Mortgage brokering is an interesting industry that has proven to be essential in Australia’s real estate landscape. With its growing prominence, many people may be increasingly drawn toward this field.
While the property market continues to play a big role in the minds of people and the national economy, the mortgage broker business doesn’t quite receive as much limelight and can be shrouded in a little bit of mystery to the common Australian.
Business is booming
The Mortgage Brokers in Australia report by IBISWorld thoroughly explores just how big the industry is, where it’s going and what it means for people in this field. The release reveals that mortgage brokering is actually still relatively new as it’s only been truly coming into its own since the early 1990s.
Since then, however, this service business has been going from strength to strength. The IBISWorld report reveals some key figures supporting this. From 2014 to 2015, there were 5,770 mortgage broker businesses in Australia, which generated $1.8 billion in revenue. Over $1 billion was paid out in wages, while almost $400 million was recorded as profit.
These are some impressive numbers that have moved in tandem with housing demand. After all, the success of this industry is inevitably tied to the performance of the local real estate market. A December 18 release by CoreLogic RP Data reveals that Australia’s residential property is now worth an estimated total of $6.3 billion – a $600 million increase over the previous year. Furthermore, there were $283 billion worth of housing transactions over the year, and mortgage brokers have been largely riding on the back of this stellar performance.
To the future and beyond
So, what does the future hold for the industry? The IBISWorld report predicts that from 2015 to 2020, the mortgage brokering business will grow at a compound annual rate of 2.1 per cent. While this is not as drastic an expansion when compared to the 2010 to 2015 period (4.1 per cent), it’s still a strong result. Furthermore, in the 2015 to 2016 period, revenue is predicted to grow by a whopping 5.5 per cent.
All of these positive numbers go hand-in-hand with the forecast that more and more house hunters will enlist the services of mortgage brokers in the years to come. Like any sort of business, of course, mortgage brokering is not immune to external effects that can lead to a downturn in the industry, and people must always be aware of this. Still, the sky appears to be the limit as forecasts remain generally positive.
