Mortgage brokers are particularly exposed if the local property market flattens or drops, simply because mortgage brokers income is wholly determined by the value and volume of mortgage is they write.
A flattening property market means that the prices are not continuing to rise, which means that sellers are much more reluctant to put their house on the market. As a result there are a lot fewer houses to buy and therefore a lot fewer buyers. Certain sectors flourish in this environment, including high net worth property investors we will see a flat market as an excellent buying opportunity. To find great mortgage brokers in Hamilton click here. The lucky mortgage brokers who have these investors as clients will not be seeing any downturn, and in fact might see and update and their cash flow.
First home buyers may also flourish, or at least become a bit more active if they can see houses becoming a bit cheaper, but this will require the market to drop and not just simply prices flatten out, and this has not yet really occurred in New Zealand. For all that, first home buyers as a group are all desperate to own their own home and get on the property ladder, and if the financing environment has not changed drastically over the short term then there is really nothing to stop the first home buyers carrying on as per normal. It’s probable that the mortgage brokers servicing the first home buyer market not seeing that much of a downturn.
However there is also a very large active market of existing homeowners who are climbing the property ladder, and these will be more reluctant to put their own house on the market if it is unlikely that they will sell it in the short term. When looking for mortgage brokers in North Shore click this link. Anecdotal evidence is that an awful lot of homeowners are postponing the sale at the house for at least another year. This will be and deed hurting mortgage brokers, and it looks like the number of houses that have been bought and sold in the larger centres is around 50% of what it was this time last year.
In this environment most mortgage brokers will be hurting, although there will be a lucky few we work for the large companies that attract the Lions share of all business originating from the Internet. These countries generally get so much new business in the door (because they totally dominate the Internet search market) that they need to filter out everyone calling so they only take on clients where success is certain. In a tighter environment they will simply loosen their criteria a bit, and we’ll probably end up like processing around the same volume of mortgages.