Market momentum bodes well for brokers across first-home buyer, investor segments
NAB’s executive broker distribution Adam Brown (pictured) divulged his thoughts on the current mortgage broking landscape during the banking major’s flagship Forward View webinar this Thursday.
“More and more Australians are turning to brokers for support,” Brown said in discussion with broadcast journalist Mimi Kwa. “And we'd like to think that we're there and a really great partner for those customers as well.”
Read more: Broker share of mortgage market surges to new record
It helps that the property market remains exceptionally strong. “We haven't always been able to say that, but the property market has got good momentum,” said Brown.
Customer confidence, too, is on the mend. “We've seen more property listings now, auction clearance rates are really strong, (and) we have seen pricing of property increasing over the last quarter… It's a great opportunity for brokers to support their customers right now.”
Of course, the expansion of the government’s 5% deposit scheme – which NAB has been a supporter of since day one – is likely to keep property prices (for better or worse) on an upward trajectory for the time being.
On that note, Brown drew attention to persistent supply-side challenges, which are a major contributor to Australia’s lofty house prices. Just this week, Cotality revealed that a third of all Australian housing markets are now in the million-dollar club, thanks to tight housing supply levels and elevated demand.
“There's still not enough affordable housing. NAB's playing their part by investing in housing developments, affordable housing developments. And we'll continue to do that. But that supply side is still a bit of a challenge for Australians.”
Investor lending skyrockets
Amid this melange of macro factors, it's as important as even for brokers to be there for their first-home buyer customers. Brown said: “Sometimes that's not always just to help them into a home loan. Sometimes it's helping them be ready for their first home loan, whether it's now or whether it's later. So we certainly see opportunity there for brokers.”
Alongside strong volumes in the first-homer buyer space, NAB is seeing “real strength” in the investor market as more and more customers seek to add brick-and-mortar assets to their investment portfolios.
Recent PropTrack data showed that over the past year, investors accounted for the highest proportion of new lending since 2017, a trend attributed to lower mortgage rates and persistent rental market tightness.
It makes perfect sense why: Over 90% of investment properties sold in the past year achieved prices above their original purchase price, reflecting the impact of home price growth during and after the pandemic, especially in smaller capitals.
A large proportion of volume growth is emerging from what Brown called “the mass affluent customer segment”.
Brown said: “Those customers that are looking to grow their wealth, they might be looking to invest in property, they're looking for a little bit more from a partner in their bank and their financial institution, but they're also seeking a little bit more from brokers as well. And sometimes their needs are a little bit more complex.”
Through feedback from brokers, NAB has identified this mass affluent segment as one that deserves more attention. For its part, NAB has adapted its policies to better serve this segment, introducing features like 10 multi-offset accounts to offset interest.
Self-employed customers have also been handed multi-offset capabilities in response to broker demand, while policy changes around accepting one-year financials have also been made.
Speeding up approvals
“One of the things that we intersect with brokers is the care for our customer,” said Brown. “And that care for customer comes from the time that they walk into a broker's office, or in a Zoom meeting, or at a coffee shop, and they talk about their dream of owning a home.
“And it goes all the way through to lodgement with us, getting an approval and then us talking to a customer about congratulating them and celebrating the fact that they've got a home loan.”
To better serve brokers at the application stage, NAB has also introduced a new ‘one-and-done’ template and tool to help brokers understand what NAB needs to assess and approve a customer's loan on the spot.
The outcome of these and other tech upgrades “is a quicker response for broker, quicker response for customer, getting them in the home as quickly as possible”.
To support brokers through 2026, “we'll continue to improve our policies, listen to feedback, make tweaks where we think it makes sense to support brokers and those customers that they introduce to us”, added Brown.
He’ll undoubtedly be seeking feedback on how NAB lives up to the task.
