MARCH 2021 ISSUE 18.03
NAB to take over 86 400 Neobank 86 400 is set to join UBank as part of NAB /04
Mortgage managers forum revived The MFAA wants to put mortgage managers back in the spotlight /13
Short-term lenders offer solutions Brokers are being encouraged to explore short-term loans /18
ALSO IN THIS ISSUE…
DEAN KOUTSOUMIDIS Rising to all economic challenges, non-bank lender Equity-One has provided competitive loan solutions to commercial borrowers for over 20 years /14
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Big deal Broker Mitch Boulden helps an older couple buy their dream home /22 Broker on broker Origin Finance broker Kris Menon shares his tips on how to cope with stress /24 In the hot seat Mortgage Choice’s Deslie Taylor explains how she went from banking to broking /30
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NEWS
IN THIS SECTION
Lenders Neobank 86 400 to become part of NAB /04
Aggregators AFG enters partnership with fintech Symple /06
Market Positive property market sentiment soars /10
Industry bodies HomeBuilder provides big economic boost /12
Technology Credit Reboot offers debt solution /08
www.brokernews.com.au MARCH 2021 EDITORIAL
SALES & MARKETING
Editor Antony Field
Publisher/Sales Manager Simon Kerslake
News Editor Madison Utley
GLOBAL WATCH What’s happening in the mortgage, broking and banking world in the United States and Canada? Here’s your snapshot of the news that matters most in North America
FORBEARANCE NEARS END, 5% OF BORROWERS STILL STRUGGLING near the one-year anniversary of mortgage forbearance programs in the US, and while many American borrowers have left the programs, a frustrating number remain. Almost 5.5% of homeowners are still missing mortgage payments, representing those who have not got back on their feet since the COVID-related lockdowns in spring 2020. This group are a significant policy challenge, as well as a potential risk to the country’s current hot housing market. Sagent Lending Technologies VP of agency affairs and compliance Matt Tully said these borrowers could take some hope from the Biden administration’s promise to address the issue, but there were some risks. “If we [extend] the foreclosure moratorium but don’t do anything about forbearance, then the borrower ends up in this kind of no man’s land, post-forbearance, pre-foreclosure.” IT’S
Production Editor Roslyn Meredith
ART & PRODUCTION
Global Head of Media Marketing Lisa Narroway
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MORTGAGE VOLUME OF U.S. GOVT-BACKED LOANS HITS NEW HIGH on the wave of record-low interest rates, mortgage volume of US governmentbacked loans skyrocketed to a new record high in the third quarter of 2020, while default risk continued to decrease. Results from the Milliman Mortgage Default Index (MMDI) show that mortgage volume of loans backed by Freddie Mac and Fannie Mae soared by more than 125% year-over-year due to strong mortgage demand. Refinance loans made up about 75% of GSE mortgage volume in Q3, while 50% of Ginnie Mae loans originated in the quarter resulted from refinancing. “Mortgage refinance loans during the third quarter of 2020 were so high, we’ve heard anecdotally originators couldn’t keep pace with demand,” said Jonathan Glowacki, a principal at Milliman and author of the MMDI. RIDING
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CANADIANS NEED FIVE YEARS’ SAVINGS TO BUY HOME — REPORT National Bank of Canada has reported that a Canadian household earning within THE the average income bracket would need about five years to save the minimum down payment for a residential property purchase. Assuming a 10% savings rate and a 6% down payment, this was the longest saving period calculated in about 40 years. The reading significantly exceeded the previous record established during the housing bubble of the 1990s. This was despite significant improvements in household purchasing power over the last few quarters. “At a national level, there has never been a worse time to accumulate the minimum down payment,” National Bank economists Kyle Dahms and Camille Baillargeon wrote in their report. “Higher incomes and record-low interest rates were almost completely offset by a substantial rise in home prices.”
