Welcome to the fourth edition of Home Grown
Welcome to the 2013 Genworth Home Grown report; an overview of mortgage industry perspectives on trends in credit demand, borrower sentiment, channel distribution and innovation, as well as the outlook for the Australian market.
Home Grown draws upon quantitative surveys, in-depth interviews and workshop discussions held between August and October 2013, and offers insights on the mortgage industry from over 300 brokers, lenders and industry experts.
Setting the scene - challenges facing the mortgage industry
Over the last five years, what challenges do you believe
the mortgage industry has faced?
Lenders
Lenders
Brokers
Brokers
Major banks
Major banks
Non-major banks
Non-major banks
Mutuals
Mutuals
Non-banks
Non-banks
Total
Total

56%

62%

63%

54%

55%

55%

56%

Dealing with the impacts of regulation

50%

45%

25%

77%

52%

43%

50%

Weakness in the domestic economy

35%

43%

56%

23%

38%

33%

35%

Overcoming housing affordability issues

34%

49%

38%

35%

21%

41%

34%

Dealing with a fluctuating property market

33%

33%

19%

31%

45%

31%

33%

Slow credit demand
Outlook - challenges facing the mortgage industry in the next five years
Over the next five years, what challenges do you believe the
mortgage industry will face?
Lenders
Lenders
Brokers
Brokers
Major banks
Major banks
Non-major banks
Non-major banks
Mutuals
Mutuals
Non-banks
Non-banks
Total
Total

43%

26%

31%

46%

38%

47%

43%

Weakness in the domestic economy

37%

34%

44%

35%

41%

33%

37%

Dealing with the impacts of regulation

37%

45%

38%

35%

28%

43%

37%

Overcoming housing affordability issues

33%

17%

31%

35%

38%

29%

33%

Slow credit demand

24%

22%

38%

27%

24%

18%

24%

Threats from new entrants
Sentiment - mortgage industry developments
What generational change do you think will have the biggest
impact on the mortgage industry over the next five years?
Lenders
Lenders
Brokers
Brokers
65%
52%
15%
22%
10%
17%
0%
4%
10%
4%
The ageing population/people living longer
People wanting to live closer to the inner city
People living at home longer
People getting married later
Other
If state or federal government could make one change to benefit
the mortgage industry over the next five years, what would it be?
Lenders
Lenders
Brokers
Brokers
41%
30%
Remove/reduce stamp duties
11%
5%
Improve incentives to invest in property
11%
17%
Reinstate/increase incentives for FHBs
9%
6%
Provide access to cheaper funding
7%
6%
Boost rates of new home supply
7%
16%
Reduce regulation
5%
7%
Relax the ‘four pillars’ policy
4%
1%
Further improve credit reporting
3%
4%
Make it easier for borrowers to switch home loan providers
1%
2%
Reduce incentives to invest in property
Competition
What type of new entrant do you believe will have the biggest
impact on the mortgage industry?
Lenders
Lenders
Brokers
Brokers
Online
operators
31%
24%
Superannuation
funds
24%
24%
Overseas
banks
14%
7%
Peer-to-peer
lenders
14%
14%
Supermarkets
10%
31%
Other e.g.: Telcos and
whitelabel products
7%
0%
Over the next five years, would you say you are optimistic, neutral or pessimistic
about the prospects for the following types of lenders:
Lenders
Lenders
Brokers
Brokers
Brokers
Percentage of consumers comfortable with borrowing from lender segment
The ‘big four’ banks
59%
63%
66%
The regional banks
39%
59%
46%
The credit unions
27%
36%
44%
The building societies
16%
61%
43%
The mutual banks
24%
36%
39%
The online banks
66%
59%
37%
The foreign banks
16%
36%
29%
The mortgage managers
27%
61%
28%
The wholesale funders
29%
27%
19%
Distribution
Over the next five years, do you expect the volume of
mortgages sold via the following channels to increase:
Lenders
Lenders
Brokers
Brokers
Online
90%
65%
Mobile device
74%
50%
Broker
52%
86%
Mobile lender
43%
33%
Phone
34%
20%
Financial
advisers
25%
38%
Branch
10%
8%
Innovation
Over the next five years, how optimistic are you about the
level of innovation we will see in the mortgage industry?
Lenders
Lenders
Brokers
Brokers
11%
61%
10%
16%
2%
4%
35%
27%
27%
7%
Over the next five years, in which of the following areas do you think
it is most important that mortgage lenders innovate:
Lenders
Lenders
Brokers
Brokers
Product
development
30%
20%
Credit
assessment
28%
23%
Customer
analytics
19%
9%
Product
distribution
10%
9%
Borrower
servicing
10%
12%
Broker
servicing
4%
26%
Over the next five years, which of the following types of product
innovation/development do you think we are most likely to see more of:
Lenders
Lenders
Brokers
Brokers
48%
34%
‘Build your own’ home loans
40%
36%
Product packaging
31%
29%
Products for retirees
27%
26%
Products for first homebuyers
24%
22%
Shared equity products
22%
21%
Products for investors
19%
20%
More fully featured home loans
19%
33%
Products for self-employed borrowers
18%
34%
High LVR products
18%
14%
Longer term fixed rate products