Aussie Home Loans joins AFG as loan providers reaping the rewards of low interest rates
Lower interest rates and surging property markets – particularly in Melbourne and Sydney – are helping loan providers reap rewards.
Aussie Home Loans last month reached the $2 billion milestone in home loans lodged through its three distribution channels: mortgage brokers, retail outlets and aggregator subsidiary National Mortgage Brokers (nMB). The group’s 150 retail stores broke through the $1 billion milestone for the month in loans provided to new buyers, re-financers and investors.
The $2.1 billion group result for October represents a 22.1% lift above October last year. The news was reported in Australian Broker Online.
This follows news that more than $4 billion in home loans was processed last month by AFG, Australia’s largest mortgage broker – the first time its national 1,900 brokers have collectively broken through the $4 billion mark.
The $4,057 million figure is 12% higher than the $3,624 million processed the month before, which was itself a record. The October 2013 figure is 30% higher than October last year, and 61% higher than October 2011, showing how far the mortgage market, and broader economy, has recovered over the past two years.
Aussie chairman and founder, John Symond, says the retail result is a standout, as Aussie only established a substantial retail arm following the acquisition of Wizard Home Loans in 2009.
“This result is due to the hard work of the entire Aussie Group and demonstrates that volumes are returning to a more healthy market condition as buyers take advantage of low interest rates,” he said.
On the back of the growth, Aussie is on the expansion trail with a recruitment drive for former real estate and finance executives to become mobile brokers and franchisees of new stores.
“We’ve seen substantial growth across our three distribution channels and are keen to find new brokers and franchisees to join our successful and winning team”, Symond said.
Aussie’s total loan portfolio is worth $57 billion, including aggregator nMB, which was acquired by Aussie in 2012.
“All three of our distribution channels are firing and we see no reason for our growth to slow, as interest rates continue to bump along the bottom and our operations are becoming more efficient and effective in servicing our new and existing customers.”
Meanwhile, mortgage delinquency rates in excess of 30 days in the Australian prime residential market dropped to 1.35% in August, down from 1.39% in July, according to Moody’s Investors Service’s Global Structured Finance Collateral Performance Review.
However, the August figure is up from the same time last year (1.24%), but analysts remain optimistic, says Australian Broker Online.
“Looking ahead, we expect the performance trends witnessed to date in 2013 to continue with stable delinquencies, underpinned by expected GDP growth of 2.0% to 3.0%, the current low interest rate environment, and a steady unemployment rate of 5.0% to 6.0%” says Jennifer Wu, vice president and senior credit officer at Moody’s.
The report says Australian prime 60-day-plus arrears in August, at 0.76%, also compare favourably to all economies covered in the report, except for Japan’s (0.29%).