{"id":10999,"date":"2024-01-08T10:01:00","date_gmt":"2024-01-07T23:01:00","guid":{"rendered":"https:\/\/brighten.com.au\/resources\/media-centre\/affordability-and-serviceability-will-continue-to-bite-in-2024-brighten\/"},"modified":"2024-01-12T10:11:02","modified_gmt":"2024-01-11T23:11:02","slug":"affordability-and-serviceability-will-continue-to-bite-in-2024-brighten","status":"publish","type":"media-centre","link":"https:\/\/brighten.com.au\/zh-hant\/media-centre\/affordability-and-serviceability-will-continue-to-bite-in-2024-brighten\/","title":{"rendered":"Affordability and serviceability will continue to bite in 2024: Brighten"},"content":{"rendered":"\n<p>Publication Date: Monday, 8 January 2024<br><em>This article originally appeared in <a href=\"https:\/\/www.theadviser.com.au\/growth\/45279-affordability-and-serviceability-will-continue-to-bite-in-2024-brighten\">The Adviser<\/a><\/em><\/p>\n\n\n\n<p><em><strong>There are three main mortgages themes that will dominate 2024, the non-bank lender\u2019s head of sales has forecast.<\/strong><\/em><\/p>\n\n\n\n<p>Chris Meaker, the head of sales at non-bank lender Brighten, has suggested that there will be three key themes impacting the mortgage news this year.<\/p>\n\n\n\n<p>Speaking to The Adviser, Mr Meaker flagged that the mortgage market had been through a period of \u201cchange and uncertainty\u201d in 2023, with&nbsp;Australian brokers, lenders, and advisers all having done well to remain resilient.<\/p>\n\n\n\n<p>While he said that resilience had been made easier by high property prices and borrowers \u201cremaining surprisingly steadfast in their ability to make repayments despite the interest rate environment\u201d, he suggested that brokers will need to continue to monitor housing market trends to ensure they\u2019re delivering \u201cbest-in-class advice to clients\u201d in 2024.<\/p>\n\n\n\n<p>He said that one main theme arising this year will be the buoyancy of the property market, but noted that while economists from the big four banks predict a rise in house prices of between 3 and 5 per cent \u2013 the pace of this may vary across the country.<\/p>\n\n\n\n<p>\u201cWhile some capital city markets look likely to reach record-high prices \u2013 some predict that Sydney will see growth of between 6 and 9 per cent for houses \u2013 there may be declines in other areas,\u201d he said.<\/p>\n\n\n\n<p>\u201cFactors continuing to drive up housing prices include the ongoing housing supply shortage, which has no clear path to resolution in the short term. Our population continues to grow, putting extra pressure on demand. Federal and state incentives like the Help to Buy scheme starting in 2024 and Queensland\u2019s doubling of the first home buyer\u2019s grant will further boost demand.\u201d<\/p>\n\n\n\n<p>However, Mr Meaker added that&nbsp;CoreLogic\u2019s 2024 outlook, showed that there may be a slowdown in the high-end capital city markets and lower overall transaction volumes. The high-end slowdown may even cascade down to more affordable market segments if households continue to experience financial pressures.<\/p>\n\n\n\n<p>\u201cGiven this uncertainty, all of us in the mortgage industry must remain on top of \u2013 and responsive to \u2013 news about what\u2019s happening in the economy. Lenders may have to adjust policies to reduce risks and brokers must keep up to date with these adjustments,\u201d he said.<\/p>\n\n\n\n<p>\u201cMaintaining an up-to-date understanding of housing market trends will also allow brokers to offer best-in-class advice to clients, even those who may need help with negative equity or repayment difficulties.\u201d<\/p>\n\n\n\n<p>A second hot-button topic for 2024 will continue to be<strong>&nbsp;<\/strong>serviceability and housing affordability, the head of sales said.<\/p>\n\n\n\n<p>\u201cProspective home buyers are now required to allocate 46.2 per cent of their income to service a new loan on an average home \u2013 6 per cent more than last year and 17 per cent more than in March 2020 during the early stages of the pandemic when interest rates were at 0.1 per cent,\u201d he said.<\/p>\n\n\n\n<p>Noting that while some economists believe we may have already hit the cash rate peak, others said there may be one more to come.<\/p>\n\n\n\n<p>Either way, the market expects there will be a pause in rate movements in 2024, which means most existing home owners will likely face the peak cash rate for most of 2024.<\/p>\n\n\n\n<p>\u201cIn that case, reduced borrowing capacity will remain an ongoing concern, potentially exacerbating unequal access to home ownership,\u201d he said.<\/p>\n\n\n\n<p>\u201cFrom a lender\u2019s perspective, we need to maintain responsible lending practices and mitigate risks to borrowers and the economy. On the other hand, it is more crucial than ever to enable home ownership opportunities for ordinary people.<\/p>\n\n\n\n<p>\u201cIndustry stakeholders have been advocating for broader and more meaningful discussions regarding changes that may combat serviceability issues. For example, there have been suggestions that flexible serviceability buffers, adaptable to changing economic conditions, could be a solution to the \u2018mortgage prison\u2019 phenomenon, enabling trapped borrowers to explore more affordable options.<\/p>\n\n\n\n<p>\u201cThe mortgage industry will have a crucial conversation in 2024 about shifting serviceability dynamics and what they mean for housing affordability.\u201d<\/p>\n\n\n\n<p>A third and final theme he expects to dominate in 2024 will be the role of brokers.<\/p>\n\n\n\n<p>He said: \u201cThe only thing I\u2019m certain about in 2024 is the high degree of uncertainty for both borrowers and lenders.<\/p>\n\n\n\n<p>\u201cTough markets \u2013 like the one we faced this year \u2013 mean tight borrowing capacity and a greater need for good advice. These are both perfect reasons to use a broker. Instead of walking into a bank and being presented with one solution, a client using a broker will have access to 50+ products and policies and the full range of choices that presents. This is not to mention the invaluable advice they could receive on how a property fits into their financial future.\u201d<\/p>\n\n\n\n<p>Citing the recent&nbsp;<em><a href=\"https:\/\/www.theadviser.com.au\/broker\/45217-broker-loyalty-maintains-strength\" target=\"_blank\" rel=\"noreferrer noopener\">Consumer Access to Mortgages Report<\/a><\/em>, partnered by the FBAA, Mr Meaker emphasised&nbsp;that over 83 per cent of broker clients would use a broker again for assistance with a future mortgage.<\/p>\n\n\n\n<p>\u201cBroker market share is increasing and is currently at 71.5 per cent of all new residential home loans. I expect this to increase to over 80 per cent in the next few years. Most businesses could only dream of those NPS scores,\u201d he said.<\/p>\n\n\n\n<p>Mr Meaker thanked brokers for helping borrowers \u201cnavigate the challenging lending environment in 2023\u201d and for offering invaluable advice on what property ownership means for clients\u2019 financial futures. He said he looked forward to working closely with the broker channel moving forward.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Chris Meaker, the head of sales at non-bank lender Brighten, has suggested that there will be three key themes impacting the mortgage news this year.<\/p>\n","protected":false},"author":1,"featured_media":5536,"menu_order":0,"template":"","meta":{"_acf_changed":false},"categories":[35],"tags":[],"class_list":["post-10999","media-centre","type-media-centre","status-publish","has-post-thumbnail","hentry","category-media-centre-zh-hant"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Affordability and serviceability will continue to bite in 2024: Brighten | Brighten<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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