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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NEWS
LENDERS PROSPA ENJOYS ORIGINATION GROWTH OF 25% lender Prospa sees its quarterly trading update as proof that demand for credit is returning to the SME sector faster than anticipated. Prospa reported a steady uplift in originations over the December 2020 quarter, with $19.6m originated in October, $32.4m in November and $46.6m in December. Overall, there was a 25.9% quarterly increase in originations. Prospa CEO Greg Moshal said small business demand for capital was “increasing faster than we had previously expected”. NON-BANK
WESTPAC EXTENDS BROKER EDUCATION PROGRAM Broker Academy program has undergone a “complete refresh”, with provision made for the bank’s commercial and equipment finance brokers. The comprehensive online learning and business knowledge platform will now be offered to Westpac’s 9,000 business banking brokers via a free 12-month subscription. While the program is available to all brokers, the free year is for those in commercial space at Westpac, Bank of Melbourne, BankSA St. George and Capital Finance. WESTPAC’S
“This [acquisition] will significantly fast-track our growth, propelling our business, customer numbers and balance sheet to a position which would’ve otherwise taken five years” Robert Bell CEO, 86 400
4
Philippa Watson, CEO, UBank and Les Matheson, chief operating officer, NAB
NAB MOVES TO ACQUIRE NEOBANK 86 400 86 400 is set to join UBank under the umbrella of NAB. The major hopes its planned neobank acquisition will drive innovation and attract new customers has started proceedings to acquire 100% of 86 400 in a bid to complement the customer base and brand of its own digital bank, UBank, with the neobank’s experience and technology platform. NAB chief operating officer Les Matheson said the bringing together of UBank and 86 400 was consistent with NAB’s long-term strategy and would enable the major to develop a leading digital bank that could “attract and retain customers at scale and pace”. “The combined business will deliver accelerated innovation and an enhanced customer NAB
experience to create a stronger and more competitive banking alternative for Australian customers,” he said. Having participated in 86 400’s Series B capital raise, NAB already holds an 18.3% shareholding. The major now proposes to acquire the remaining shares by a scheme of arrangement, with total consideration expected to be up to $220m. The transaction, subject to approval by shareholders and regulators, would result in the 120-person 86 400 team becoming part of the NAB group. 86 400 CEO Robert Bell said the neobank and its customers would benefit from NAB’s capital and balance sheet strength and investment spend.
“This will significantly fast-track our growth, propelling our business, customer numbers and balance sheet to a position which would’ve otherwise taken five years,” he said. 86 400 has over 85,000 customers, $375m of deposits, $270m in approved residential mortgages and 2,500 accredited brokers. December 2020 was the group’s largest-ever month for home loan applications, with more than $270m in home loans settled or unconditionally approved. UBank CEO Philippa Watson emphasised the group’s 12 years spent as a “pioneering digital bank”, which now boasts over 600,000 customers. “Combining with 86 400 will bring together UBank’s established business and 86 400’s experience and technology platform to meet the changing needs of our customers. We are looking forward to having the 86 400 team join us to deliver the next generation of simple, fast and mobile banking solutions.”
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NEWS
A G G R E G AT O R S COG FINANCIAL SERVICES BOOSTS PROFITS BY 140% largest asset finance
AUSTRALIA’S broking and
aggregation group has announced that it grew its profits by 140% in the first six months of this financial year. In its 1H20 report, COG Financial Services Limited said it had achieved net profit after tax and before amoritisation (NPATA) of $10.1m, up significantly from the $4.2m charted in 1H19. COG CEO Andrew Bennett said the “terrific result” made clear the group was a “great business in normal times and an even better one in times of stress”.
