Australian Broker 17.24

DECEMBER 2020 ISSUE 17.24

YEAR IN REVIEW COVID-19, a recession, bushfires and floods – 2020 threw up some monumental challenges.

We asked industry leaders to look back on the year and at how 2021 is shaping up /14 ALSO IN THIS ISSUE… Big deal How Ray Ethell helped a fi nancial adviser consolidate his debt /20 Real estate spotlight Darwin’s house prices are rising faster than in other capital cities /26 Tech partnership to speed up loans Finsure Group has partnered with fintech illion Open Data Solutions to provide a new integrated service for brokers /22

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Brokers take on bankers in cricket The inaugural Bankers vs Brokers Twenty20 cricket match in Perth raised funds for the McGrath Foundation /23

Restoring brokers’ confidence Wealth Today’s Keith Cullen suggests brokers hard-hit by regulation changes should diversify the services they offer /25

In the hot seat From restaurants to fi nance: GM Capital Solutions director Andrew Soo /30

9/12/2020 11:01:04 AM

NEWS

IN THIS SECTION

Lenders SME doomsday scenario just scaremongering, says Prospa /04

Aggregators Earlypay announces new distribution partner /06

Market Brokers record highest-ever market share /10

Industry bodies Board makeover for CAFBA as it looks to the future /12

Technology Effi adds new features to CRM to help brokers /08 Australian Broker will be taking a break from 19 December to 3 January. Our first edition for 2021 will be published on 25 January.

Merry Christmas and a Happy New Year to all our readers and advertisers.

www.brokernews.com.au DECEMBER 2O20 EDITORIAL

SALES & MARKETING

Editor Antony Field

Publisher/Sales Manager Simon Kerslake

News Editor Madison Utley

GLOBAL WATCH How is the mortgage and broking world responding to the COVID-19 pandemic overseas?

Here’s your snapshot of the news that matters most in North America

U.S. MORTGAGE DELINQUENCIES AT LOWEST LEVEL SINCE MARCH mortgage delinquencies in the US continued to improve in October, buoyed by widespread foreclosure moratoriums and record-low interest rates that pushed prepayment activity higher. A Black Knight representative said its monthly mortgage loan performance report contained “pretty much good news all around this month, though mostly of the slow-and-steady-wins-the-race variety”. The report showed that the number of seriously delinquent mortgages – loans 90 or more days past due – declined by 64,000 month-over-month to 2,259,000 in October. However, volumes remained more than five times (over 1.8 million) higher than pre-pandemic levels. The national delinquency rate fell to its lowest level since March, down to 6.44%. Month-over-month, there were about 105,000 fewer past-due mortgages in October.

SERIOUS

Production Editor Roslyn Meredith

ART & PRODUCTION

Global Head of Media Marketing Lisa Narroway

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HOUSE PRICES ACROSS U.S. RECORD HIGHEST QUARTERLY GAIN house prices posted their strongest quarterly gain in the history of the Federal Housing Finance Agency (FHFA) House Price Index in Q3 2020. The FHFA reported that prices climbed 3.1% in the third quarter of 2020 and were up 7.8% from Q3 2019 to Q3 2020. This is the 37th consecutive quarter of growth. Seasonally adjusted, the House Price Index was up 1.7% from August to September. “Relative to a year ago, prices were up 7.8% during the quarter – the fastest year-over-year rate of appreciation since 2006,” said FHFA deputy director of research and statistics Lynn Fisher. “Monthly data indicate that prices continued to accelerate during the quarter, reaching 9.1% in September, as demand continues to outpace the supply of homes available for sale.”

US

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SLOWER LENDING GROWTH LIKELY TO HIT CANADA BANK PROFITS loan growth brought about by the COVID-19 pandemic could cause SUBDUED Canada’s largest banks to suffer significant drops in their Q4 profits, according to industry analysts. The declines are projected to be as large as 20% annually. The estimated 4% drop from Q3 levels will also be the third consecutive quarterly decrease, Reuters reported. Deposit growth recorded by Canada’s ‘big six’ banks was 14% annually in September, after reaching a record-high $4.3trn at the end of July. The stockpiling of over CA$170bn in surplus cash by Canadian households and businesses contributed to a 26bps annual decline in Q3 interest margins for the big six, said National Bank financial analyst Gabriel Dechaine. This will further drop by “low single digits” during the fourth quarter.

2

This magazine is printed on paper produced from 1OO% sustainable forestry, grown and managed specifically for the paper pulp industry Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Australian Broker magazine can accept no responsibility for loss. Australian Broker is the most-often read industry publication, according to independent research carried out by the Ehrenberg-Bass Institute for Marketing Science at the University of South Australia in December 2008. The research also found that brokers rate Australian Broker as the best for both news content and feature articles, followed by sister publication MPA. Overall, on all categories, Australian Broker ranks top followed by MPA. The results were based on a sample of 405 respondents who were the subject of telephone interviews.

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9/12/2020 11:04:53 AM

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9/12/2020 11:14:27 AM

NEWS

LENDERS BUSINESS LOAN APPLICATIONS

NAB STALWART STEVE KANE RETIRES FROM BANKING

Source: Equifax Quarterly Consumer Credit Demand Index, Sept 2020

has announced the retirement of its broker distribution general manager, Steve Kane. His career in banking and finance spans over 30 years, with the past decade plus spent in various senior positions within the NAB Group. “My career in financial services has been a fantastic journey where I’ve met many amazing people who work with passion for their customers and colleagues,” Kane said. Nicole Triandos will fill the vacant role on an acting basis while a recruitment process is undertaken.

NAB

44.8% NT

-6.7%

WA

-11.2%

SA

QLD -8.0%

NSW -12.7% ACT -0.5%

VIC -22.2%

FINTECH’S ‘NO FEE’ LOANS A CROWD-PLEASER fintech lender that launched a new personal loan product without fees has reported “very positive” feedback from brokers and aggregators.

NOW Finance is confident its removal of establishment, account-keeping and early repayment fees will cause waves. CEO Richard Blumberg said it would improve the transparency and simplicity of personal loans. “Brokers have been surprised that this is a permanent product change and not just a special,” he said.

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A

“My career in financial services has been a fantastic journey where I’ve met many amazing people who work with passion for their customers and colleagues” Steve Kane General manager of broker distribution, NAB

AUSTRALIAN SMALL BUSINESSES WILL PULL THROUGH — LENDER Claims that many SMEs will go under once government financial support is withdrawn are just ‘scaremongering’, says the co-founder of Prospa concern that a large number of Australian small businesses are destined for immediate failure when the government’s direct support measures cease has been “blown out of proportion”, according to Prospa co-founder and chief revenue officer Beau Bertoli.

He said it was crucial to examine the support offered to SMEs, both on a state and federal level. It was clear that businesses were not being kept out of administration artificially in any kind of lasting way.

“State governments have THE

been doing things for industries that have been hit really hard. They are wonderful payments, and it’s great to see that support, but if you’re an industry really impacted – for example, hospitality – you may have been eligible for a $5,000 or $10,000 grant,” Bertoli said.

“When you’re running a business doing $2m a year in revenue and you have $1.8m in expenses, $10,000 is a very small amount of money relative to the size of your business.”

Providing JobKeeper to help businesses cover the costs of carrying employees was crucial during lockdown, he said, and as restrictions

have largely eased, SMEs have started moving back to full capacity. In September, SMEs grew their revenue at an aggregate level of about 5% – the first time in the year that data indicated a return to growth.

Bertoli said the government had “tapered” its support in the right way, assisting businesses even while scaling back direct stimulus. Its recent budget underpinned job creation and maintenance, with states chipping in to assist. NSW included payroll tax reductions in its budget. He believes these initiatives will “keep moving us forward”.

While some industries were still under “extraordinary pressure”, Bertoli expects that local and state governments will step in and offer support next year. “But saying there’s going to be a massive failure when the [direct governmental] support falls off, that’s just scaremongering,” Bertoli said.

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9/12/2020 11:15:07 AM

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9/12/2020 11:15:43 AM

NEWS

A G G R E G AT O R S MORTGAGE EZY JOINS BUYERS CHOICE PANEL Buyers Choice has welcomed Mortgage Ezy to its lender panel, meaning Buyers Choice brokers can access Mortgage Ezy’s specialty loans, such as its SMSF offerings, owneroccupier mortgages and construction loans. “The Mortgage Ezy team are known for being fast with their assessment and responsive in their approach. We see this as a win for our clients as they will have access to a niche range of product, highly competitive rates and flexible loan solutions,” said Buyers Choice CEO Brett Mansfield.

AGGREGATOR

FBAA WELCOMES PURCHASE OF THREE AGGREGATORS news that Loan Market Group has moved to acquire three NAB-owned aggregators – PLAN Australia, Choice and FAST – has been welcomed by the FBAA. The association’s managing director, Peter White, sees the shuffle as “good for [the] industry” as he believes it will contribute to the sector’s future expansion.

“Finance and mortgage brokers should be encouraged because this investment highlights the confidence the market has in our sector and the potential for growth,” White said.

THE

EARLYPAY PARTNERS WITH COMMERCIAL FINANCE AGGREGATOR SME lender Earlypay has entered an agreement with COG Financial Services that gives it access to the aggregator’s extensive broker distribution network SME lender has unveiled its new partnership with Australia’s largest aggregator and asset broker for commercial finance.

CML Group, relaunched recently as Earlypay, has entered an agreement with COG Financial Services Ltd. COG, an asset finance broker and aggregator that holds 16.3% of CML’s shares, can now help facilitate CML product supply arrangements through the aggregator’s broker networks.

COG director Stephen White has been appointed to the CML board. He has more than 30 years’ experience in investment banking, including roles as a significant risk manager, financial AN

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products broker and adviser.

“The CML team looks forward to working with COG brokers to offer its finance solutions to SMEs, and anticipates an opportunity to expand business volumes across all products,” CML CEO Daniel Riley said.

Earlypay is designed to help get SMEs in urgent need of working capital the finance they are after, and to do so quickly, despite their deteriorated credit quality.

The group used its acquisition of fintech Skippr in July to enhance its operating capabilities and digitally transform its product offerings, with technology that integrates seamlessly with accounting software and automates processes,

broadening the SME market that Earlypay can service.

