• 15/08/2022

Who wins in a cooling property market?

The property market is cooling – primarily due to rising mortgage rates.  However, many businesses can thrive in this environment.

When rates are going up, just turning up at your local bank for a mortgage and expecting to get a loan is not going to cut the mustard.

And this has proven to the case recently. In the three months to April, the mortgage market expanded by about $31 billion, but the big four picked up only $11.5 billion of this loan growth.

Smaller lenders have been the winners in recent months.

Much of the growth outside of the big four has been driven by mortgage brokers who know which lender will get a loan done in a tight property market.

Nearly 58 per cent of mortgages are now written by brokers who know that some smaller banks and non-bank lenders will go to places the more conservative lenders wont.

Right now, many Australian homeowners will likely be experiencing their first-ever rate rise, and while that may be stressful for some, brokers know how to shop around for a better deal for their clients.

And, with so many existing loans having already been stress-tested for rising interest rates, broker can be confident that the property market will hold up.

During Covid, many banks closed down branches that will not re-appear – all the more reason why borrowers will need brokers services.

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