Analysis: Packer enters mortgage market

Nasdaq-listed Zillow Group, of which Mr Packer holds a 9.35 per cent stake, announced last week that it has joined forces with Google in a partnership that combines the audience reach of the world's most popular search engine and the most visited real estate media network in the United States.

Zillow houses a portfolio of online home-related brands and has joined the recently launched mortgage comparison tool, Google Compare, allowing consumer access to Zillow's real-time mortgage rates and a range of lender ratings and reviews.

In a statement, Zillow said the integration allows all lenders who use Zillow Group Mortgages for their marketing efforts to now reach audiences across Google and Zillow Group's portfolio of consumer brands, which includes Zillow, Trulia, Hotpads and StreetEasy.

“Google Compare was developed to give consumers an easy way to understand and compare financial products online,” the statement said.

“Google has worked with a number of providers to provide a diversity of relevant results and purchasing options to users,” it said, adding that with the new launch borrowers searching for mortgage custom quotes on Google Compare for Mortgages will now have seamless access to Zillow's industry-leading real-time lender rates, reviews and ratings on both desktop and mobile devices.”

Zillow Group vice president of mortgages Erin Lantz said Zillow Group and Google share the same vision to empower consumers with comprehensive access to valuable information that helps them make more informed financial decisions.

"This partnership allows us the unique opportunity to help borrowers by providing them with the industry's most accurate, real-time information about home loans and mortgage lenders while simultaneously offering Zillow Group's lenders increased reach for their businesses,” Ms Lantz said.

In Australia, the online capabilities in residential mortgage lending have not been fully realised. An end-to-end solution is still some way off, although the emergence of peer-to-peer and marketplace lenders could speed things up.

The future of Australian lending and the role that new business models and disruptors will play in shaping the market are key themes in this year’s Australian Securitisation Forum, which continues today in Sydney.

In previous years, discussions about innovation and disruption have often concluded that the online channel is a threat to third-party or direct channels, or at least a competitor. Talk of bank customers demanding an ‘omni-channel’ experience have also prevailed.

However, with more and more Australians choosing a mortgage broker for their mortgage needs, we could soon see a shift in this line of thought, which places brokers at the centre of emerging business models and disruptors.

For example, online real estate listings giant REA Group’s move into the home loan space involves a strategy that marries the power of digital analytics and customer data with third-party distribution.

REA Group has an existing lead referral relationship with AFG.

After joining REA Group from Mortgage Choice, Andrew Russell commented that mortgage brokers will be a “cornerstone” of REA’s home loan strategy.

“The broker market is growing at a good speed and now represents around 50 per cent of home loans,” Mr Russell said.

“Consumers have put their hands up and said that they do want choice when it comes to accessing home loans so we expect brokers will be a cornerstone of our strategy.”

As groups like Google, REA Group, and James Packer-backed Zillow look to harness their respective digital powers to move deeper into the financial services space, brokers will also be tasked with positioning themselves to accommodate a new age of lending. Adaptability will be key. Particularly when digital disruptors begin offering home loan products.

According to former St. George Bank and Suncorp general manager of intermediaries Steven Heavey, in Australia, this is yet to happen.

“We have seen a few digital plays in the market but no one has really nailed it yet,” he said, noting that 80 per cent of consumers go online to research their mortgage options.

“Those brokers and lenders that can successfully marry data capture with a really good online and face-to-face experience will surge ahead.”

[Related: Major property group to enter mortgage market]