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The “more technologically integrated, streamlined” offering will be made available to SMEs through COG. Riley expressed excitement over the group’s new direction.

“The digital transformation that underpins Earlypay’s new invoice financing product makes the product the most flexible, accessible and easy-to-use option for brokers to recommend to SMEs seeking to access working capital,” he said.

“The average SME in Australia has one third of its revenue tied up in outstanding invoices and is waiting nearly 60 days to be paid, so we designed Earlypay to provide them with a line of credit that is highly flexible and can be utilised in line with sales volumes.”

“The CML team looks forward to working with COG brokers to offer its finance solutions to SMEs and anticipates an opportunity to expand business volumes”

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9/12/2020 11:16:19 AM

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9/12/2020 12:08:03 PM

NEWS

TECHNOLOGY

BROKER PLATFORM WIDENS LENDER’S MARKET REACH has forged a deal with online broker platform Lend Capital as part of its efforts to expand its market reach and provide the SME sector with more flexible financing options. Lend Capital’s growing finance broker network will be able to offer Fifo Capital’s range of working capital, trade and invoice financing options.

Bill Baker, CEO of Lend Capital, said the partnership also meant Fifo Capital would be able adopt the group’s artificial intelligence and algorithm-based technology.

FIFO CAPITAL

FINTECH CONSUMER LENDER CELEBRATES $1BN IN LOANS fintech offering personal and car A loans, Plenti is celebrating passing the $1bn milestone in loans originated, and being the first fintech consumer lender to reach that mark. CEO David Foggo said its broker relationships and broker distribution, as well as propriety tech platform Venus, were a “vital component” of the “momentous achievement”. “We have driven record loan originations for four consecutive months ... despite the pressures all consumer lenders are facing in a subdued economic environment.”

“One of the biggest challenges brokers using our portal faced was their [customers] weren’t filling certain forms out properly on the CRM” Vy Huynh Relationship manager, Effi

8

EFFI ADDS TWO TECH UPDATES AHEAD OF FINALISING CRM New tech tools have been integrated into the fintech’s CRM to help brokers streamline their communication with customers before the system is fully updated in 2021 technology firm Effi has announced the development of two new sophisticated product updates for its customer relationship management system – Consumer Portal Impersonation and Calendar Sync.

Effi is gearing up for its final few product updates ahead of the imminent release of the final version of the CRM in early 2021.

The announcement follows the launch of Effi’s email marketing automation tool in September, and the formation of the Mortgage Broker Tech Council in October, as well as the hiring of two new executives.

“One of the biggest challenges brokers using our portal faced FINANCIAL

was their clients [or customers] weren’t filling certain forms out properly on the CRM,” Effi relationship manager Vy Huynh said. “The brand-new Consumer Portal Impersonation tool hopes to eliminate this issue and further streamline their communications and support for their clients.”

The Consumer Portal Impersonation tool allows the broker to see what their customer is doing in real time, answer any questions they may have, and troubleshoot for them in real time on the site. Brokers can easily assist their customers with filling out their details and more using the tool.

“In addition to the Consumer

Portal Impersonation tool, we’re also delighted to have added a Calendar Sync feature,” said Huynh. “This new feature automates the scheduling of meetings for brokers and their customers, further reducing the need for brokers to coordinate their calendars and reduce their admin time.

“Brokers can set times and dates they are available for meetings, how long they are available for, set a minimum notice time for meetings and customise their working hours.

In turn, customers can click a personalised link per broker with broker business branding and set their appointments with them.”

Huynh said the two new features had been developed to further add to Effi’s holistic offering as the “best possible mortgage broking platform in Australia”.

The final version of the Effi CRM is predicted to be released in early 2021.

www.brokernews.com.au

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9/12/2020 11:17:58 AM

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9/12/2020 11:18:33 AM

NEWS

MARKET BUYERS’ MARKET PREDICTED FOR 2021 housing market has shifted quickly in the last quarter, with prices now rising across Australia’s capital cities and buyer sentiment surging, according to property buyers platform BuyersBuyers.com.au. Chief operating officer Pete Wargent said he expected a strong 2021 with more and more investors coming back into the market. RiskWise Property Research’s Q4 2020 Risks & Opportunities Report forecast strong house price growth in 2021, ranging from 4% to 8% for Perth to 8–12% for Sydney and Melbourne.

THE

BUSINESSES BOUNCING BACK AFTER PANDEMIC survey has found that nearly half of the country’s businesses are doing as well, if not better, than they were before the COVID-19 pandemic hit Australia in March. The November Sensis Business Index revealed that nearly a third of businesses (30%) say they are back to pre-pandemic levels, with a further 12% saying they are “well ahead”. Tasmania is leading the pack with 21% of its businesses “well ahead” of pre-COVID-19 levels. WA and Queensland came in at 15%, NSW at 11% and Victoria at 7%.

A

BROKERS NOTCH UP RECORD SHARE OF HOME LOAN MARKET More and more people are turning to brokers for help with their home loans, and the sector has recorded its highest-ever market share data shows that the mortgage broker channel settled 60.1% of all residential home loans over the July to September 2020 quarter – its highest-ever market share result.

The new benchmark is 0.4 of a percentage point higher than the previous record of 59.7% in March 2019, according to a report from research group Comparator (a CoreLogic business), commissioned by the MFAA. The 2020 September quarter result is 5.2 percentage points higher than the same period in 2019 and 1.0 percentage point higher than in 2018.

NEW

MFAA CEO Mike Felton applauded brokers for supporting their customers – and the economy – “when they were needed most”.

“This phenomenal market share result reflects the tireless support and assistance brokers have provided their customers to help them navigate the challenges posed by the COVID-19 pandemic and the first recession Australia has experienced in 29 years,” Felton said.

“It is also evidence of the everincreasing trust and confidence that consumers are placing in mortgage brokers as our industry faces the imminent introduction of a best interest duty and related reforms.”

Total new settlements in the September quarter reached the largest-ever dollar value, as leading aggregators settled $57.47bn worth of new home loans – an increase of 24.82% on the $46.04bn settled in September 2019.

Loan Market executive chairman Sam White welcomed the result, coming ahead of the launch of BID. “Today’s news that industry market share has hit a historic high is a fantastic indicator of the hugely valuable service mortgage brokers offer to everyday Australians,” he said.

“Customers turn to their brokers when they need information fast, and we’ve seen this in play throughout COVID and all of 2020.

“After this date, customers will have a clear choice: deal with a broker who is obligated to work in the client’s best interest or deal with a bank employee who isn’t.”

“This phenomenal market share result reflects the tireless support and assistance brokers have provided their customers to help them navigate the challenges posed by COVID-19” Mike Felton CEO, MFAA

HOUSE PRICE GROWTH FORECAST F0R 2021 Source: Q4 2020 Risks & Opportunities Report, RiskWise Property Research

Sydney

8–12%

Melbourne

8–12% 6–10%

Brisbane and SE Queensland Perth

10

4–8%

Adelaide

5–8%

Canberra and ACT

5–8%

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9/12/2020 11:19:03 AM

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23/03/2020 9:24 AM 9/12/2020 11:19:33 AM

NEWS

INDUSTRY BODIES

NEW TRAINING COURSE ON REVERSE MORTGAGES FBAA now has a training course to ensure its members can handle reverse mortgages and equity release products. FBAA managing director Peter White said education was key to the industry’s integrity in this area, with the Banking Code of Practice prioritising the protection of elderly borrowers.

The Seniors Equity Release/Reverse Mortgage Course, run by AAMC Training Group, is mandatory for all FBAA members working in this space.

It is open to non-members too.

THE

DEFERRED HOME LOANS DROP SIGNIFICANTLY borrowers have returned to making their monthly mortgage repayments. Data released by the Australian Banking Association shows the number of deferred loans fell below 300,000 in November, dropping nearly 70% from several months ago.

At the peak, more than 900,000 loans were deferred. Of those, 803,000 were deferred by the seven largest banks, reaching a total value of $250bn in June.

That figure is now $86bn. ABA CEO Anna Bligh said it showed the economic recovery was gaining momentum.

MORE

“[CAFBA] is starting to see this next group of younger leaders come through, with the Women in Finance forums we’ve got and our young professionals group CLYP” Matthew Atkin President, CAFBA

12

CAFBA FRESHENS UP, BRINGING NEW MEMBERS ON BOARD The long-serving CAFBA president and company secretary have stepped down from their roles, signalling a major renewal of the association’s board Commercial & Asset Finance Brokers Association of Australia (CAFBA) has recently undergone some big changes, voting in a new president, vice president, treasurer and company secretary.

CAFBA’s “founding fathers”, president David Gandolfo and company secretary Terry Moody, decided not to renominate this year, to allow for new talent and fresh ideas. They will continue to serve as CAFBA patrons, with Gandolfo as chair of the CAFBA Advocacy Committee and Moody chairing the Education Council.

They have “passed the baton” to new president Matthew Atkin (from Atlas Broker), vicepresident Domenic Lo Surdo (from Stamford Capital), company secretary Ian Elkner THE

(from Centrepoint Finance) and treasurer Sharon Piening (from The 500 Group).

Atkin has served as CAFBA vice-president for the past three years.

“I am very much looking forward to growing the association as the most relevant for commercial finance brokers.

There is always so much more to do,” he said.

The new board will meet this month to set CAFBA’s direction for the next three years.

“There are a couple of really important things we can continue to build on from what the previous boards have done, while also maintaining relevance through building our education out.”

Atkin is excited about ramping up the Education Council

and pursuing partnerships with universities, promoting commercial broking as a compelling career.

Another element is fostering inclusion and diversity.

“We’re starting to see this next group of younger leaders come through, with the Women in Finance forums we’ve got and our young professionals group CLYP [Commercial Lending Young Professionals],” said Atkin.

“We now have three women on the board and two people under 40. CAFBA needs to look like the society that we service.”

CAFBA welcomed new board members Max McFarlane from Skyward Financial and Rebecca Mansfield from Loan Market. McFarlane set up CLYP, while Mansfield has been heavily involved in the women’s networking forums.

