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Brokers push growth in home loans market

Sarah Stowe

Just over half of all home loans currently arranged in Australia are done through a broker but that figure could rise dramatically with an estimated 30,000 brokers needed to meet increased industry demand, suggests Citiwide Homeloans.

Patrick Marion, CEO of Citiwide Homeloans, said “We currently have 52 percent of home loans written through brokers and it is reasonable to assume that the market in Australia will be 70 percent broker-led within the next five to 10 years, as we are already seeing those levels of broker-led transactions in the US and UK.”

Marion predicts his business will grow by 30 to 40 percent in the next year.

“Citiwide experienced 25 percent growth over the past year but with interest rates still low and constant talk about housing boom or bust on any given day the finance industry remains ever present.

“We have written an increase of 30 percent in loans this year but could have done more with more brokers on board. It’s a case of needing the talent to keep up with demand.”

Research commissioned by the MFAA (Mortgage & Finance Association of Australia) found that mortgage brokers were responsible for 71 percent of the growth in the residential mortgage market in the 12 months to the end of March 2015, accounting for $31.2 billion of the $44.2 billion increase in mortgage lending based on ABS (Australian Bureau of Statistics) Housing Finance Commitments.

“Given the flexible working hours brokers enjoy, would-be brokers often misconstrue this as a part-time job. Nothing could be further from the truth though because it is a demanding and full time job but nonetheless extremely rewarding” said Marion.

“It’s what we describe in the industry as a ramp-up business – as it tends to start slow but gains great rewards as time goes on and provides excellent residual income once you build up a decent portfolio of clients. It also provides incredible flexibility, with an opportunity for work/life balance that is difficult to achieve in most other careers.”