Mortgage brokers hit their highest ever residential home-loan market share during the first quarter of the year.

Mortgage brokers hit their highest ever residential home-loan market share during the first quarter of the year, with three in five borrowers opting to seek help from brokers for their home-financing needs.

The share of broker-originated loans approved in the three months ending in March increased to 59.7%, 4.4 percentage points higher compared to the same quarter last year, according to the latest figures from CoreLogic.

During the same quarter, the final report from the royal commission was released which recommended the banning of trail commissions. While the government initially supported all the recommendations by the royal commission, it backed away after a series of consultations with the mortgage broking industry and smaller lenders.

The growing market share of broker-originated loans could indicate the critical role brokers play in driving competition and in providing borrowers with assistance and solutions to access credit, Mortgage and Finance Association of Australia (MFAA) CEO Mike Felton said.

"The fact that customers have continued to vote with their feet during a period that coincided with the release of the royal commission’s final report also highlights the strength of this market share result and sends a strong message to policymakers as to the extent to which consumers value the greater industry experience and choice that mortgage brokers provide," he said.

Also read: Mortgage Brokers: friend or foe?

Downturn affects home-loan values

However, despite the robust broker market share, the overall value of lending through the channel was down by 11.39% or $5.25bn to $40.85bn year-on-year. Felton said this could be due to the downturn in the lending market — for the first quarter of the year, the total value of housing loans issued declined by 17.86% from $88.64bn to $72.80bn.

"This result clearly shows that mortgage brokers have been able to remain focused on their clients despite all the noise surrounding the industry and continue to deliver unparalleled service and choice to Australian consumers," Felton said.

This coincides with the recent figures released by the Australian Prudential Regulation Authority which showed that the number of home-loan approvals during the March quarter was down by 16.5%.

Positive for mortgage brokers

Despite the decline in the overall value of housing loans obtained through brokers, market watchers think the increase in the broker market share is a huge win, reflecting the importance of brokers in the home-lending market.

The mortgage broking industry contributes roughly $2.9bn to the Australian economy annually, according to a study by Deloitte Access Economics.

Also read: How mortgage brokers help first–home buyers

"These new figures highlight the significant contribution the mortgage broking channel delivers to the Australian economy, especially in the context of a weaker overall property market and at a time when tougher lending practices are at play and credit is restricted," industry watcher Susan Mitchell said in a think piece in Property Observer.

She said that brokers are crucial in helping borrowers navigate the housing market amidst affordability concerns.

"Brokers enable Australians to invest in property and secure the home of their dreams because they offer choice, expert advice and valuable services during the increasingly complex journey to home ownership," she said.