NZ mortgage adviser market share will reach Australia's 50%, says Squirrel chief

by Maya Breen09 Nov 2015
Squirrel Mortgage's CEO John Bolton says he expects New Zealand's market share to reach 50% in time as adviser market share is only rising. 

“I think we’ll certainly end up at 50% but I think beyond that would be pretty challenging when you think our market is dominated by a small number of large lenders," Bolton told NZ Adviser.

Patrick Marion, CEO of Australian franchise Citiwide Homeloans, has said Australia's mortgage broker market share, which currently sits at just over 50%, could hit 70% in the next five to ten years. 

Marion told NZ Adviser's sister publication Australian Broker that increased consumer confidence is driving demand, which is also a focus of the industry's associations in New Zealand as the Financial Advisers Act is under review and improving levels of consumer confidence is under the spotlight. 

"The more confidence we give people that they'll be dealing with good advisers the better," says Bolton. "It was a very unregulated industry for years whereas now it's a lot more professional.

"With all of the banks now using brokers including BNZ to a degree and Kiwibank to a lesser degree, it means that there is a much clearer message out in the market whereas previously some lenders weren't using advisers, so that threw an element of doubt."

Bolton says 70% seems like an unrealistic figure even for Australia and a huge stretch for New Zealand, where the first job is to reach 50% share of the market.

"In the context of our market, we don't have the breadth of lenders or the market size that they've got in Australia. The simple fact is the New Zealand mortgage market is dominated by only four or five major lenders, whereas in Australia they've got lots of white label lenders and more choice. 

He says the higher brand differentiation in Australia pushes more business through the mortgage adviser channel versus New Zealand where it is still tightly contained. 

"I think our market is quite different to Australia...it doesn’t really share a lot of the same characteristics. The real thing for us is getting from 40 to 50%."

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