REA and Domain's move into broking space won't be easy, say fintechs
Recent moves by the REA Group and Domain into the broking space will likely not be a smooth journey for the property search websites, according to senior executives of two mortgage fintechs.
Realestate.com.au recently acquired an 80% controlling stake in mortgage broking franchise Smartline and announced a partnership with lending major NAB. Meanwhile, the Fairfax-owned Domain Group said it is set to launch Domain Loan Finder, in partnership with mortgage platform Lendi.
Founder and CEO of online brokerage uno., Vince Turner told The Adviser said while the moves by Domain and REA’s realestate.com.au site were “logical”, the companies could face “challenges” in the mortgage business.
“These guys have a lot of eyeballs, a big audience, and their traditional line of business in terms of advertising [such as website advertising via cost per click] is now going into the nominal value territory. They are not on the way out yet, but they will be soon,” said Turner.
“So, from Domain or REA’s point of view, they have to think what their transactions are that they can monetise … So, you can see why they want to get into transactional mortgages, that’s the logical part.”
But he said it was a challenge from both a cultural and customer perspective.
“You could argue that it’s pretty hard to get out of bed in the morning and be a media company [publishing company Fairfax owns Domain] and a financial services company.”
Online brokerage HashChing CEO Mandeep Sodhi said the new moves from Domain and realestate.com.au could upset the market as these have been traditionally seen as helpful, independent websites for consumers to research their home or investment property.
Sodhi said their partnerships with mortgage broking platforms could restrict choice in the market.
“Pushing borrowers to one group of brokers – who may not have access to all the banks and lenders – means they could unwittingly miss out on home loan products that better suit their needs.”
Sochi added that brokers could be negatively affected, as the two sites had historically been “strong sources for generating leads for aggregators to date” and brokers who are not members of the partnered mortgage broking platforms would now have to look for new lead sources.
