Mortgage brokers an 'endangered species'

Sam Knowles

Mortgage brokers and real estate agents who rely on commissions will be hit hard by the sharp slowdown in the number of houses sold in recent months, says Kiwibank chief executive Sam Knowles.

Even banks who have developed large mortgage sales forces will have to consider downsizing because about 50 per cent of new mortgage business was based on real estate deals. "A large part of the market has disappeared with real estate activity declining," Knowles told interest.co.nz.

"All of the banks are going to have to significantly cut their sales capacity. You're probably likely to see it in the mortgage broker market. Some people are going to have to find new jobs."

Mortgage brokers would be hit particularly hard, he said.

"They must be struggling for their income, particularly with the movement away from trail commissions. All their income comes from the last sale in the door so their revenue must be down 50 per cent from a year ago."

- INTEREST.CO.NZ