Economic indicators good for brokers

The most recent economic indicators showing a boost in confidence in Australia is good news for brokers, according to the Finance Brokers Association of Australia (FBAA).

The NAB business conditions index rose almost 14 points to a record high of 21.1 points in October, while the ANZ/Roy Morgan consumer confidence rating increased by 2 per cent to 114.8, its highest point in seven weeks.

“These indicators show that there is confidence in the local economy across the board,” said FBAA executive director Peter White.

“That’s encouraging for mortgage brokers because it points to consumers feeling more optimistic about the outlook in this country.”

Mr White said even though there was a very slight drop in households’ sentiment about their own finances, there was a 1 per cent increase in their willingness to spend on major household items.

“As their confidence in the economy increases, they feel less pessimistic about their ability to make financial commitments such as taking on mortgages, or refinancing existing loans and that’s where brokers can play a prominent role.”

He said with more consumers choosing to deal with a broker rather than directly with a bank, there is increasing scope for mortgage brokers to help borrowers enter the property market, but with a caveat.

“I urge brokers to make sure the loans they write are not unsuitable for borrowers and that they meet their financial circumstances.”