Drawn-out turnaround times have been the biggest cause of frustration for brokers over the last year
Connective brokers lodged a whopping $93.96 billion in residential home loan applications last financial year – an increase of 35% year on year. But while the numbers are certainly cause for celebration, the extra work brokers have had on their plates, as well as the stress of delayed loan approval times, has made it essential they prioritise their own wellbeing, according to executive director Mark Haron (pictured).
“One of our large concerns is around brokers getting burnt out and having more stress,” he told MPA. “For many, they have increased their enquiry level and their application level has increased significantly but it’s also taking a significantly longer period of time for brokers to get the loan approved with lenders. They’re also contending with having to make the change to implement their best interest duty requirements as well.”
Delayed lender turnarounds have been one of the main causes of stress and frustration for brokers throughout the last 12 months, he said, but, in some ways, this has ultimately led to better outcomes for consumers.
“We’ve seen that improve (processing delays) with many lenders and we’re also seeing brokers taking customers on a journey of looking outside some of the major banks where they need to so they can place the deal, so it gets done,” he said. “That’s something that a lot of brokers have adapted to really well.”
Another thing brokers have adapted to over the last year has been their use of technology to manage non-face-to-face communication with clients, said Haron. This has been a key factor in the surge in volumes the aggregator has seen since July last year. Other factors include the “goodwill” that was generated at the start of the pandemic when brokers were there to assist their impacted clients, as well as record low interest rates and increased competition between lenders.
“Some of the competitiveness between banks, in terms of their interest rate offerings and cashback offers, has certainly increased demand for broker services,” he said.
Much of this demand came from owner-occupiers throughout the majority of 2020 and the start of 2021, but has shifted towards property investors in recent months – though not as much as what was seen in past upswings.
As for this financial year, Haron said he anticipated demand would stay strong despite protracted lockdowns due to low interest rates and the level of FOMO still operating in the market.
“To say that it would be the same as what it has been in the last 12 months - I’d like to say that would be the case, but I don’t think it will be quite as high,” he said.