Macquarie Mortgages Survey of Mortgage Referrers provides valuable insight into the Australian property market

09 February 2007

A comprehensive survey of more than 900 mortgage brokers, financial planners, accountants, legal practitioners and other mortgage referrers commissioned by Macquarie Mortgages Pty Ltd (‘Macquarie Mortgages’) late last year has provided important insight into the Australian property market.

The survey revealed a mixed but fundamentally positive outlook for 2007.  The survey indicated that:

• New business levels would improve after FQ 07
• Property prices would remain about the same for the next 12 months
• Property sales volumes were likely to fall significantly this year
• An increase in mortgage ‘stress’ and defaults is signalled

It was the third such annual survey commissioned by Macquarie Mortgages.

Head of Macquarie Mortgages Australia, Tim Brown, said the survey measured both the referrers’ views of their own business and their thoughts on the home loan market.

“In general, the survey reflects a healthy industry and an optimistic view, although there are some areas of concern.

“In particular, the survey reported an extraordinary 61.4% of respondents expecting to see the incidence of mortgage stress and defaults increasing this year.  This is up nearly 27% on the previous survey.

“However, to put this  into context,  responses to the survey were received in November following three increases in interest rates in the previous 12 months.  Since then, more benign inflation figures have lessened the potential for further interest rate increase.  My assessment is that some of those surveyed would not be quite as pessimistic today as they were then.

“For the same reason, interest rate concerns reflected in the survey – 47% of referrers believed that buyer concerns about interest rates would be the biggest challenge facing them in 2007 – should also be less of an issue today,” Mr Brown said.

The survey also indicated that:

• The quality of loans is largely stable
• As property prices rise, so are loan-to-value ratios
• Slow approvals by aggregators is an issue for more than a third of mortgage brokers
• There was an upswing in business in late 2006 for more than 40% of referrers with the state seeing the greatest increase over the previous three months being Queensland.  Interestingly, 47% of WA respondents reported a fall in business levels over the same period.

“The comparatively poor business figures in booming Western Australia tend to indicate a more stable phase in the property cycle for that state,” said Mr Brown.

Price continues to be one of the most important drivers in determining which lender a client selects. For 45.5% of respondents, this was the number one factor.

At the time of the survey, a significant 46.8% of referrers reported increases in the property prices for which they writing mortgages – up nearly nine points over the previous survey.

“The survey offers an excellent insight into the country’s property market,” said Mr Brown

“Referrers tend to be just as involved as real estate agents in the frontline of the property market and their input to this survey has been fundamental in providing information that is not reflected in statistics released by other sources.”

For more information, please contact

Tim Brown
Head of Macquarie Mortgages
Tel: (612) 8232 5402