LOW INTEREST RATES TO REMAIN, SAYS CEO David Bailey, CEO, AFG
CEO Susan Mitchell has said she does not expect the cash rate to rise for at least three years, given the latest inflation and labour market data. Her comments followed the Reserve Bank’s February decision to maintain the cash rate target at 0.10%. “The decision to start 2021 by keeping the cash rate on hold follows a raft of positive economic data,” Mitchell said. This included 2020 ending with record home loan demand and national dwelling values increasing by 0.9% in January, supported by a rise in every capital city, according to CoreLogic. MORTGAGE CHOICE
AFG PARTNERS WITH FINTECH PERSONAL LENDER SYMPLE AFG brokers can now offer Symple’s personal loans to their clients. The aggregator is also enjoying a record-breaking quarter for home loan lodgements has partnered with Melbourne-based fintech Symple Loans so it can diversify the options available to its broker network. The aggregator’s network of more than 3,000 brokers can now offer their clients access to Symple’s personal loan offering. “Symple has an innovative pricing model, and its addition to the AFG panel helps drive a competitive lending market,” said AFG head of sales and distribution Chris Slater. Symple, which launched in January 2019 and has raised over $100m in debt and equity, uses digital lending technologies, advanced analytics, and proprietary risk-scoring techniques in AFG
Commercial Loans
analysing borrowers’ financial situations. The tools accurately determine a borrower’s risk profile in order to offer the best interest rate possible. “Our aim has always been to set a new standard for how personal lending ought to work and then align with industry leaders locally and globally to bring that strategy to life,” said Symple CEO Bob Belan, who added that the AFG partnership was a crucial step in Symple’s growth plans. Meantime, AFG is enjoying a record-breaking quarter for home finance lodgements, hitting $19.9bn during the second quarter of FY21. Total housing finance lodged by AFG brokers increased by 9.5% on a quarterly basis and
by 30% from the preceding year. The average loan size has reached a new record, coming in at $544,359 over the quarter. These strong gains indicate the increased activity of homeowners and would-be buyers amid the pandemic. “With travel off the agenda for many, the home has become even more important, and 42% of lodgements were for those upgrading their homes,” said AFG CEO David Bailey. Home finance lodgements grew across most states, with Victoria reporting the largest increase at 18%, followed by WA (13.3%), Queensland (7.8%), NSW (3.5) and SA (0.4%). According to AFG, government incentives geared towards supporting first home buyers have boosted the share of loans to this segment to 22%. “A record-high loan-to-value ratio of 73% is due to the high proportion of first home buyers who typically have smaller deposits,” Bailey said.
“Symple has an innovative pricing model, and its addition to the AFG panel helps drive a competitive lending market” Chris Slater Head of sales and distribution, AFG
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NEWS
TECHNOLOGY SOCIETYONE LAUNCHES SECURED LOAN PRODUCT has brought its first secured personal loan offering to the larger market. CEO Mark Jones said the small group of brokers involved in a pilot trial all provided “extremely positive” feedback. He said this, along with strong growth figures – including a record month of originations in December and crossing the milestone of $1bn in lending in January – meant it was the right time. “We’re able to increase accessibility and flexibility for our customers, while maintaining our high credit quality for our investors.” SocietyOne’s secured personal loans are available only through the broker channel but will soon be released to applicants seeking finance directly through the lender’s website. Borrowers can access a loan of up to $700,000 and terms of two to seven years. SOCIETYONE
LUMI SECURES SUPPORT OF NAB, AFM lender Lumi has secured a warehouse facility from NAB and Alexander Funds Management. With their support, Lumi aims to complete its $20m equity raising, which it announced late last year. Lumi CEO Yanir Yakutiel said the funding would help Lumi continue growing its loan book. “This year, Lumi has grown significantly, having launched a new line-of-credit product and by participating in the coronavirus SME Guarantee Scheme as we evolve to meet the changing demands of our customers,” Yakutiel said. “The time is right for us to scale up operations, and we have successfully raised a new warehouse facility with NAB and AFM.” ALTERNATIVE
Laurence Barlow, CEO, Credit Reboot
FINTECH DEVELOPS SOFTWARE SOLUTION TO RENEGOTIATE DEBT A Brisbane firm has created software that helps identify lending compliance breaches so borrowers can reduce their debt levels 31 March draws closer, thousands of consumers and small businesses face the end of their debt holiday. Laurence Barlow, CEO of Brisbane-based fintech Credit Reboot, which specialises in debt restructuring, said that with the end of JobKeeper and the JobSeeker supplement, many Australians could find themselves in trouble. Barlow said that at the height of the debt holiday, 900,000 consumers and small businesses had $245bn of interest frozen. “Treasurer Josh Frydenberg, just a few weeks ago, encouraged business owners and consumers to AS
get on the front foot and negotiate with creditors,” he said. Credit Reboot has developed a software application that helps consumers and SME owners write off 50–90% of debt by identifying credit providers’ responsible lending compliance breaches, allowing them to reset their debt position before 31 March. Barlow said Credit Reboot believes it’s important that people pay their debts so when negotiating with credit providers, “we’re not saying they didn’t lend the money or the consumer didn’t spend it”. “If the credit provider is holding the consumer to full compliance
of that contract, ie they must pay it all back plus interest plus fees and on a specific day, then it is fair and reasonable they are held to the same high compliance standards, and if they breach those standards, that is the basis of a negotiation.” Credit Reboot renegotiates based on compliance and reduces the debt from breaches it finds through its software, which conducts more than 180 checks on loan contracts and/or debt collection processes associated with credit facilities. Barlow said the process does not affect credit scores. The firm also offers a solution to brokers’ clients who can’t get home loans “because they have too much credit card debt”. “We wipe out that excess debt and can refocus the consumer lending habits towards more intelligent credit facilities such as real estate.”