Other members of the CAFBA board are Neil Ferguson from Ledge, George Karam from BF Money, Renee Tocco from Loanezi and Mike Steel from RLA Finance.

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9/12/2020 11:19:59 AM

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9/12/2020 11:20:26 AM

FE AT URES

SPECIAL REPORT

LOOKING BACK AT 2020 It has been an incredibly tough 12 months for brokers affected by a pandemic, natural disasters and ongoing regulation. Australian Broker spoke to industry leaders to get their thoughts on 2020 and what lies ahead

almost impossible to sum up 2020, but if there was one word to describe the past 12 months, it would be tumultuous.

The year started with bushfires and floods, which devastated many parts of Australia. Then, while affected residents and businesses were still trying to recover, COVID-19 hit, forcing widespread lockdowns and sending the economy into meltdown.

At the height of the pandemic in June, almost 500,000 home loans, or nearly one in 10 mortgages, as well as over 200,000 small business loans, were on a six-month deferral plan. By October, Australian Banking Association figures showed that almost half of home loan borrowers and 41% of SMEs had resumed payments.

But this year’s crisis has demonstrated the resilience, adaptability and innovation of brokers, lenders and aggregators.

They have used technology to communicate with clients and colleagues, helped customers experiencing financial difficulty, and stayed abreast of market trends, government stimulus and regulations.

The property market didn’t collapse as some predicted. It has remained buoyant, with low interest rates, rising house prices, investors returning, and more businesses reporting they are back to pre-COVID levels.

IT’S

COVID-19, bushfires and floods “Australians are incredibly resilient – bushfires, droughts, famine and floods are natural disasters that we combat regularly,” says Renee Tocco, a director on the Commercial & Asset Finance Brokers Association of Australia (CAFBA) board and managing director of Loanezi.

But COVID-19 was a curveball with widespread impact, she says.

“It resulted in stringent isolation measures and enforced business and border closures, which will have lasting effects on our economic 14

stability and our mental fortitude.”

Tocco says COVID-19 brought the board and CAFBA members closer in many positive ways.

“We increased our digital footprint with more online activity, online events and webinars and more active engagement with our members.

“We actively sought feedback from our members about industry issues, being their collective voice to lobby for required changes during these critical times.”

MFAA CEO Mike Felton says 2020 was a year like no other, beginning with fires and floods and then the

impact of COVID-19 resulted in an increased desire for security and reassessment of risk appetites, which encouraged CAFBA members to facilitate funding for their clients.

“Lending was encouraged through government-backed loans and other initiatives, but the exclusion of industry sectors, location-based considerations and major changes to credit matrixes resulted in decreased loan approvals,” Tocco says.

“Fortunately, some of these stringent measures have relaxed since the initial response, with more accessibility for our members to help

“Our focus remained on moving at pace to support our customers and communities, including our broker and aggregator partners” Renee Blethyn, national partnerships manager, Suncorp pandemic, all while the MFAA was preparing for the introduction of the best interests duty and conflicted remuneration reforms.

“While this year has thrown up almost constant adversity for brokers and the MFAA, I am proud to say our focus remained on finding new ways to further improve customer outcomes,” Felton says. “Our members rose to the challenge, assisting vulnerable customers during regulatory changes, natural disasters, and customer distress caused by a global pandemic and recession.

“Customer support was selflessly provided when brokers and their loved ones were dealing with their own vulnerabilities. This year, customers have needed brokers’ support more than ever before as they sought to access mortgage deferrals, refinance existing loans or otherwise navigate an extremely difficult period.”

Tocco says the grave and immediate

their clients.”

Suncorp Bank national partnerships manager Renee Blethyn says the bushfires that ravaged Australia were deeply traumatic and dangerous for communities and emergency services.

“The impact was devasting, and Suncorp was there for our customers and communities every step of the way, from providing support to helping our customers rebuild their lives once it was safe to do so,” she says.

Suncorp’s insurance team deployed national resources, while the bank’s financial relief package was made available to affected customers.

Blethyn says COVID-19 created an incomprehensible level of uncertainty across Australia.

“Suncorp rallied to provide customers with the support they required … this included providing financial relief assistance for business and personal customers as well as

reducing interest rates for home loan and small business customers.

“Our focus remained on moving at pace to support our customers and communities, including our broker and aggregator partners.”

Suncorp removed all accountkeeping fees for its personal and business transaction deposit customers in March.

Brokers, lenders and aggregators played an integral role in supporting customers during 2020, Blethyn says.

“They provided advice to help their clients navigate their own individual circumstances, while balancing their own changing circumstances, including reduced face-to-face client interactions.

“With more people spending time in their homes and many people adapting to make sure it suits their changing requirements, the role of home lending has never been so important.”

Suncorp launched a confidential health and wellbeing assistance program for FBAA members and family members, as well as the MFAA mental health program, Accidental Councillor.

Thinktank CEO Jonathan Street says that while the floods and bushfires were devastating, by far the greatest impact on financial services has been, and continues to be, COVID-19.

“Brokers have been significantly leant on by borrowers to provide support and solutions for everything from lost or reduced employment and income to emergency finance and restructuring, to being a facilitator of rapid business expansion alongside home renovations and upsizing,” he says.

Lenders had to grapple with “previously unseen levels of hardship”, the orderly supply of credit, adjustments to products and credit policy, and government stimulus packages, while aggregators helped ensure brokers and lenders

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Renee Blethyn, national partnerships manager, Suncorp

worked effectively to best service borrowers’ needs.

“The coordination of effort and delivery between all parties has paved the way for the economic recovery we are now seeing and also for the way property markets have held up, which is testament to how effectively SMEs in general have been supported,” says Street.

At Prospa, co-founder and chief revenue officer Beau Bertoli says small businesses didn’t face a tougher period than 2020, but “we are seeing a faster and stronger bounce-back than anticipated”.

“We acted quickly as the pandemic hit and provided over 5,500 relief packages to customers at the peak,” he says. “This has now reduced by 70% as more SMEs get back on track.”

Businesses now have the confidence to make repayments, and Prospa’s data shows customers are adapting to the new normal.

“Our lending was up 265% quarter-on-quarter as SME sentiment and demand for credit improves,” Bertoli says.

NAB executive, commercial broker Chris Thomas says 2020 has been one of the most challenging years, but brokers have once again proved extremely resilient.

“The COVID pandemic has strengthened broker-customer relationships as borrowers and SMEs look to brokers as trusted advisers to help them navigate through the crisis,” Thomas says.

“The latest MFAA figures reveal 60.1% of mortgages are now being written through brokers. This is a clear indicator the third party channel will continue to be a viable and significant component of the future mortgage landscape.”

Loan deferrals are an important facet of NAB’s support for customers, with more than 110,000 home loans paused during COVID-19. Now, over 90% of customers are getting back on their feet or have said they will not

John Mohnacheff, group sales manager, Liberty

need deferrals.

NAB supported SMEs and broker customers through its business loan deferral program and was also involved in the federal SME Loan Guarantee scheme.

Aaron Milburn, Pepper Money general manager mortgages and commercial, says the entire industry “can be justifiably proud of how they banded together” to support those most affected by bushfires, floods and a global pandemic.

“Whether people were refinancing, rebuilding or recovering, they were simply looking to understand their options and improve their situation,” he says. “Mortgage brokers worked overtime helping their customers and rose to the challenge admirably.”

During lockdown, Pepper’s activities shifted to ensuring families could stay in their own homes, “educating customers about the benefits of speaking to their lender early about their unique situation”,

Aaron Milburn, general manager mortgages and commercial lending, Pepper Money

with brokers to fulfil their customers’ needs and ensuring appropriate applicants received the funding they needed to meet their objectives.

“We quickly established a dedicated Hardship Assistance Team to help borrowers who were financially impacted by COVID-19,” he says.

This included options to defer loan repayments; waiving fees and charges where there was demonstrated hardship; and offering temporary interest-only periods to assist with cash flow and/or debt consolidation to make repayments more manageable.

“La Trobe Financial also donated $1m to the Epworth Hospital for additional ICU equipment to cope with the anticipated influx of COVID-19 admissions during the pandemic,” Bannister says.

“This doubled down on our $1m donation made in January of this year for bushfire relief.”

Finsure Group CEO John Kolenda says the broking industry has had

“Lenders and brokers pulled together to find ways to not only help customers through these challenging times but also support their financial wellbeing” John Mohnacheff, group sales manager, Liberty and to a focus on digitisation, such as online calculators and forms.

“Brokers were busier than ever, and Pepper was proud to lead the industry in honouring all trail payments for customers affected by the pandemic,” says Milburn.

“This move provided much-needed certainty and confidence about their own position, while helping others.”

At La Trobe Financial, senior vice president and chief lending officer Cory Bannister says the non-bank lender remained open for business throughout COVID-19, working

to respond to the structural shift in consumer behaviour in 2020 brought about by the pandemic.

“As an industry we have adjusted well to the changing consumer expectations, such as video meetings rather than face-to-face contact,” he says. “We have shown how resilient and adaptable we can be to changing circumstances.”

Finsure had benefited from its merger with BNK Banking Corporation Limited two years ago, with the group recently announcing that its loan book had surpassed

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NSW EYES STAMP DUTY REFORM NSW politicians reached a “newfound political unity” over the need to approach stamp duty reform with an open mind in the face of the pandemic.

MAJORS DETAIL THEIR COVID-19 SUPPORT PACKAGES The big four banks each announced significant COVID-19 support packages for small business and home loan customers, even though only ANZ cut its variable home loan rate following the RBA cash rate cut of 0.25%.

GET READY FOR A LENDING BOOM In an effort to inject an “adrenaline shot” into the economy, the government is set to abolish lending laws imposed on banks during the GFC.

FIVE THINGS TO KNOW ABOUT VICTORIA’S STAMP DUTY DISCOUNTS Victoria passed down its 2020/21 state budget, revealing a host of support measures intended to stimulate the housing market and building industries, including stamp duty discounts of up to 50%.

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Cory Bannister, senior vice president and chief lending officer, La Trobe Financial

$50bn, and boasting a broker network that’s nearly 2,000 strong.

“We have achieved outstanding results against the backdrop of the massive challenges of the coronavirus pandemic, and we are on track to settle over $18bn for FY21.”

