Is the housing market headed for a slowdown? That’s the word coming from the CoreLogic-Moody’s Analytics Australian Home Value Index Forecast, which has Sydney and Melbourne prices falling slightly between 2018 and 2020, the Financial Review reported.
What does this mean for a mortgage broker career in 2018? While mortgage activity might soon be slowing, that doesn’t mean the future isn’t bright for the broker’s industry. Here are a few reasons why 2018 will still be a great year to become a mortgage broker.
More and more mortgages are going through brokers
KPMG research released earlier this year reported that 44 per cent of survey respondents preferred to use a broker when applying for a home loan. That lines up with data from the Australian Securities and Investments Commission showing mortgage brokers were responsible for 54.3 per cent of loans in 2015, up from 47.7 per cent in 2012.
Mortgage brokers have become an important part of the home loan market, and this trend is unlikely to reverse anytime soon. Brokers help their clients find the right product and lender, and guide them through the sometimes confusing mortgage application process – the value this provides to homebuyers won’t disappear in 2018, even if the market reaches a plateau.
A correction, not a bust
The current forecasts all point towards a correction, not a bust, which is an important distinction to make. There are solid arguments to be made that many of Australia’s property markets are currently in the midst of a bubble – at the end of June, the price-to-rent ratio in Sydney, for example, was sitting around 30, suggesting people were paying far more for the asset (property) than it could generate in income
The current forecasts all point towards a correction, not a bust, which is an important distinction to make.
A slight fall in house prices will serve as a correction and improve housing affordability. While lower prices generally mean smaller mortgages (and therefore lower commissions), the benefits to your customers will be many.
Remember, too, that the Australian property market has a lot of geographic variabilities. Just because Sydney and Melbourne may no longer be booming, it doesn’t mean the rest of the country will be in the same state.
Whatever 2018 brings, a membership with Redrock is sure to help you in your business goals. Get in touch today to find out what joining our team can do for you.