Rate cut provides an opportunity for brokers to deliver great customer outcomes.
Award-winning aggregator Loan Market said the timing of today’s historic RBA cash rate cut presented an opportunity for brokers to prove their worth to clients, regulators and the government.
Loan Market Executive Chairman Sam White said the cut - delivered only days out from submissions closing on the Federal Government’s review into a proposed Best Interests Duty for brokers - would further support the recovery of the property markets in spring.
Against the backdrop of legislative change, Mr White said brokers could prove their ability to deliver exceptional and bespoke outcomes for every client whilst juggling heightened demand.
“With the RBA’s move, today, debt serviceability has never been better in Australia,” said Mr White.
“At the same time getting a home loan has never been more challenging. Lenders have reacted very differently to interpreting messages that have emerged from the Hayne Royal Commission and as a consequence, we are seeing very different outcomes for our customers. For example, some of our customers will qualify for all of our lenders and some will only qualify for one lender.
“Brokers have never worked harder, showing their value to the customer, navigating the complex Australian home loan.”
Mr White said the low-interest-rate environment fueled increased buyer activity.
“Activity in the property market - particularly in Sydney and Melbourne - has risen considerably over the last quarter and today’s decision by the RBA will further propel interest.
“Over the last quarter, brokers have been in-demand. Today, the industry has the opportunity to show the marketplace, regulators and Canberra that it can deliver the great customer outcomes for their clients’ short, medium and long-term objectives while managing higher volumes,” said Mr White.
Today’s 25 basis point cash rate takes the official cash rate to an unprecedented 0.75%.
According to data from Domain, 78% of properties auctioned in Sydney on Saturday sold under the hammer. The same clearance rate was recorded in Melbourne, albeit with a small volume of properties being auctioned, as per the tradition of AFL Grand Final day.
Mr White also predicted investors would make a return to the market on the back of the cut.
“Banks are increasing their focus on investors and property is a recovering asset class, particularly in the larger markets.”