While Finsure staff worked from home temporarily, Kolenda says communication with the broker network was maintained through regular Zoom meetings, and training was provided via webinars.

Liberty group sales manager John Mohnacheff says the strength and resilience of brokers, lenders and aggregators in 2020 “has been nothing short of spectacular”.

“Across the board, lenders and brokers pulled together to find ways to not only help customers through these challenging times but also support their financial wellbeing,” he says.

“Liberty has demonstrated its true strength as a lender, as well as unwavering dedication to the financial wellbeing of our customers.”

COVID-19 caused a major industry shake-up, Mohnacheff says, but the effects were nowhere near as dire as first predicted.

“If anything, the economic stress has put a spotlight on how valued the work of a broker is, and how vital it is to have access to flexible lending options,” he says.

Brokers helped customers 16

John Kolenda, CEO, Finsure Group

consolidate debt and refinance homes and investment properties, with nearly one in 10 Australians refinancing their existing mortgage in the last year. Several lenders also recognised the need for a more tailored approach – something Liberty pioneered, says Mohnacheff.

“Working on a case-by-case basis, we have been able to provide the

DocuSign and Simpology’s LoanApp for customer and broker signatures.

“Most lenders and aggregators moved towards online education and digital PD days. These have seen huge attendance, and we expect the trend to continue,” Brown says.

In June, Advantedge hosted a webinar for brokers on its end-to-end digital functionality – part of the

“[Brokers’ market share] will continue to grow further in 2021 and follow other international markets, which are over 80%” John Kolenda, CEO, Finsure Group support customers need to stay on top of their finances, while helping them to improve their long-term financial position.”

Technology With every crisis comes opportunity, and that’s certainly the case with social distancing and lockdowns forcing the industry to use technology for communication and loan processing.

Advantedge general manager Adam Brown says social distancing accelerated the path to digital mortgages with the adoption of digital collection of ID, and tools such as

‘Simpler for the Better’ proposition and the white label home loan company’s aim to “place digital capability and simplification” at the heart of everything it does.

Brown says COVID-19 forced brokers and lenders to widely adopt Zoom and Microsoft Teams video conferencing for communication, and it is here to stay.

“The key opportunities for brokers are continuing to service existing clients, and the ability to broaden their customer base. Brokers can now have clients interstate and communicate digitally.”

Mohnacheff says the pandemic led to the industry exploring exciting new ways of working, embracing a range of tech tools, such as video conferencing, to ensure the same standard of service was delivered regardless of location.

“Liberty BDMs have taken this one step further, creating personalised video messages for brokers to ensure they felt supported and encouraged throughout the year,” he says.

Liberty also introduced digital customer VOI options to help brokers keep up with increased demand.

This was well received by the lender’s business partners, as it allowed them to support customers while working remotely.

Digital transformation can be a game changer for brokers, says Bertoli.

“With cloud-based software, video conferencing and changing expectations on client communication, brokers can run a national business from their own home office,” he says.

The pandemic also provided new opportunities for fintechs like Prospa.

“SMEs remain amongst the most dissatisfied customer segment with traditional bank offerings, yet a majority still use their bank account for business banking.”

Bertoli says that over the past few months more consumers and SMEs have started to embrace digital products and services.

“Lenders like Prospa have always provided a seamless customer experience and great service, and I think brokers will find this becoming more important than ever for their clients in 2021.”

At the MFAA, Felton says the pandemic drove the development of tech solutions for customers to solve problems caused by lockdowns, and created new ways for brokers to streamline their services.

“We helped our members navigate the rules on face-to-face contact and the lender requirement that brokers conduct interviews and ensure VOI in person,” he says.

“By seeking legal counsel and engaging the MFAA’s Lender Forum, regulators and associations, we helped remove obstacles to digital VOI and digital signatures.

This has been an excellent – and overdue – innovation for brokers and customers.”

Tocco says CAFBA also welcomed the adoption of more technology, video conferencing and

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remote working as a positive shift for the industry.

“In support of the digital revolution, CAFBA will offer increased educational support for the future of technology and the associated cyber risks for our members,” she says.

Milburn says it’s fantastic to see the whole industry embracing e-docs and identity verification technology, changing interactions with customers for the better.

“It has fuelled an increased desire to better understand the customer journey, what causes effort in the relationship, and to ensure that the customer’s interests are protected every step of the way.”

The industry had also been challenged to strengthen customer protection through cybersecurity investment as cybercriminals use new methods to infiltrate businesses and customer data, Milburn says.

La Trobe Financial was already well underway with its remote loan writing strategy before the lockdowns began in March, says Bannister.

“Over the past few months, we have focused our attention on refining the broker user experience to make it more streamlined from lodgement to settlement.”

He says La Trobe Financial has been successfully using IDyou and ZipID for its digital VOI, DocuSign for loan docs, and DigiDocs for mortgage docs for several years. It is also the first lender in Australia to access Valocity’s time-saving custom-built Commercial Property Valuation Platform.

Video conferencing has also meant that many businesses have now become borderless, Bannister says.

“We feel this is a great opportunity for brokers to expand their business reach by accessing clients in other states.”

A rapid increase in digital execution and settlement was a huge factor this year that produced better broker and borrower experiences, says Street. Added to this has been remote video interaction.

“We’ve probably all had more than enough of Zoom, Teams and WebEx for now, but there really has been no option but to embrace online engagement, and it’s here to stay.”

Regulation Best interests duty was the phrase on everyone’s lips in 2020 as brokers prepared for the introduction of

Renee Tocco, director, CAFBA

BID, and many in the industry are welcoming the requirement that the consumer’s best interests be placed at the forefront of residential lending.

Felton says that from 1 January “customers will have the comfort of knowing that all brokers will operate under BID, providing yet another compelling reason to use a broker”.

“While BID is on balance a positive, given where this legislation could have ended following the

Adam Brown, general manager, Advantedge

on its broader legislative response to the royal commission, including remuneration changes; reference checking protocols; information sharing on misconduct; reporting and remediating misconduct; enforceable industry codes; and the establishment of a compensation scheme of last resort. It also made a submission to Treasury in response to the release of draft legislation on consumer credit reforms.

“Brokers can now have clients interstate and communicate digitally” Adam Brown, general manager, Advantedge Hayne royal commission, we [the MFAA] still focused heavily on ensuring we limited adverse impacts or unintended consequences for customers as legislation was passed and regulations were developed.”

Felton says the key to the successful implementation of BID is its postponement till 2021.

“We made the case not as an excuse to delay but to ensure the industry was not placed at risk by having to focus on new legislation when brokers’ focus needed to be on vulnerable customers.”

The MFAA also spent significant time working with the government

The proposed changes, Felton says, should improve efficiency, removing unnecessary barriers to the flow of credit to consumers and small businesses, while creating faster turnaround times.

In CAFBA’S view there is nothing in the BID changes that should affect commercial brokers, Tocco says, with the legislation replacing responsible lending with BID. “CAFBA embraces this as a positive step for best customer outcomes,” she says.

“We welcome the removal of responsible lending obligations on consumer brokers, replacing them

with BID, and appreciate that this only applies to consumer finance and the recognition that business finance is not part of this legislation.”

BID is simply an opportunity to refine existing practices, rather than overhaul the lending journey they take a customer on, says Milburn.

“Many brokers have taken the introduction of BID in their stride, educating themselves about the upcoming changes throughout the year and preparing themselves for any new processes they need to implement in 2021,” he says.

Bannister says La Trobe Financial expects the impact of BID on brokers to be neutral as the majority already operate to this standard. But the effect on the broker industry should be extremely positive.

“This may be the catalyst for 70%-plus market share in the short to medium term, as brokers can now say to their customers, ‘I must act in your best interests as I am obliged to by law’, and this is something the banks cannot say,” says Bannister.

Mohnacheff agrees that most brokers already adhere to BID, and the law simply formalises this.

“These changes provide a great opportunity to remind us of the importance of accurate paperwork,” he says. “When completing applications, be sure to take your time and remember to include all www.brokernews.com.au

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notes and documentation. Do it once and do it right.”

Liberty’s BDM team is working closely with brokers to prepare for BID and the related ban on conflicted remuneration. Mohnacheff urges brokers to review their existing record-keeping system and consider improvements where needed.

Finsure Group expects brokers to quickly adapt to BID, Kolenda says, with the change set to further increase their market share, which is at an all-time high.

“It will continue to grow further in 2021 and follow other international markets, which are over 80%,” he says.

To prepare for BID, Kolenda says Finsure is helping brokers comply by unlocking more features in its game-changing CRM, Infynity, which streamlines workflow and automates time-consuming tasks.

“Brokers are free to build their own processes into the system and choose which applications or services best suit their business, all under their own brand,” he says.

Street says that if the government is successful in amending responsible lending laws, he expects there will be some meaningful efficiency gains in the loan application process and speed of approvals, but banks and non-banks will continue to “lend responsibly”.

As for BID, he says it’s appropriate to support the interest of borrowers and place a level of accountability on finance intermediaries. But, if not applied efficiently and sensibly, it could turn into an “excessively onerous task on brokers and borrowers”.

“Getting the balance right without overburdening everyone involved is going to be essential,” says Street.

Blethyn says that in the midst of the pandemic brokers continued to adapt to changing regulations, such as BID. “This initiative will result in a large degree of changes for brokers but will also build consumer trust and reinforce the broker’s role in acting in the best interest of their customers,” she says.

Brown says the whole premise of BID means product selection is no longer just about price, “it’s about ensuring brokers are choosing the right product for their customers”.

This is where white label products come in: he says customers have an increasing appetite for these and Advantedge has grown to take the majority of market share.

As for the winding back of 18

responsible lending obligations, Bannister says lenders will continue to act prudently and appropriately, so the effect will be neutral in terms of credit availability and quality.

“We can expect a faster time to approval by taking a less granular approach to verification, importantly without compromising credit quality.”

Government support The wide range of government assistance measures at federal and state levels certainly helped keep the economy going in 2020.

Tocco says CAFBA applauds the government’s financial incentives, with JobKeeper and the instant asset write-off having a profound impact on its members and SMEs. “Our [former] president, David Gandolfo, is doing great work with the government to shape policy, encouraging investment while working with regulators and lenders to ensure that access to capital meets the government’s policies to invest and keep the economy moving,” she says.