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NEWS
MARKET MORE FHLDS SPOTS MADE AVAILABLE federal government is reissuing the First Home Loan Deposit Scheme guarantees from the 2019/20 financial year that were originally allocated to buyers who have since been unable to complete their home purchases. First home buyers will be able to apply for the newly freed spots from the scheme’s panel of lenders in the coming days – around 1,800 are expected to be made available. The scheme was designed to help first home buyers get into a home sooner, allowing for a deposit of as little as 5%. THE
HOUSING VALUES RISE TO RECORD HIGHS Mathew Patterson, head of broker distribution, ME
home values have not
AUSTRALIAN only surpassed
CONFIDENCE IN PROPERTY MARKET REACHES NEW HEIGHTS — STUDY Property investors, owner-occupiers and first home buyers are buoyant about the market, with positive sentiment in ME’s national survey higher than ever sentiment among those in the property market has reached a record high, and negative sentiment is at an all-time low, according to a report from ME Bank. ME, an online bank owned by Australian industry super funds, started its Quarterly Property Sentiment Report in 2019. The latest national survey of 1,000 adults in the property market, conducted in January, showed buoyed sentiment is being supported by expectations for residential property price increases, higher levels of market activity, record-low interest rates and government incentives. The rise in positive sentiment was reported across all states and POSITIVE
territories. Queensland reported the highest level of positivity in Australia (56% in metro areas, 58% in the regions). Among different buyer cohorts, investors and owner-occupiers reported to be considerably more positive than in the last quarter (October 2020). Positive sentiment increased by 15 and 17 percentage points, respectively. First home buyers, however, recorded a fall in positive sentiment, down four percentage points to 27%. About 72% of those “looking to buy” said “stimulus measures such as HomeBuilder, first-home buyer incentives and stamp duty relief in some states have made buying or investing in property more
pre-COVID prices but reached a “fresh record high” in January 2021, with CoreLogic’s national home value index reading 0.7% higher than its previous peak in September 2017. Every capital city and rest-of-state region saw a rise in housing values over the month, from a 2.3% jump in Darwin to a 0.4% rise in Sydney and Melbourne. Home prices rose in 85 of the 88 largest sub-state regions across Australia in January, with 46 of those charting record highs, led by the Queensland Outback at 3.6%.
attractive to them” – rising to 74% among first home buyers. Also, 79% of those “looking to buy” said “record low interest rates have made buying or investing in property more attractive to them”. ME head of home loans and personal banking Claudio Mazzarella said the results reflected a resilient property market and strong incentives for buyers. “While there are still many challenges such as unemployment and job insecurity, it’s promising to see how sentiment and market activity have rebounded,” Mazzarella said. ME head of broker distribution Mathew Patterson said he expected property investors would be back in full force this year. “The flip side ... is that it will make it hard for first-home buyers to get their foot in the door. Brokers will play an important role in helping new entrants in the property market to complete their research.”
