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MFAA Prosper : Mortgage and Finance Brief 12
Mor tgage & Finance brief | 17 Credit licence update Since July 2011, ASIC has issued 6081 credit licences. 3900 of these had key person conditions, indicating that many of these businesses are “one man bands”. In its report to the Business Advisory Committee to the Real Economy in October, ASIC said 241 licensees operate as aggregators and 699 as mortgage managers. In the broking space there are 4560 mortgage brokers and 3964 finance brokers. Five hundred and sixty-four financial planners hold credit licences, showing the convergence between these services. In addition, 24 ,005 credit representatives have been appointed. In terms of location, the eastern seaboard is awash with credit service providers, with approximately 79% of licensees and credit representatives operating in Victoria, Queensland and NSW. Thirteen per cent of credit licensees operate in WA and another 6% are in SA, leaving Tasmania, the ACT and the NT to share the remaining 2%. Industry reacts to rate cut Brokers have welcomed the RBA’s decision to cut the official cash rate to 4.5% in November and are anticipating a much more active market over the next few months. Cameron Dunlop, Director of Premier Finance in Melbourne, is expecting the cut to stimulate the flat property market. “The cut will continue to put the thought of looking at refinance options front-of-mind for borrowers,” he says. However, he does not think further cuts are a foregone conclusion. The slowing European economy is a constant consideration across the board, so he expects the RBA to take a “wait and see” approach into 2012. Vicky Edema, Managing Director of Sydney-based Austral Mortgage Corporation, feels that, while a lot depends on Europe, the rate will be cut further over the next few months. “The current rate drop is obviously a positive move and will hopefully generate increased business over the coming months. It should instill some sort of confidence in consumers to get out there buying again,” she says. While homeowners are going to feel an easing in the market with most banks passing on the full rate cut, Edema sees continuing competition in the market as fierce. “I don’t see a lot of change, but I definitely think the competition is going to be pretty full on,” she says.
Mortgage and Finance Brief 11
Mortgage and Finance Brief 13