Access to affordable housing key for brokers and lenders: Genworth

A recent report from Lenders Mortgage Insurance (LMI) company Genworth revealed that 45% of mortgage brokers surveyed believe helping Australians overcome the lack of access to affordable housing will be one of the mortgage industry’s biggest challenges over the next five years.

The 2013 Home Grown Report, drew upon findings from quantitative surveys, interviews, and workshop discussions held between August and October this year.

It also revealed that 43% of lenders lenders expect the market to be potentially impacted by a weak domestic economy, while 37% of lenders think housing affordability and regulatory impacts will adversely affect the market.

“The recent resurgence of growth in property prices has likely led to a situation where mortgage industry participants are concerned about how housing affordability will affect certain segments of their customer base,” Genworth Australia’s chief commercial officer Bridget Sakr said.

“Around one in two brokers surveyed wrote fewer loans to first homebuyers over the previous 12 months when compared with the preceding 12 month period.”

“This suggests that prospective first homebuyers continue to experience difficulty in entering the property market and this issue is negatively affecting the amount of business brokers are writing for this group,” Sakr said.

Over 40% of lenders agreed that removing or reducing stamp duties that would benefit the mortgaged market. In addition, 30% of brokers agreed with this assertion.

“However, many participants also argued that removing or reducing stamp duties would only drive up prices and impact housing affordability further,” said Sakr. 

“The sector is clearly very concerned about the issue of housing affordability and how it is going to affect the mortgage market moving forward,” Sakr added.

Both lenders and brokers believe borrowers will increasingly use technology to apply for mortgages. A majority of lenders (90%) and brokers (65%) expect an increase in mortgages sold through online channels in the next five years.

Additionally, 74% of lenders surveyed and 50% of brokers expect to see more borrowers purchasing mortgages using their mobile devices.

However, industry experts interviewed for the study agreed that “the automatic online loan is a long way away” as mortgages are “too complicated for digital channels.”

“The online arena provides a platform for innovation and differentiation in a competitive market,” said Sakr.

“The ongoing digitalisation of the sector is likely to continue,” she added.