Recently, in a report that should be required reading for all mortgage brokers in Rockingham, Lenders Mortgage Insurance (LMI) provider Genworth discussed the health of the mortgage market in Australia.
Since they are the leading LMI provider in Australia, their own financial health is dependent upon their ability to accurately read the mortgage market. The better they read the market, the better they can assess risk. Ideally, when they do their job well, everybody wins: lenders, borrowers and Genworth. Consequently, mortgage brokers in Rockingham now see their reports as valuable sources of information.
The November 2014 report comes from a combination of surveys of lenders, consumers, mortgage brokers and industry representatives. According to the report, the six most important concerns regarding mortgage industry health are: funding sources, cash rate setting, competition between lenders, government policy, consumer debt and the APRA (Australian Prudential Regulation Authority) regulatory position.
Key Findings
The key findings of the report were as follows.
Industry stakeholders think the health of the industry is good because the funding mix, cash rate, consumer debt and government policy are all appropriate for market sustainability.
The RBA’s cash rate setting continues to drive the market and keep it healthy.
The funding mix is considered to be the second most important driver and is seen to be “appropriate” for mortgage market health.
Government policy is seen to be the third most important factor. It is seen as mostly appropriate, but most agree that the government should provide first home buyers with more help.
Lenders are OK with the current amount of consumer debt but mortgage brokers tend to be more wary.
What We Think
We agree with these findings. We also believe that the market will remain healthy and continue to rise. That makes it very likely that those who decide to enter the property market now will see long-term capital gains.
Call Smartline Rockingham to learn more: (08) 9527 1800.
