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Beginning
with extracts from consumer surveys recently commissioned
by Delliotte’s, Genworth Financial Services, Brand
Management Australia and JP Morgan, the following data
illustrates key aspects of consumer behaviour.
•
Brokers are currently used by 38% of first home buyers,
by 42% purchasing second or subsequent mortgage, and
by 55% who are refinancing. Interestingly, only 29%
of Adelaide mortgage borrowers used a broker compared
with the national average of 40%. Western Australian
has the highest broker usage at 46%.
•
Most common information sources used by mortgage borrowers
include: 51% first visit a bank internet site, 48% seek
the advice of a financial planner or accountants, 40%
consult a broker, with most consulting the general online
space. Specifically, young borrowers tend to rely more
on advice from family and friends and will normally
engage a bank first.
•
Of all borrowers seeking out a broker: 18% found a broker
using the internet, 19% had responded to advertising
and 36% were identified through a referral or a prior
relationship. 23% claimed to have identified a broker
through a combination of all these means.
•
The main motivations behind using a broker included:
57% user a broker to save time, 56% believed they would
get a better deal, 44% used a broker for the out of
hours convenience, 40% were seeking broker advice in
a confusing mortgage market, 37% expected a wider choice
of products, 37% expected specialist advice.
•
Loan product features consumers find attractive include:
50% looked for low rates and low fees, 44% sought flexibility
in their loan product, with most insisting on a reputable
brand of lender and internet access to their loans.
•
Bank mortgage customers are more likely to expect both
phone and face to face service, non-bank borrowers are
typically satisfied with phone service only, while credit
union customers prefer face to face service.
•
Main factors likely to motivate borrowers switching
from one lender to another are low rates and fees.
•
Of all those surveyed with current mortgage commitments:
43% are stretched to the limit, 39% are building a future
and 18% are looking to invest.
•
Of all first home and prospective first home buyers
interviewed; 57% used savings as their means of deposit,
25% lived with their parents to save a deposit, 66%
are still trapped in the rental trap while 15% were
unable to act without the first home owners grant. Average
age of first home buyer is 27 years.
•
Low dos lending continues to become increasingly common
as education about low doc credit access increases.
Approximately 39% of Australians are potentially low-doc
prospects.
•
Of the approximate 2,000,000 eligible Australian households,
only 31,500 currently have reverse mortgages.
•
Of all surveyed who used a broker, 92% claimed to be
satisfied.
Reported
next are the results of primary research commissioned
for this report. Considered were two research samples;
prospective first home buyers and existing mortgagees.
Given the consistency of results with previously reported
secondary data, only survey highlights have been included.
Full survey summary results are available at the end
of this section.
SAMPLE
A: Prospective First Home Buyers
Survey
sample included a cross section of income, prime &
sub prime prospects, residing in wide cross section
of Adelaide’s suburbs who were considering their
first home purchase.
•
20% of respondents had previously applied for housing
finance, unsuccessfully.
•
Top-of-mind recall for mortgage lenders revealed that
all respondents could recall the name of one lender,
92% two lenders, 76% three lenders, 47% four lenders
with 21% able to recall five lenders. Most commonly
recalled were the major banks and large brokers including
Acquired, Assured and Aussie with some mention of local
firm Bernie Lewis.
•
The most popular information sources for over 80% of
prospective buyers included their current bank together
with referrals from family and friends and the internet.
60% of those interviewed expected to consult and account
or advisor, and suggested that they would likely respond
to advertising.
•
Most important loan product features included; interest
rate, loan flexibility, extended terms, no-deposit options,
online loan access and alternative loan products designed
to bridge the affordability gap.
•
The most important broker attributes sought by this
group were assistance with comparing loan options and
same day approvals. This was followed by consultancy,
taxation and budgeting advice, the ability to deal with
the same person, access to accredited mobile lenders
and loan repayment coaching.
•
Approximately 85% of this group would prefer to see
insurances services available from their broker, 65%
indicated preference for the availability of coveyancing,
while 67% indicated an interest for wealth management
services.
•
Interestingly, around 40% of all respondents were unsure
about the cost and risk of non-bank mortgage products,
while 43% believed they were more suited to credit impaired
borrowers.
•
Not seen on competitor internet sites and preferred
by 25% of prospective first home buyers, were live chat
facilities.
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