$255 million worth of home loans settled
The number of mortgage brokers in the Northern Territory has increased although the number of loans they settled has dropped, according to the latest research from the MFFA.
The MFAA Industry Intelligence Service 16th Edition Report, which covers the six-month period from October 1, 2022, to March 31, 2023, revealed there were 50 brokers working in Tasmania during that period – up from 45 the year before.
Easy Loans’ Michelle Lewis (pictured above left), who has been a broker since 2012, said there had been lot of changes in the Northern Territory broker sector with many brokers leaving the industry to retire, while new brokers had entered the profession.
Lewis, who is based in Darwin, said Easy Loans has had two new brokers, Martin Callaghan and Laura Kempster, join the business in the past 12 months.
Lewis said while mortgage broking held plenty of appeal for those in the banking sector, some baulk at making the change from being paid a salary and instead being self-employed and working on a commission basis, while others also worry about losing entitlements such as holiday pay.
However, Lewis said after many years in the business it was a sector which held plenty of appeal for her and her colleagues.
Number of home loans settled drops
According to the MFAA data, during the six-month period from October 1, 2022, to March 31, 2023, Northern Territory brokers settled $255.40 million in home loans compared to $330.70 million during the equivalent 2021–22 period, representing an 8.6% decrease.
They also lodged on average six loans which equates to a total of 300 loans lodged for the territory, for the period, down 30.72% compared to a year before when it was at 433.
Despite the MFAA data showing there had been a decline in mortgage sector returns in the Northern Territory, Lewis said business at Easy Loans had remained steady, similar to the previous year.
Lewis said there had been a “mixed bag” of work including property purchases and refinancing.
“I think when COVID hit and there were a lot of building grants we saw a massive amount of builds happening, as you can imagine … that definitely has dropped off over the last 18 months,” Lewis said.
According to Lewis, the fact that the only-state based first home owners grant available is only for $10,000 and only for new builds, hasn’t help drive demand in that area of the market.
When it came to the property market, Lewis said “the right property, in the right price range” would be snapped up quickly.
Hot Northern Territory property market
Lewis said rural property, 20 or 30 minutes from town, was in high demand.
“Our rural space is still extremely hot because people are wanting to have the bigger lifestyle blocks and they are not that far from town and some of our bigger shopping centres,” Lewis said.
Other MFAA data revealed the value of the Northern Territory’s overall home loan book decreased 6.12%, from $2.94 billion to $2.76 billion.
On an individual basis, the average broker settled $5.11 million in home loans for the period per broker, down 30.48% year-on-year, from $7.35 million while year-on-year the value of the average loan book decreased to $55.21 million per broker, from $65.25 million a year ago, down 15.39%.
The MFAA data also showed brokers earned an average annual gross up-front commission for the period of $66,405 compared to $95,934 the previous year, and $82,808 gross trail for the period, compared to $97,868 the previous year, for a combined gross commission of $149,213.
In total, this was down by 22.85% from the year before.
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.
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