Mohnacheff says the government’s economic response to the pandemic has been strong, with the SME Guarantee Scheme providing muchneeded support for many businesses.

“As one of the first non-bank lenders to take part in the scheme, we have seen first-hand how vital this support has been to many local businesses.”

JobKeeper had also been a saving grace for many Australians, says Mohnacheff, with reports suggesting one in five people would have lost their jobs without it.

He also praised HomeBuilder as “far exceeding expectations”, with nearly 15,000 applicants looking to take advantage of the $25,000 grant.

Bertoli says it’s great to see the government prioritising support for SMEs through tax and investment incentives, such as the instant asset write-off, payroll tax relief and even the stimulus vouchers in NSW. “We also welcomed the government’s decision to support fintech innovation by updating earlier plans to scrap research and development incentives and offering additional support. Innovation is essential for driving economic growth,” Bertoli says.

From Thinktank’s perspective, Street says JobKeeper has been the standout among federal and state initiatives that, combined, have allowed Australia to get through the

health and economic crisis in much better shape “than we believe was likely or even possible”.

SME and specialist lending Brokers were more active and open to helping people in specialist lending this year, which bodes well for 2021, Milburn says.

“If I were to invite 20 people to a barbecue, the odds are high that one or two would be considered a specialist customer,” he says.

“A broker would want to help that person if it was their friend or family member. So we’ve found they’re far more open these days about spending time on specialist customers.”

Milburn says the way people earn income is changing, and these customers might need a near prime or specialist solution the next time they want a loan, and “brokers are the channel of choice for them to find it”.

Bannister points to three themes in the specialist lending space that have been accelerated by COVID-19: persistent tightening of bank acceptance criteria (which caused confusion and uncertainty for brokers and approval delays for consumers); consumers increasingly choosing brokers for their mortgage needs;

CHANGE IN DWELLING VALUES ACROSS AUSTRALIA Source: Core Logic

November

September–November

Past 12 months

0.4%

0.3%

3.7%

Melbourne

0.7%

-0.4%

-0.9%

Brisbane

0.6%

1.5%

3.2%

Adelaide

1.3%

3.4%

5.3%

1.1%

1.9%

0.8%

Hobart

1.4%

2.9%

5.6%

Darwin

1.9%

4.7%

5.9%

Canberra

1.9%

3.3%

7.0%

1.4%

3.1%

7.0%

Regional Vic

1.3%

1.8%

4.5%

Regional Qld

Sydney

Perth

Regional NSW

1.6%

3.2%

6.0%

Regional SA

1.1%

2.1%

6.4%

Regional WA

1.1%

1.0%

-4.8%

Regional Tas

2.0%

3.0%

10.7%

Regional NT

0.7%

0.3%

1.3%

Combined capitals

0.7%

0.7%

2.4%

Combined regions

1.4%

2.8%

5.7%

0.8%

1.1%

3.1%

Australia

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Beau Bertoli, co-founder and chief revenue officer, Prospa

and the rise in non-banks.

He says brokers’ use of non-banks rose from 2.2% in 2014 and peaked at 9.6% in 2018 before the banks’ aggressive home loan strategies pulled back market share.

“So, not only do we have the thrust of borrowers choosing brokers, we have brokers choosing NBFIs [non-bank financial institutions] for their tailored, empathetic solutions.

We expect NBFIs will play one of the most important roles in the mortgage lending space over the next three years,” Bannister says.

Mohnacheff says there has been a notable increase in demand for specialist loans as more Australians face financial uncertainty or look for greater flexibility.

He says SMEs were among the hardest hit by the pandemic, and they needed the help of specialist lenders to meet their evolving needs.

“We are seeing a high number of brokers gravitate towards this space to find new ways to help SME customers flourish and prosper,” says Mohnacheff.

Street says Thinktank experienced a significant surge in brokers and SME borrowers seeking residential and commercial alt-doc solutions as the year progressed, while demand for SMSF finance continued its unbroken climb.

“The speed and convenience of non-conforming lending is definitely here to stay and continues to gain in popularity,” he says.

Banks have always found it difficult to assess SME credit risk efficiently, Bertoli says. Prospa had adjusted its risk appetite due to COVID, but its data-driven credit decision engine and deep insights into SMEs enabled it to continue lending.

“We have the flexibility and the technology to make smart lending decisions, looking at over 450 data points and with a response and

Mike Felton, CEO, MFAA

funding possible in 24 hours,” Bertoli says. “Throughout COVID we’ve seen businesses in essential services, health, e-commerce and home renovations trading well and looking for funding.”

Looking ahead So that was the tumultuous year 2020. Expectations for the property market and continuing industry growth for brokers, lenders and aggregators in 2021 are high.

Felton is confident and looking even further ahead to 2022.

“We continued to prepare for the significant review of broker remuneration that is coming in 2022,”

Jonathan Street, CEO, Thinktank

hard work and professionalism of everyone in our industry and our association, the way brokers have overcome the challenges this year, and maintained their focus on customers, has been nothing short of inspirational. Our industry is in good hands,” says Felton.

Street says that while Thinktank shared others’ concerns in early March to late June, it has since become very confident about the present state of the finance industry and the future.

“The adaptability and flexibility demonstrated by all of the key players when it really mattered is something everyone should be immensely proud of,” he says.

“Customers will have the comfort of knowing that all brokers will operate under BID, providing yet another compelling reason to use a broker” Mike Felton, CEO, MFAA he says. “While this will be a serious review, I believe we are well placed as an industry to face this scrutiny.

“Everything the MFAA has done this year in advocating for strong and meaningful regulations and reforms will stand us in good stead as we face a full review by the Council of Financial Regulators and the ACCC to assess the impact of regulatory changes and the implications for consumer outcomes in 2022.”

Felton says the industry will need to demonstrate that its reforms are assisting in managing conflicts and have improved customer outcomes.

The industry is well progressed towards implementing the new rules on 1 January, including BID. “While I am always proud of the

Looking ahead, the continued use of intelligent digital services such as robotic automation, artificial intelligence and operational excellence means Thinktank’s relationship managers will have more time to add value for brokers and their customers by workshopping deals and providing education and training programs.

Milburn sees huge potential in 2021 to bring brokers and lenders closer together through greater integration via APIs (application programming interfaces).

Pepper Money is improving document management through technology such as e-docs, but there’s still a key role for optical character recognition (OCR) and AI. “The game changer next year is not

a single technology in isolation but the ability for brokers and lenders to construct a better experience for their customers, using all the technologies that are available – from AI to mobile experience, from API-based services to robotics and OCR,” says Milburn.

Bannister expects the pandemic to be non-linear and that economic reverberations will continue for at least the next two and a half years.

“We know that Australians are incredibly resilient; however, sometimes they do need help through difficult periods. This is where we anticipate a further increase in demand for non-bank loan funding.”

Bannister called the federal government’s temporary modification of the Corporations Act to allow the execution of documents electronically an industry game changer.

“We would hope that this becomes a permanent change, following a successful experience over the past six months, that allows the industry to continue to digitise and move with speed in relation to property transactions.”

Kolenda says, “Even if we get a vaccine, COVID has permanently changed the way we live and interact.”

But he believes brokers’ adaptability will hold them in good stead as they continue taking a larger share of the mortgage market.

With continued government support, Kolenda says the economy should see increased activity, with interest rates remaining low for at least the next three years.

“We expect property prices to stabilise and then increase over the coming years, with the responsible lending changes helping to support consumers,” he says.

Tocco is optimistic that, once border restrictions are eased, stability in the business sector will improve.

“Onwards and upwards 2021!” she says. AB www.brokernews.com.au

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PEOPLE

Have an interesting deal?

Have a particularly difficult or interesting deal? Why not share it with us? Email:

antony.field@keymedia.com

BIG DEAL Ray Ethell, managing director of Non Conforming Loans, had to call on his years of broking experience to assist a client who needed to consolidate debt to meet his loan repayments or risk losing his licence as a financial planner THE FACTS

Client Self-employed financial adviser

Loan size and term $1,525,000 on a 25-year term

Goal To consolidate debt and reduce monthly repayments

Location Sydney

20

Aggregator Finsure

He was also unaware that debt negotiation was a service available in the market for people in his situation.

We provided him with a solution without any judgment or prejudice, and a way forward.

THE SCENARIO

The client runs a financial planning business under a Pty Ltd structure and was a licensed credit representative in his own right, along with being a financial planner. Yes, there is some irony in this.

His turnover had reduced and his personal expenses had increased due to his focus needing to be on his family during a difficult period. Once the tallying was completed, he had $176,000 in personal debt via lines of credit, credit cards and personal loans. The client had been repeatedly knocked back by every lender he could find in trying to refinance these debts against his property.

Like most small businesses in this situation, the client needed to free up cash flow in order to regrow his business but was being held back by the need to service all this debt, with no end in sight.

He was also facing pressure on his professional financial planning career because, in the event of a default, he would have been at risk of losing his licence to practise financial planning.

The client was stressed and feeling shame as a result of his debt position spiralling. He felt some embarrassment, unnecessarily in our view, as a result of his predicament. The client’s situation was spiralling towards defaults and possibly court proceedings, and this was giving him a great deal of stress.

He mentioned on a few occasions that even though he was a qualified and registered broker and financial planner he was unaware that loan products like the one we proposed were available.

Lender Non Conforming Loans (near prime product)

THE SOLUTION

After completing a preliminary assessment and obtaining a valuation upfront, we needed to work through the parameters of both servicing and reducing the new loan to meet loan-to-valuation ratio restrictions due

on negotiated payouts, the loan was processed through our Non Conforming Loans white label product.

At settlement, the client ended up paying out $62,000 to settle his $116,000 in unsecured debt, a saving of $54,000. In the process he reduced his overall debt repayments by more than $2,186.66 per month (or $26,239.92 annualised).

To consolidate all of the client’s debts we had to negotiate with creditors so the new loan would meet the maximum of one year for refinancing and servicing, saving our client $54,000 and a further $2,000 a month in repayments.

The client’s objective and requirements were to achieve this without any impact on his Equifax credit file as a result of the debt negotiation.

We were able to do this as per the client’s request. As a result, he saved $54,000 and has now been refinanced back to a prime loan and is still giving valuable financial advice to his clients.

THE TAKEAWAYS

At Non Conforming Loans we understand that the majority of our clients have complex scenarios and that thinking outside the box is crucial when looking for a lending solution.

We open the door to solutions that our customers did not know were possible and help our clients navigate

The client was facing pressure on his career because, in the event of a default, he would have been at risk of losing his licence to practise financial planning

Ray Ethell Managing director, Non Conforming Loans

to a lower valuation than expected.

We isolated $60,000 in debt to be paid out in full as these facilities would need to be kept open to support future business growth. We then targeted the remaining $116,000 for informal debt negotiation.

The $60,000 in ‘paid in full’ debt was necessary not only for future business needs. Also, negotiating on these debts required an informal arrangement so it did not impact the client’s credit file as this would have been disastrous had it occurred.

Once all information was available

what they feel best meets their requirements and objectives.

Non Conforming Loans prides itself on being the go-to lender for customers who are under duress, and we treat each client with respect, dignity and empathy.

We are well versed in highly complex lending solutions for near-insolvent and severely credit-impaired individuals, as well as in debt negotiation with creditors, dealing with trustees, and bankruptcy legislation.

Our basic mission statement is simple: we are here to help find our clients a solution. AB

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22/10/2020 3:59:17 PM 9/12/2020 11:24:50 AM

TECHNOLOGY UPDATE

NEW DATA PARTNERSHIP TO SPEED UP LOAN APPROVAL TIMES

Simon Bednar, General Manager – Aggregation, Finsure

Finsure Group has partnered with financial technology company illion Open Data Solutions to provide a new integrated service for brokers within its Infynity CRM platform.

Finsure general manager – aggregation Simon Bednar says the partnership will make it easier for brokers to integrate illion Open Data Solutions’ BankStatements platform (bankstatements.com.au) into its offering to customers, resulting in significant cost savings for the broker.

“BankStatements is a technology platform that focuses on reducing friction for consumers and businesses who are using the internet,” says Bednar.

“The platform retrieves a customer’s bank statement data from lenders and banks and sends it directly to the broker.

This means brokers don’t have to wait days for their customers to find their bank statements to scan and email to a broker.”

Bednar says BankStatements is the clear market leader in this space, enabling brokers to receive statements instantly and get loans approved much more quickly because there is less paperwork and fuss.

“This is an exciting partnership that will result in cost savings to the broker, faster approvals, a better customer experience, and the potential to AGGREGATOR

22

reduce the possibility of fraud.”

Other benefits include more conversions and less risk of brokers having their loans churned by reducing the need for customers to go into their bank branch.

“It also protects a broker’s business by using robust data for their product recommendations,” says Bednar.

Since Finsure launched Infynity last year, Bednar says it has been a game changer for the group’s expanding network of

Jarrid Ohanessian, General Manager, illion Open Data Solutions

is proud to be Finsure’s latest strategic partner, working to deliver exceptional value to its network.

“We’re excited to be able to work together to improve time efficiency for brokers as well as their customers’ experience,” he says. “This partnership will increase our support of the broker market, where we already service thousands of brokers.

“Brokers choose illion Open Data Solutions because of our track record of delivering quality

“Brokers don’t have to wait days for their customers to find their bank statements to scan and email to a broker” Simon Bednar, General Manager – Aggregation, Finsure more than 1,800 brokers.

“The Infynity software has been one of the key developments in the history of Finsure, and it is one of the most up-to-date CRMs in the market, with groundbreaking technology that streamlines workflow and automates time-consuming tasks.

“Our next major deliverable is the asset finance solution called DriveIQ.” Jarrid Ohanessian, general manager at illion Open Data Solutions, says the company

services through our proven and secure technology, superior speed and system reliability, and our market-leading income and expense analytics.”

Ohanessian says Finsure is at the forefront of using technology to support its broker network, and that integrating BankStatements with Infynity will realise further efficiency gains.

He says illion is also well placed to support the broker market in the transition to

open banking, as one of only five companies that are accredited data recipients (ADRs) and the only data aggregation and analytics service that can provide a hybrid model of CDR and non-CDR data to brokers.

More than 8,000 brokers and 750 bank and non-bank lenders use BankStatements.

“It has been built based on what’s important to a lending-use case, with advantages in marketleading income and expense categorisation and affordability analytics; fastest retrieval in the market; the most stable and available service and the highest focus on information security,” Ohanessian says.

As a leading provider of bank statement retrieval and income and expense verification tools, illion Open Data Solutions has a number of services it provides to the finance industry.

These include its PDF statement optical character recognition capability to digitally read official documents and create summarised income and expense reports, and its Categorisation-as-a-Service technology, which allows lenders to send through core banking data that can be categorised and summarised into income and expense reports.

The company also offers BrokerFlow, which reduces assessment times by allowing brokers to digitally provide their clients’ data to banks.

www.brokernews.com.au

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9/12/2020 11:25:34 AM

PEOPLE

CAUGHT ON CAMERA The inaugural Brokers vs Brokers Twenty20 cricket match in support of the McGrath Foundation was held on 27 November at Charles Veryard Oval, North Perth.

Rob Diodato (Australian Personal Loan Company) and Patrick Holden (Macquarie Bank) organised the event with help from Luke Tedesco (Box Wealth), lender BDMs and aggregator and broker groups. The bankers won the toss and elected to bowl. A good crowd turned out, enjoying a barbecue, raffles and plenty of laughs thanks to co-commentators Tristan Pack (Liberty) and Resicom’s Andrew Myles. Wickets fell early for the brokers, but they posted a score of 144. Despite some last-minute heroics, the bankers fell short in the last over.

www.brokernews.com.au

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23

9/12/2020 11:26:28 AM

PEOPLE

Do you have a question for our broker mentors?

Email your question to:

antony.field@keymedia.com

BROKER ON BROKER

Empower Wealth won an excellence award in the Brokerage of the Year (6–20 Staff) category at the Australian Mortgage Awards. Backed by 10 years of industry experience, its Melbourne-based head of mortgage broking, Ben Magnus, answers questions about diversification, BID, economic hardship and market recovery

How should brokers prepare for the arrival of the best interests duty? should have reviewed A Brokers their processes and CRMs to make the appropriate changes.

Empower Wealth has embarked on an end-to-end review of our processes to implement a digital solution. Our aggregator, AFG, and the MFAA have played a critical role in offering education. We have already started refining our note-taking and strategy evaluations for clients to better align to BID. BID should not be a significant change for experienced, diligent brokers. Where the change may be felt could be in the ‘show and tell’ of the customer interaction, the rationale behind product selection and the ability to articulate the ‘why’. I see BID as a great opportunity to enhance the industry’s professionalism.

residential, particularly specialist investment lending.

What are the opportunities for brokers in commercial and specialist lending? How can brokers diversify?

All business owners live in A houses, and homeowners can own businesses, so work your database. It would be prudent to ensure your skill set can accommodate these scenarios, so I suggest the CAFBA commercial and specialised lending diploma as a starting point, or you could hire an expert to support these enquiries as you branch out. At Empower Wealth, we believe: ‘Don’t be good at what you do; be an expert and lead the way’. Our focus is on

What are your thoughts about economic recovery next year and the market for brokers?

The residential lending market A will continue to surpass expectations, and the mortgage broking industry will be the beneficiary. Hopefully, the easing of responsible lending regulations will complement an already-active market and we will see lenders easing policies and simplifying processes, allowing consumers to further capitalise on lending opportunities.

Activity will be fuelled by recordlow interest rates, cashed-up investors and customers wanting a

Q

Q

Federal financial assistance won’t continue forever.

How can brokers help their clients stand on their own feet?

The pandemic is a onceA in-a-lifetime tidal wave of uncertainty. Brokers need to work with their clients by supporting them on loan structure changes, coordinating a rate review/reduction and considering debt consolidation.

This is where the broker channel is different to a bank proprietary channel as brokers continue to service their back book of clients.

Financial education and planning for the future is also key. Empower Wealth developed the My Wealth Portal software, where our clients are well advanced in personal cash flow management.

Q

Q

Ben Magnus, head of mortgage broking, Empower Wealth

“The residential lending market will continue to surpass expectations, and the mortgage broking industry will be the beneficiary” better deal from their banks.

As for SME lending, the pandemic’s true impact is not yet felt. There appear to be a significant number of retail, hospitality and travel businesses

that are unlikely to reopen. I hope these businesses can reimagine their operations and come back stronger and more attuned to how their clients want to interact. AB

PITSTOP MENTORING Are you new to the industry, or simply keen to learn from experienced brokers who have words of wisdom to share? This is your opportunity for pitstop mentoring! If you have a question you’d like a senior broker to answer, contact us and look out for an expert answer in a future issue.

24

www.brokernews.com.au

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9/12/2020 11:27:15 AM

FE AT URES

OPINION

BRINGING CONFIDENCE BACK TO BROKERS Brokers feel under siege due to ongoing rule changes and the increasing cost burden on clients, but Wealth Today managing director Keith Cullen wants to help them get their mojo back by extending the services they offer

last few years in retail financial services have been unprecedented.

Just as one existential threat passed us by, along came another. Over the past year, as we have expanded our dealer group, I’ve had the opportunity to talk directly to hundreds of advisers and brokers.

Many are mentally and physically exhausted – many are outright depressed.

The turmoil of the last decade, culminating in the royal commission and institutional upheaval, has left them so.

Many believe that those who they trusted to serve and support them have done the exact opposite, instead abandoning them.

Compliance has been weaponised.

Providing quality financial solutions and advice that is profitable and enjoyable to deliver has become seemingly impossible.

Rules have been changed and changed again. Interpreted one way by one person and another by the next.

Mortgage brokers have been especially hard-hit over the last couple of years. In fact, their very existence was put in doubt

by Kenneth Hayne. Thankfully, common sense prevailed.

What is often forgotten in all of this is that at the centre of what we all do every day is a client who simply wants a cost-effective relationship with someone they trust.

An unfortunate consequence of the last decade of regulation creep is that conventional broking and financial advice services have become too expensive for the average Australian. Insurance advice assistance is a real case in point.

Mortgage brokerage clients will often want to talk about insurance as they take on new debts, and they are keen to do so with someone with whom they have already built a trusting relationship.

James Buchanan (Mortgage Point) put it best when he said to us: “Most of my clients don’t want to pay a financial adviser, or me for that matter, $2,500 or more for an 80-page document to put in place the insurance they have decided they want

when they have taken on a new loan.”

Many brokers like James, who get involved in the insurance space, prefer not to refer the work out as they feel they lose control of the relationship and potentially the quality of the outcome. There’s also the obvious commercial benefit if they can do the work themselves.

Having joined Wealth Today under our

THE

even contempt exists on both sides.

This is the current paradigm. It’s the paradigm that drives us at Wealth Today to help advisers get their mojo back. To show advisers that advice can be enjoyable, practical and compliant. To show brokers who are beginning to think personal advice is all too hard that their endeavours can result in great advice outcomes for their

At the centre of what we all do every day is a client who wants a cost-effective relationship with someone they trust

Keith Cullen Managing director, Wealth Today

tailored insurance-only general advice program, James now has no need to take the referral risk and says: “Being able to help my lending clients on a general advice basis for their insurance needs has been immensely valuable to them and professionally satisfying for me.”

Nick Harper (Keylend), one of the first to join our program, says: “Being able to offer my clients more than just a lending service has been a very important part of my business. It’s a natural conversation that many clients want to have.”

While our general advice program has been able to simplify what had become an overly complex process for many clients and their brokers, many brokers prefer the integrated approach and want to extend their services to full financial advice.

Unfortunately, many have seen a cultural shift within their licensees over the past decade, whereby compliance has gone mad, with lawyers and compliance personnel developing impractical, ineffective tick-abox programs that add little or nothing in terms of commercial outcomes for advisers or advice outcomes for their clients.

The result has been the emergence of an adversarial relationship between licensees and their advisers, one in which malice and

clients and great business and financial outcomes for them at the same time.

I pose this question. What is the difference between: • an annual practice audit and a practice peer review?

• an advice ‘pre-vet’ and an advice ‘peer review’?

• a compliance officer and an advice coach?

To us it’s the same as the difference between stopping poor-quality advice and enabling quality advice.

The difference: attitude. The difference is the paradigm from which we all approach our roles and develop and manage our systems and processes. The difference will be how we feel about what we do every day and the outcomes we achieve for clients and ourselves.

Whether it’s with your aggregator or your AFSL dealer group, the relationship should never be one of criticism, embarrassment, enforcement, suppression, impediment, angst, problems, or a relationship to avoid.

Like any business relationship it must absolutely be one of collegiate spirit, enablement, encouragement, learning, pragmatism and opportunity. AB www.brokernews.com.au

25_AB1724_Opinion_SUBBED.indd 25

25

9/12/2020 11:27:49 AM

DATA

QUEENSLAND

NT SPOTLIGHT

Interstate migration is predicted to create a surge in housing demand next year Home values in Queensland, particularly in Brisbane, have demonstrated resilience amid the pandemic, said John McGrath, executive director of McGrath Estate Agents.

In fact, the city’s median home price remained practically unchanged between March and October, while prices in Sydney and Melbourne declined by 2.9% and 5.5%, respectively. The latest figures from CoreLogic even show a 0.5% rise in Brisbane’s median price so far in November.

“Queensland’s hard border has protected home values in Brisbane and surrounds this year, and once the boom gate goes up, which is expected

by Christmas, I think we’ll be seeing significant new demand and capital growth in the southeast corner in 2021,” McGrath said.

Queensland was Australia’s top spot for interstate migration in 2019. An estimated 107,000 people moved to the state, resulting in a net gain of roughly 23,000. During the year, Brisbane welcomed 70% of interstate migrants.

Area

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

$410

3.9%

Metro (H)

$550,000

0.9%

1.9%

Metro (U)

$390,000

0.0%

0.3%

$380

5.1%

Country (H)

$450,000

0.6%

1.2%

$400

4.6%

Country (U)

$380,000

1.3%

2.4%

$350

4.8%

TASMANIA

Hobart continues to report strong gains in property prices despite COVID-19 Hobart’s metro region has posted price increases in both its house and unit segments, according to the latest market update by PRD Research.

Median prices this year have increased by 4.7% to $560,000 for houses and 4.2% to $442,000 for units. These gains are consistent with the growth achieved last year, and continue the healthy price growth seen over the past five years.

“Limited stock coupled with high demand has continued to push prices upwards, resulting in the need to sacrifice affordability for liveability,” the report said. It added, “A limited residential development pipeline creates urgent opportunities for the local government and developers to collaborate in ensuring housing supply constraints are eased in the near future.”

Hobart’s metro has also retained a highly resilient rental market throughout the COVID-19 pandemic. In fact, rental yields in the region were 4.1% in the 12 months to the third quarter of this year, with rents increasing to $470 per week.

Area

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Metro (H)

$515,000

2.5%

9.1%

$450

4.5%

Metro (U)

$388,500

0.2%

5.0%

$395

5.1%

Country (H)

$340,000

1.5%

9.7%

$330

5.0%

Country (U)

$274,000

1.8%

5.7%

$280

5.2%

26

DARWIN: FROM ZERO TO HERO Darwin’s property price growth has outpaced that of the bigger housing markets during the COVID-19 outbreak had one of the highest annual increases in house prices during the third quarter of 2020. According to a Domain report, house prices in the city went up by 7.2%, faster than the annual gains reported in Sydney, Melbourne and Brisbane.

Daniel Harris, director of Real Estate Central NT, said Darwin had seen steady gains in demand for houses since the last few months of 2019. While demand slowed down during the COVID-19 restrictions, it picked up as the NT was the first state to reopen.

“Darwin’s gone from the worst market in Australia to one of the best,” Harris said in the report, adding that the housing boost from the government in the form of grants and discounts was one of the biggest drivers of demand. First home buyers can get up to $20,000 under the territory’s Building Bonus Grant.

The Territory Home Owner Discount provides stamp duty relief of up to $18,600 for buyers who DARWIN

have not owned a property in the NT for the past two years. Harris said this could be bringing people who might have moved interstate back to the territory.

“It’s predominantly Victorians, but it’s a mix of states,” he said. “These people are buying houses and renting for 12 months – they’re not all here for a corona-free holiday,” he said.

Over the course of the pandemic, Darwin has seen a turnaround in its population growth trends. While the territory typically loses more people due to interstate migration, the rate of decline has been steadily moderating since the onset of the pandemic.

Glenn Grantham, general manager at Raine and Horne, said people started coming to Darwin for jobs early in the pandemic, there has been increasing buying activity among retirees, and investors are drawn to its strong rental yields.

“COVID has been a well-timed hit in the arm for Darwin,” he said in the Domain report.

DARWIN HOUSING INDICATORS — WEEK ENDING 29 NOVEMBER Source: CoreLogic

New property listings – 117

Total property listings – 675

Houses

37

$485,000

40 days

Number of sales

Median price

Time on market

Units

20

$330,000

67 days

Number of sales

Median price

Time on market

SUBURB TO WATCH: PARAP Median price (houses) $740,000

Median price (units) $300,000

12-month growth 3%

12-month growth 14%

3-year growth Average annual growth 6%

Gross rental yield

0.2%

4%

Average annual growth Weekly advertised rent

Gross rental yield

-1.9%

$420

7%

www.brokernews.com.au

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9/12/2020 11:28:32 AM

AUSTRALIAN CAPITAL TERRITORY

Canberra has seen the strongest home value growth of all capital cities this year Dwelling values in Canberra have risen by 5% so far this year, the highest growth of all capital cities, weathering the negative impacts of COVID-19 on the overall property market.

“Canberra’s resilience is largely due to its robust economy, its unique job security being a government town, and an incredibly low rate of [COVID-19] infection at just 0.42% of the nation’s cases by October 2020,” said John McGrath, founder and executive of McGrath Estate Agents.

He said there had been a surge in demand from buyers in Canberra, particularly first home buyers and upgraders. These buyers are showing more of an interest in houses than apartments.

“Firstly, with interest rates so low, more people can afford a house. Secondly, changes to stamp duty exemptions for first home buyers have steered more of them towards houses, thereby raising demand further,” McGrath said.

Canberra expanded the stamp duty exemptions last year to include established and new homes.

Prices caps were also removed for these discounts.

Median Quarterly stamp 12-monthduty Weekly Gross “Progressively reduced for all other buyers hasprice also encouraged people tomedian upgrade rental growth growth more freely as their lifestyle needs change, rent thereby yield raising demand specifically for houses,” McGrath Metro (H) $725,000 2.5% 5.7% $580 4.3% said.

Area

Metro (U)

$445,000

1.1%

4.7%

$480

5.6%

VICTORIA

Victoria’s homebuilding activity is poised to fall to its lowest level since FY2014

HIGHEST-YIELD SUBURBS IN NORTHERN TERRITORY Suburb

House

Gross rental yield

Median price

Quarterly growth

12-month growth

Average annual growth

TENNANT CREEK

H

11%

$200,000

0%

-10%

4.9%

MILLNER

U

9%

$190,000

-3%

-33%

-4.3%

NIGHTCLIFF

U

8%

$210,000

1%

-37%

-2.3%

GILLEN

U

8%

$253,000

-11%

-16%

-1.5%

BAYVIEW

U

8%

$337,000

-4%

-6%

-6.2%

KATHERINE SOUTH

H

8%

$256,000

0%

N.A.

5.3%

BAKEWELL

U

8%

$199,000

-6%

-15%

-5.9%

COCONUT GROVE

U

8%

$219,000

-3%

-29%

-4.5%

SADADEEN

H

7%

$402,250

1%

-1%

0%

LEANYER

U

7%

$245,000

-2%

-13%

-4.5%

The Housing Industry Association predicts a 10.4% fall in the number of new transactions for detached homes over the next two years to its lowest since FY2014, primarily due to the extended shutdown in the state during the COVID-19 outbreak.

