Three out of five homeowners opted to get help from brokers in the first quarter, resulting in the highest residential mortgage broker market share ever.

CoreLogic has released the latest data and found that broker-originated loan approvals increased to 59.7% in the three months ended March, which is 4.4 percentage points more than in the same quarter last fiscal year.

The final report from royal commission was published in the same quarter. It recommended that trail commissions be banned. After a series consultations with smaller lenders and the mortgage broking industry, the government backed down from initial support of all recommendations made by the royal commission.

Mike Felton, CEO of Mortgage and Finance Association of Australia (MFAA), stated that the growing market share of broker-originated loan could be a sign of how important brokers are in driving competition and providing borrowers assistance and solutions to credit.

“The fact that customers have continued to vote with their feet during a period that coincided with the release of the royal commission’s final report also highlights the strength of this market share result and sends a strong message to policymakers as to the extent to which consumers value the greater industry experience and choice that mortgage brokers provide,” he said.

Downturn affects home-loan values

Despite the high broker market share however, the overall value for lending through this channel fell by 11.39% (or $5.25bn) to $40.85bn. Felton said this could be due to the downturn in the lending market — for the first quarter of the year, the total value of housing loans issued declined by 17.86% from $88.64bn to $72.80bn.

Felton stated, “This result clearly indicates that mortgage brokers were able to focus on their clients despite all of the noise around the industry and continue providing unparalleled service and choice for Australian consumers.”

This is in line with recent Australian Prudential Regulation Authority figures which show that home-loan approvals declined by 16.5% during the March quarter.

Mortgage brokers are positive

Market watchers agree that the market has seen a decline in the total value of home loans made through brokers. However, they believe the increase in broker market share is a big win. It reflects the importance brokers play in the home-lending industry.

According to Deloitte Access Economics’ study, the Australian mortgage industry contributes approximately $2.9bn annually to the economy.

Susan Mitchell, a Property Observer industry watcher said, “These new figures highlight how significant the mortgage broking channel contributes to the Australian economic,” in a thought piece.

She stated that brokers are vital in helping borrowers navigate housing markets despite affordability concerns.

She said that brokers “enable Australians to invest and secure the home they desire because they provide expert advice, choice and valuable services throughout the increasingly complicated journey to home ownership.”