CUA general manager, products and marketing Jason Murray, talks to MPA about the lender’s plans to expand its presence in the broker market
CUA general manager, products and marketing Jason Murray, talks to MPA about the lender’s plans to expand its presence in the broker market.
MPA: How do you expect 2013 to pan out in terms of property and mortgage demand?
Jason Murray: While there have been signs of an increase in demand for housing lending, this needs to be set against the current context of record low growth for housing lending. It remains to be seen whether the RBA rate cuts will stimulate demand, but overall we expect to see a fairly benign year in terms of demand for housing borrowing, but stronger than 2012.
MPA: Are there any regions or demographics that are exhibiting an especially strong demand for mortgages at the moment?
JM: We are not seeing any strong positive trends unique to any particular market, however over the last 12 months we have seen some encouraging signs of customers being prepared to look outside of the major banks. On the downside, the first homebuyer market appears to be struggling. This could be influenced by the changes to the NSW and Queensland first homebuyer assistance packages.
MPA: Where do you see the mortgage industry heading over the next few years?
JM: The broker channel is likely to become increasingly important to both borrowers and lenders. They currently look after around 40% of the market today and there are signs that this is growing. That is one reason why CUA is increasing its commitment to the broker market right now.
MPA: What are the biggest challenges that the mortgage industry faces at present?
JM: Housing loan growth is at an historic record low post-GFC, and all lenders are having to adjust to an environment with lower demand for the foreseeable future. A concentrated market with limited competition also continues to be a challenge for lenders and borrowers. The big four banks have well over 90% market share for residential owner-occupier and residential investor lending and have steadily grown that share over the course of the GFC. Also, entry into the market by first homebuyers is likely to become increasingly more difficult if and when interest rates and house prices start to rise once again.
MPA: Where do credit unions fit in the mortgage market? Is there scope for their share of the market to increase?
JM: Over the course of the GFC, the big four banks have actually grown their market share at the expense of other lenders, credit unions included. While credit unions continue to come under pressure, CUA is actually performing very strongly. We have grown our housing lending issue significantly above the market over the past 12 months and currently are the largest financial services mutual in Australia’s history – and we continue to grow.
MPA: What are your aims for CUA in terms of its participation in the mortgage market?
JM: We aim to provide Australians with an innovative alternative based on value and service to the major banks. We are also continuing to invest in transforming our customer channels to be more relevant in the way customers want to deal with us. We have implemented home loan specialists across our network, reconfigured and started to refresh our branch network to be more modern, fresh and retail focused, increasing our mobile bankers and continually developing our online, direct and mobile banking platforms. We also aim to continue to expand our presence in the broker market to widen our distribution footprint as more and more people choose to deal with a mortgage broker.
MPA: How do you rate CUA’s relationship with mortgage brokers and how can it be improved?
JM: We currently have strong relationships with three broker groups: Mortgage Choice, Smartline and LoanKit – all of these have been ongoing for a number of years. We value these relationships and are actively working to enhance our service proposition to make it easier for brokers to deal with us and improve their overall experience. This includes: building a broker sales team, including appointing a new national manager of broker sales and a team of six state-based business development managers who are tasked with building and maintaining local relationships; building a dedicated, internal broker support team; and increasing participation and presence at relevant industry groups and forums.
MPA: What is CUA’s key value proposition for mortgage brokers?
JM: We are a genuine alternative to the big four banks with a great product and service proposition supported by a dedicated broker sales and support team.