“While there are still many challenges such as unemployment and job insecurity, it’s promising to see how property sentiment and market activity have rebounded” Claudio Mazzarella Head of home loans and personal banking, ME
IMPROVING OUTLOOK ON PROPERTY MARKET Source: ME Quarterly Property Sentiment Report, Q1 January 2021
Overall, how do you feel about the property market? 50% Positive Neutral Negative
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TECHNOLOGY UPDATE
INNOVATIVE DECISION ENGINE FAST-TRACKS ROAD TO ‘YES’ real-time assessment in line with each lender’s current product and credit policy, the NextGen.Net platform ApplyOnline provides brokers with accurate loan evaluations and surety for their customers. A valuable tool for brokers and lenders alike, ApplyOnline’s ‘A ssessment Metrics’ allows lenders to update their policy details live and ensure brokers are always armed with the correct information. The tool itself is not only within ApplyOnline but also available for broker groups to embed directly into their CRM platform via an API. Brokers simply ‘call’ the API from their CRM platform at point of sale to assess a loan scenario in real time. NextGen.Net Chief Customer Officer Tony Carn refers to it as “the intelligence under the hood”. “It’s a very sophisticated rules engine that sits behind our software platform,” he says. NextGen.Net Applications Director Brett Stanford adds, “Probably the best way to describe the function of the Assessment Metrics tool is as a lightning fast and accurate way of calculating a host of metrics that relate to two of the three ‘Cs of Credit’ – the evaluation of collateral and the capacity position of the application. “We calculate those metrics then overlay the lender’s policy to provide feedback to the broker as to whether that application adheres to that policy.” Stanford explains that as with most NextGen.Net services, the fundamental objective of the Assessment Metrics tool is to eradicate the need for reworks and enhance the quality of applications. All this helps save time and helps brokers offer the best service possible to their customers. “The originator (broker) benefits by getting feedback at the point of sale that relates to those calculated metrics and adherence to lender policy. In other words, the broker is getting immediate feedback as to the likelihood of an application being accepted by the lender,” Stanford says. “The lender gets the benefit of receiving a clean feed of applications.” The Assessment Metrics tool includes a variety of standard metric calculations that would ENABLING
Tony Carn, Chief Customer Officer, NextGen.Net
typically be used across most lenders, including net monthly surplus, loan-to-value ratios and debt-to-income ratios. “Most significantly,” Stanford stresses, “the Assessment Metrics service incorporates the small, subtle differences that occur within each lender’s calculations and provides results to the broker as closely as possible resembling the way the lender will perform those calculations in their own system.” The rules engine is intrinsic to the ApplyOnline lodgement service offering, and Carn’s frustration is that some broker groups are not maximising its value while others are still using Excel calculators despite “version control” issues and the inherent limitations in maintaining manual policy records. “Old habits die hard,” he says. “BDMs need to have greater awareness of our Assessment Metrics tool and understand that it delivers fast, accurate information to brokers’ fingertips and identifies lenders who will provide the exact product they’re after. “Also, lenders who are not aware that it’s a multifaceted tool with many functions would benefit from knowing that some lenders utilise those metrics as their own ApplyOnline servicing calculator when they’re assessing a loan, and credit assessors utilise it in the back end.” NextGen.Net’s Industry Benchmark Reporting service is also intrinsically linked to the Assessment Metrics tool in ApplyOnline. “These metrics form part of our benchmark reporting data
Brett Stanford, Applications Director, NextGen.Net
set and add real ‘colour’ to the reports,” says Stanford. “Our benchmark reports are not just simplistic accounts of applications or loan amounts. We dig deep into risk-based metrics, for example segmenting the market based on LVRs and DTI.” Stanford says NextGen.Net is in a unique position to offer this metrics engine service to its customers because NextGen.Net captures the application data as finalised by the broker. “The data has the opportunity to evolve and change as the borrower works through their fact-find with the broker,” Stanford says. “We are uniquely placed to run the calculated policy and metrics against the application data that the customer intends to send through to the lender. Prior to submission we prompt the broker to check what is about to go through in its finalised form. That is the best way to avoid a rework.” In terms of the metrics detail, Stanford points to the number of years this data has been built upon in ApplyOnline. “We are fortunate to have a vast amount of accrued knowledge and experience within our data management team, who have an exceptional understanding of the variety of calculations that are performed in the market,” he says. “So the number of variables that we consider from an application standpoint and put into our engine really means that we are market leaders when it comes to these calculations. “Our metrics service is being used to not only calculate servicing and other metrics as
they stand in the present but also for future states. For example, retirement plans or an interestonly loan that may revert to a principal and interest repayment can be taken into consideration. This means a lender can articulate policy that applies to all these scenarios.” Because the service is so fast and capable of running different scenarios in parallel, lenders can apply calculations and policy requirements and the broker can get instantaneous feedback. Looking to the most recent applications of the Assessment Metrics tool, Stanford highlights the fact that lenders are in the process of retiring their Excel spreadsheets. “We’ve been working with lenders to build standalone servicing calculators that leverage our centralised metric engine service and provide the same level of feedback that ensures the current scenario the broker is working on is in the ballpark and likely to proceed to application stage,” he says. Carn adds, “The antiquated Excel calculator always has delays and could take anything up to a week to update across the channel. Our Assessment Metrics are driven by a data management team with robust controls and so it’s up to date all the time and its accuracy can be relied upon. “From a lender’s perspective, it’s very easy to maintain. They can update changes in their servicing calculations or their credit policy themselves. So it’s cheap, it’s easy, it’s accurate, it’s up-to-date, it’s efficient and it’s in real-time!”
