What do Australians in the market for a home loan really want? To answer this question, KPMG conducted a survey of ‘mass affluents’ to understand their customer experiences and preferences during their home loan journey and how they vary by demographics such as age, gender, and relationship status.
Since 2006 the median house price in Australian capital cities (where 67 percent of the population live) has more than doubled from $286,000 to almost $700,000. A similar story is true for units and apartments where median prices across capital cities has grown by 40 percent in the last ten years. Over the same period, Australian wages have grown at a much more modest compound annual rate of 3 percent. However, in spite of this climate, the great Australian dream of home ownership persists.
KPMG’s mortgage market survey, The Australian Home Loan Market – Winning the fight for customers, has found that for the majority of ‘mass affluents’ taking out a home loan is in their sights in the next two years.
More than 600 KPMG professionals earning between $70,000 and $250,000 per annum – falling into the ‘mass affluent’ definition – were surveyed about their views of the mortgage market and their future intentions.
Competition amongst Australian banks in home lending is particularly fierce at the moment. To maintain market share, banks are heavily discounting their front books. To abate this race to the bottom in home loan profitability, banks are increasingly trying to differentiate their value propositions on service, not just on price.
Across our banking clients we are seeing substantial sums of money being spent on improving the home loan experience of customers. We estimate that Australian financial institutions will spend over $250m in each of the next 2 years. But what do Australians in the market for a home loan really want?
Findings from the survey pose a number of key challenges that Australian financial institutions must address in order to win the fight for home loan customers. These include: