Morning Briefing: 'sobering' prospects for Qld and WA brokers

'Sobering' prospects for Qld and WA brokers, says new MFAA IIS report 

Brokers in Queensland and WA should be concerned as growth in new brokers outstrips growth in the states' property markets, according to the MFAA's Industry Intelligence Service report. Indeed the growth in broker numbers in WA was above the national average even as the states' property market struggled: consequently turnover in brokers was the highest in the nation.

The report, which used data from September 2015 - March 2016, also warned that in NSW/ACT "more brokers are fighting for a share of a shrinking home loan market." Overall, the report found, even though the number of brokers has increased by 5.8%, the broker-originated home loan market contracted by 1.5%, hence the threat of rising broker-broker competition. 

Some states are in a much better position. Victoria, the report noted, "may well currently be “the place to be” for brokers when compared
to the conditions observed in the other major states." The broker-originated loan market was continuing to grow in Victoria and Tasmania yet brokers had lagged behind the direct channel in these states, the report explained, meaning there was more room for growth. South Australia was in a "stable condition" with high broker productivity and low turnover.

The report made a number of other findings, such as the average gross upfront and trail commissions generated per residential mortgage broker,
before costs, which were estimated to be around $140,000 p.a. On average, brokers lodged about 20 new loan applications each during the six month period. However, 17% of brokers did not lodge a single application in the six months of the survey.