“Victorians have not been able to fully capitalise on HomeBuilder to the same extent as other jurisdictions due to the state’s prolonged second lockdown restricting access to display centres,” said Fiona Nield, executive director at the HIA. The outlook for the multi-unit market is also poor, with starts predicted to decline by 42.4%. The loss of student and tourist demand and the moving of Melbournians to regional Victoria will dampen activity in this sector. Total starts in the state are expected to fall by 22.7% in the next financial year.

“The Victorian economy has been underpinned by very strong population growth over the past decade, which has seen ongoing growth in employment in the residential building sector,” Nield said.

He believes the volume of new homes beginning construction could decline further by 2022 if population growth does not return to normal levels.

Area

Metro (H)

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

$725,000

0.7%

rent

yield

5.7%

$430

3.0%

Metro (U)

$585,000

0.9%

7.3%

$420

3.7%

Country (H)

$400,000

1.8%

6.5%

$350

4.7%

Country (U)

$312,000

1.7%

9.3%

$290

4.9%

www.brokernews.com.au

26-29_AB1724_Housing_Market_Data_SUBBED.indd 27

27

9/12/2020 11:28:55 AM

DATA

WESTERN AUSTRALIA

Perth is showing early signs of recovery from the impacts of the pandemic According to the Real Estate Institute of WA (REIWA), property sales in Perth averaged 2,900 transactions per month at the start of 2020. While activity dipped at the onset of COVID-19, sales have risen significantly in recent months, reaching an average of nearly 4,200 monthly transactions. Listings for sale, on the other hand, have dropped to a 13-year low, with just over 10,000 properties listed on reiwa.com.

REIWA president Damian Collins said that despite the lull at the start of the pandemic, Perth was showing “extremely positive” signs.

“With record-low interest rates looking like they will be around for a while, many buyers are finding it cheaper to buy than rent. This is one of the reasons why we can expect sales activity in 2021 to continue gaining momentum,” he said.

According to agents on the ground, it is not uncommon for sellers to receive multiple offers, some thousands of dollars above the asking price, Collins said. This increasing interest could boost prices in Perth next year by “between 6% and 10% over the next 12 months”, he said.

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Metro (H)

$477,000

0.0%

-1.0%

$370

4.1%

Metro (U)

$363,000

-0.7%

-2.7%

$340

4.8%

Country (H)

$357,500

4.3%

4.6%

$350

5.4%

Country (U)

$175,000

-2.3%

-9.1%

$300

8.0%

Total auctions

108

Cleared

51

Uncleared

17

Clearance rate

75.0%

PERTH Total auctions

18

Cleared

6

Uncleared

2

Clearance rate

75.0%

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Houses

Units

Sydney Melbourne Brisbane

Adelaide

Perth

Darwin

$455,500

$672,500

$485,000

$397,500

$567,000

Hobart

$330,000

$0

$377,500

$100,000

$480,000

$200,000

$370,000

$300,000

$505,000

$500,000 $400,000

$415,000

$700,000 $600,000

$518,000

$800,000

$562,500

$900,000

$697,650

The state’s three-month extension to HomeBuilder provides applicants with an additional six months after contract signing to commence construction of their new home or renovation.

The scheme previously required applicants to seek an extension from the SA Commissioner of State Taxation on a case-by-case basis. Eligible reasons include labour shortages, difficulties in obtaining construction materials, and delays in finance, land titling and council approvals.

The extension will help ease pressure on the industry to meet growing demand resulting from the scheme, said SA Treasurer Rob Lucas.

“This will give builders more time to plan and secure tradespeople and ensure a steady pipeline of work which, ultimately, is good for jobs,” he said.

Stephen Knight, executive director for SA at the Housing Industry Association, said the extension would provide relief to builders who could now plan a more orderly rollout of work during the first half of 2021. Knight said HomeBuilder would likely boost interest in new homes across the state.

Canberra

CAPITAL CITY HOME VALUE CHANGES Capital city

Weekly change

Monthly change

Year-to-date change

12-month change

Sydney

0.3%

0.4%

2.0%

3.8%

Melbourne

0.2%

0.7%

-2.3%

-0.8%

Brisbane

0.2%

0.6%

2.5%

3.2%

Adelaide

0.5%

1.2%

4.7%

5.2%

0.3%

1.0%

0.8%

0.9%

0.2%

0.6%

0.9%

2.2%

Metro (H)

$477,000

1.1%

3.3%

$380

4.2%

Metro (U)

$334,500

-1.9%

-3.6%

$330

5.2%

Perth

Country (H)

$270,000

0.0%

1.9%

$270

5.1%

Combined 5 capitals

Country (U)

$219,000

0.5%

1.7%

$210

5.1%

28

ADELAIDE

MEDIAN HOUSE AND UNIT PRICES

SA has rolled out a three-month blanket extension to the HomeBuilder scheme

Area

The combined capital city preliminary auction rate in the last week of November was 73.9%, higher than the previous week’s rate of 73.6%, which was revised down to 69.1% at final figures. There were 2,155 homes taken to auction, up from 1,803 the previous week. Over the same week last year, 3,206 homes went to auction and 73.6% of reported results were successful.

Melbourne hosted 894 auctions, overtaking Sydney as the busiest capital city for auctions. In the previous week there were 646 auctions, compared to 1,533 last year. Of the 756 results collected, 71.7% were successful, down from 77.1% the previous week, revised down to 70.0%.

One year ago, 74.8% of auctions were successful. In Sydney, 887 homes went to auction, compared to 805 over the previous week. The preliminary clearance rate was 76.9%, increasing from the previous week’s rate of 76.2%, revised down to 71.6%. Last year, 78.1% of auctions in were successful.

$646,000

SOUTH AUSTRALIA

WEEK ENDING 29 NOVEMBER 2020

$831,250

Area

CAPITAL CITY AUCTION CLEARANCE RATES

*The monthly change is the change over the past 28 days

www.brokernews.com.au

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9/12/2020 11:29:24 AM

BRISBANE CANBERRA Total auctions

117

Cleared

76

Uncleared

21

Clearance rate

Total auctions

127

Cleared

54

Uncleared

31

Clearance rate

63.5%

78.4%

SYDNEY Total auctions

887

Cleared

573

Uncleared

172

Clearance rate

76.9%

TASMANIA

MELBOURNE Total auctions

894

Total auctions

4

Cleared

542

Cleared

3

Uncleared

214

Uncleared

1

Clearance rate

Clearance rate

71.7%

n.a.

Note: A minimum sample size of 10 results is required to report a clearance rate

NEW SOUTH WALES

Area

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

State’s proposed stamp duty reform may take years to show benefits If implemented, the proposed stamp duty reform in NSW will undoubtedly have “broad and long-term ramifications” for the industry, said Craig Whatman, tax partner at Pitcher Partners Melbourne. “Whilst on the face of it the proposal sounds promising as a means of reducing the existing barriers to homeownership and mobility of the workforce, it is too early to tell whether the positive aspects of the new system will outweigh the additional complexities it is likely to create for purchasers as well as the potential impact on the property market,” he said.

As Whatman sees it, the complexity will be most acutely felt in the prolonged transitional period from how things stand now to the finalised reform.

“Given the current estimate that it would take 20 years for 50% of all properties in NSW to become subject to the new system, the current stamp duty regime is still likely to be in place for quite some time,” Whatman said.

Metro (H)

$925,000

1.2%

5.6%

$530

2.9%

Metro (U)

$712,000

1.1%

3.2%

$500

3.6%

Country (H)

$500,000

1.5%

5.5%

$400

4.2%

Country (U)

$435,000

1.7%

3.6%

$350

4.2%

Source: Except where otherwise stated, all data sourced from CoreLogic, November 2020

NICK YOUNG: TRAIL BOOK SALE EXPERT Smart succession planning starts early Maximise the sale of your trail book and business as a whole 03 8508 6666 | 0417 392 132 | nyoung@trailhomes.com.au | trailhomes.com.au www.brokernews.com.au

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PEOPLE

Aggregator Vow Financial

IN THE HOT SEAT

Andrew Soo is the director of GM Capital Solutions, a brokerage specialising in construction, commercial and property funding. The AMAs Broker of the Year – Commercial excellence award winner describes his career path

What was your first job before you joined the finance industry?

My family operated buffet restaurants in Newcastle and the A Hunter, so I grew up in large kitchens that could feed up to 500 people at a time. Throughout high school I helped out every weekend, taking orders and cleaning tables. While I was completing my university studies, I continued working in the family business and was given more responsibility to manage staff and run the operations. Had I not pursued a career in finance I would have probably ended up being a restaurateur.

Q

Tell us about the path you took to becoming a broker?

My dream was to run my own business. Being a broker A made sense as I enjoy helping people and working in finance.

After completing my university studies, I went on to work for Commonwealth Bank, ANZ and NAB in their business and corporate banking teams. My roles were all client facing, which provided me the opportunity to build strong relationships as well as hone my technical skills in finance. During my 15-year banking career, I built up enough skill sets and contacts to give me the confidence to go out on my own. The business has been operating for over 20 years. It was expanded into a wider partnership and rebranded as GM Capital Solutions, bringing in experienced finance professionals who have helped businesses and completed projects across Australia.

Q

What do you enjoy most about your role in broking?

Being my own boss, I enjoy the freedom and flexibility to A work with my clients to find solutions to their finance needs.

When I worked in large institutions, I was restricted by what types of clients I could deal with and what options I could present. Now I feel I can genuinely help people with their financial needs and deal with clients across a wider range of industries. We also collaborate with other professional services firms and brokers to find unique ways to help our clients.

Q

30

Andrew Soo, director and founding member, GM Capital Solutions

What is the most challenging part of your job as a broker?

As a commercial broker, our job is to understand our client’s A business and the industry they operate in. Every business is different, so we are constantly learning new things about businesses all the time. The better we understand the business, the better the outcome will be for our client. It’s very rewarding but can get very technical and complex. Our clients are very passionate about their businesses and expect us to be up to speed within a very short period of time.

Q

If you weren’t a broker, what would be your ideal career?

I have always wanted to be a teacher – I enjoy educating and A coaching.

If I ever get tired of working in finance I’d like to move back to Newcastle and retire as a teacher. AB

Q

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