needs. For these reasons, demand for services from the Mortgage Brokers industry has grown, but the industry was not immune to the economic downturn. Over the five years through 2013-14, revenue is estimated to grow at a compound annual 2.2%. The industry has suffered through reduced credit volumes and flat house prices. At the end of 2013-14, the industry is estimated to be worth $1.7 billion on the back of healthier year-on-year growth of 3.8%, as demand continues to rebound and house prices show signs of growth.
IBISWorld industry analyst Tim Stephen states “in the five years through 2018-19, the industry is expected to break free from the shackles of the global financial crisis, typified by tight credit and record levels of consumer savings.” Industry employment will increase due to favourable conditions, and competition will intensify, led by the industry's largest players Australian Finance Group, Commonwealth Bank of Australia and Mortgage Choice Limited. According to Stephen, “supply of finance is expected to rise as credit loosens and more lenders enter the market. This will contribute to growing demand for broking services as lenders continue to use brokers as a medium for distributing products.” Broker penetration is expected to continue its upward trend, suggesting that the industry has potential for growth in the mortgage market as a large proportion of loans are still written directly through banks.
Industry market share concentration is at a moderate level. Broker groups are expected to undergo considerable consolidation in the coming years. The big four banks are expected to play a part in this, at least as far as the ACCC will let them. Considering the ACCC recently allowed the Commonwealth Bank to gain control of Aussie Home Loans, it is likely the remaining three banks will accept this as a precedent and attempt to increase their involvement in the industry. For more information, visit IBISWorld’s Mortgage Brokers report in Australia industry page.
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IBISWorld industry Report Key Topics
Mortgage brokers in Australia generally act on behalf of lenders, aiding borrowers in sourcing and applying for mortgage finance (for both residential and investment real estate purposes), and in refinancing existing mortgages. In general, brokers do not charge mortgagees any fee for their services. Rather, mortgage brokers receive origination and trailing commissions on originated funds directly from lenders.
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