37% of nation's brokers operate out of these two areas
The number of brokers servicing NSW/ACT has swelled to 7,174, up 392 on the year before, according to the latest research from the MFFA.
However, the MFAA Industry Intelligence Service 16th Edition Report, which covers the six-month period from October 1, 2022, to March 31, 2023, revealed NSW/ACT brokers settled $62.57 billion in home loans compared to $71.83 billion during the equivalent 2021-22 period, representing a decrease of 12.9%.
The good news is the region’s overall home loan book grew year-on-year, up by 5.42%, from $330.04 billion to $347.94 billion.
Broker jobs in hot demand
Home to 37% of the national population of brokers, NSW/ACT brokers settled 38.7% of the national value of home loans settled in that period, with each one lodging on average 15.2 loans.
Broker Nathan Aird (pictured above left), the director of Universal Mortgage Experts, based in Toukley on the Central Coast, said he was not surprised to learn there were more brokers entering the sector with a recent advertisement for a Central Coast-based broker attracting 150 applications in a three-week period over the Christmas break.
In 2021, Aird spoke to MPA about the popularity of the Central Coast and the increased interest from people wanting to relocate there.
The area is also attracting plenty of brokers in 2024.
“There is so much work out there, it’s an attractive offering to many new entrants, and those in other parts of the finance and real estate markets,” Aird said.
“There have been many new entrants locally this last year, confirmation that many are and will continue to look at a career as a mortgage broker.”
Despite some of the MFAA numbers showing a slowing of the broker sector in terms of the value and volume of loans, Aird said the results were better than he had expected given the interest rate rises and cost of living pressures.
“The property market locally, continues the grow, in spite of these pressures,” Aird said.
“With the recent talk of rate drops at the end of the year, this has led to increased levels of investor inquiry, on top of the continuing owner occupier demand.
“It looks like the projected property growth in 2024 is definitely leading toward a positive and busy year for mortgage brokers.”
Still plenty of challenges for brokers
Despite his optimism about the sector, Aird said there were still plenty of challenges for brokers to overcome as many of their clients were doing it tough because of economic pressures.
Aird said many brokers were also assisting fixed rate customers coming to the end of their low fixed rate terms.
“There are also higher numbers of customers purchasing off the plan land, who are experiencing difficulty due to the increased cost of construction, resulting in servicing issues,” Aird said.
According to the MFAA data, on an individual basis, the average NSW/ACT broker settled $8.72 million in home loans for the period, down 17.66% year-on-year, from $10.59 million while year-on-year the value of the average loan book increased to $48.50 million per broker, up 4.8% from $48.66 million.
The data also showed a total of 109,332 loans were lodged for the state, for the period, down 4.36% compared to a year ago at 114,316.
Other MFAA data showed brokers in NSW/ACT earned an average annual gross up-front commission for the period of $113,376, compared to $137,694 the previous year, and $72,750 gross trail for the period, compared to $72,997 last year, for a combined gross commission of $186,127.
In total, this was down by 11.66% from a year ago.
Interest rate rises impacting brokers
MFAA CEO Anja Pannek (pictured above right) said her organisation’s report reinforced feedback from members about the impact interest rate rises and record levels of refinancing were having on brokers and their clients.
“The period covered in the report coincided with a period of intense refinancing as fixed rate mortgages reverted to variable, clients encountered serviceability constraints and a moderation of property prices in some markets,” said Ms Pannek.
“This confluence of factors can be seen in this industry research; however, the outstanding service mortgage brokers deliver to their clients has remained a constant throughout this time.”
During the period, nationally mortgage brokers maintained a strong market share, writing 69.6% of all residential home loans in the March 2023 quarter, while in the 12 months to March 2023 mortgage brokers settled a record $358.68 billion in home loans.
The report also shows that in comparison to the October 2021-March 2022 period, the total value of loans settled by mortgage brokers nationally declined 8.63%.
However, Pannek noted that despite this fall the broker channel outperformed the overall home loan lending market nationally.
What are some of the issues facing the broker sector in NSW and the ACT? Share your thoughts below
