The number of new residential mortgages in New Zealand has fallen as interest rates have risen. Figure /123RF
Mortgage brokers have not been spared the downturn in home sales and some have exited the industry due to continued headwinds in the property market.
Last year was a game of two halves for entrepreneurs said the NZME
however, many agreed that this year will be difficult and similar to the challenges faced in the past 12 months.
Mobile mortgage consultant Laura Carter from The Mortgage Girls says there was a 15 percent drop in completed loans last year compared to the year before.
“The rise in prices and the threat of the economy and the fall in housing prices scared a lot of people. There was more anxiety than what we saw going into the first Covid lockdown. The challenges the best we have faced is the limitation of options for first home buyers, the increase in the use of rates means less borrowing and trying to show a positive message about the housing market to stabilize the confidence of buyers in buying houses when the media makes it so doom and gloom.’ ‘
A lot of new business was done in 2021 but in 2022 a lot of advice was received about existing mortgages and structures / renovations etc.
“We were a bit quiet but still felt busy because of the different types of work we were doing. When prices fall people will lock in their prices online as a ‘good thing’ when prices rise they will always seek advice to get the best price for them. ”
He said in his opinion that this year will be similar to 2022.
“There will be people who take advantage of the low cost of housing and buy first homes and are always active, I have noticed that many first home buyers (in 2022) had real expectations but two years ago what they wanted. the most they could borrow and the best house they could get.”
Carter heard of a few people downsizing or going out of business.
“This is not entirely due to the property market, however, we have difficult and expensive regulations that we have been working on for the past few years, and the deadline to sort everything out in March 2023. I think because of this it’s more. consultants are thinking about changes in their business than the property market.”
Sam Burnett from Mortgage Supply Co said that the number of loans in the industry has fallen, but he has experienced a significant increase in successful loans in 2022 – up 50 percent compared to 2021.
“This was due to the combination of many borrowers who are looking for help, and special additions to my team to help with this. For us 2022 we have the opportunity to give advice to a large number of consumers, and we know that people are looking for and taking this advice because the market has hardened.”
The biggest challenges are the implementation of the Credit and Financial Contracts Act and the increase in interest rates.
“I’m finding that the demand for construction loans has decreased – with current property values falling, and increased promotion to build prices. , people with existing homes tend to look for them instead of paying what they believe is a premium to build them. new.
“I believe this will balance out over time, but for now, I see less demand for construction through 2023.”
Changes in the price of Kāinga Ora’s first home along with lower house prices can mean opportunities for first home buyers.
“We work a lot with first-time home buyers and I believe 2023 will be even busier for us in this space.”
Burnett said the requirement to complete certification by March 2023 may see a few people opting to leave the industry but he did not think it would be a large number.
According to the main consultant of the Mortgage Center Jenny Zhou, despite a significant decline in the overall mortgage activity throughout the country the market has increased to a 98 percent approval rate.
According to him, it was not expected that the activities of the market will improve in 2023 in terms of buyers and builders.
“However, it is seen that the willingness of banks to lend has increased, and the current labor market remains strong. meaning higher family income and job stability. It is expected to help market activity especially when interest rates are high and inflation is under control.”
Zhou said they were humbled by the support from our local clients and consultants ”, especially in the current market where some consultants have decided to leave the business”.
A Kiwibank spokeswoman said there are specialist loan officers who are partnered with certified advisers.
Over the next 12 months, they are looking to increase the number of consultants they have worked with.
Consultants are paid a commission for services provided to clients.
”For consumers, going to a mortgage advisor reduces the need to talk to multiple banks to determine the products and services that best suit them. However, the advantage of dealing with their current bank, there will be home loan specialists with a deep understanding of the customer’s financial history that can supporting them at every step of their journey.”
“Although we don’t have exact numbers, we know that the consulting method is becoming increasingly popular with customers, which is why we are increasing the number of consultants we work with. We know that in the UK and Australia, more than 60% of loans come from referrals.”
They said that overall Kiwibank has seen a reduction in first home buyers and this should be noted in the market downturn over the past 12 months.
A spokesperson for ANZ said they have home loan coaches and give commissions to outside mortgage advisers or brokers when they arrange a customer loan.
“Currently the housing market is affected by the current economic environment, rising interest rates and delays in buying housing are some of the reasons. Typically, when the housing market slows down, loan applications also drop.”
BNZ chief banking officer Adam Ward said we work with a lot of foreign mortgage brokers, and like other banks, we pay them a commission after customers perform their services and choose BNZ for their home loans.
BNZ pays investors an initial commission and a trial commission to support the ongoing relationship between the customer, investor and BNZ.
”We offer all customers the same level of service and interest regardless of whether they work directly with us or through an external dealer.
“The number of loans has slowed down compared to last year, which is not unexpected in the economic environment where the cost of living and Interest is held by New Zealanders.”