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NEWS
INDUSTRY BODIES PROPERTY BUYERS URGED TO STAY COOL December’s property market momentum has continued into 2021, the Real Estate Buyers Agents Association has warned homebuyers against making property purchases prematurely. REBAA president Cate Bakos said rushing such a big decision was a “critical mistake to avoid”. “Our members are seeing higher inspection numbers, a heightened number of bidders and offers, tighter days on the market and stronger prices than ever before. Purchasing in a hot market requires fast decision-making, but it should never lead to irrational decisionmaking or tardy due diligence,” she said. Buyer enquiries were a lot higher than in previous years, but the catch was that some buyers were showing “desperate behaviours”. If they were not patient and prudent, Bakos said there was a higher chance buyers would regret their purchases. AS
FORMER BROKERAGE BOSS PLEADS GUILTY former director of a mortgage brokerage has pleaded guilty to making a false statement to ASIC. Ding Yang was director of Melbourne-based Advanced Choice Finance (ACF) Pty Ltd. His lender accreditation with the Bank of Melbourne was terminated in July 2012 and his membership with Connective was terminated in April 2016. However, in January 2017, Yang completed and lodged a credit licence annual compliance certificate with ASIC in which he falsely certified that none of ACF’s fit and proper people had had their accreditation cancelled by a lender or their membership with an aggregator terminated. The Commonwealth Director of Public Prosecutions is prosecuting the matter. ACF was charged with one count of knowingly making a false statement in a credit licence annual compliance certificate lodged with ASIC. THE
“Our members are seeing higher house inspection numbers, a heightened number of bidders and offers, tighter days on the market and stronger prices than ever before” Cate Bakos President, Real Estate Buyers Agents Association
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Denita Wawn, CEO, Master Builders Australia
MASTER BUILDERS WELCOMES $50BN ECONOMIC BOOST FROM HOMEBUILDER Supporting the construction industry during COVID-19, HomeBuilder has strengthened the economy and made homeownership accessible, says Master Builders Australia
revealed last month has shown the overwhelming success of the federal government’s HomeBuilder grant scheme in driving economic recovery. “It’s even more proof that a stronger building industry means a stronger economy,” said Denita Wawn, CEO of Master Builders Australia. “HomeBuilder has been the star in the government’s economic recovery plan since it was announced in June last year along with measures such as JobKeeper.” Wawn said HomeBuilder would support $18bn in new home construction and $50bn in economic activity across the wider economy, and without it DATA
thousands of jobs would have been lost. “The surge in new home construction being driven by HomeBuilder has averted the valley of death that was confronting residential builders and tradies due to the pandemic.” Wawn said the success of HomeBuilder showed that measures to help people overcome the deposit gap were a game changer in making homeownership available to more Australians. Figures from the Housing Industry Association showed that HomeBuilder boosted new home sales activity in December, with home sales increasing by 91.8%. This was the second
strongest month for new homes in the 20-year history of the HIA sales report, behind only the level of sales activity recorded in March 2001. In terms of annual growth, new home sales increased by 32.5%. “This is an exceptional result given the nature of the pandemic and the effect that it has had on the broader economy,” said HIA economist Angela Lillicrap. On a quarterly basis, SA reported 188.3% growth in new home sales, followed by Victoria (103.1%), Queensland (99.9%), WA (99.2%) and NSW (61.7%). The government has extended the HomeBuilder program until 31 March 2021. The changes include a $15,000 grant for building contracts signed between 1 January and 31 March and an extended deadline for all applications to be submitted, including those applying for the $25,000 grant and the new $15,000 grant. Applications can now be submitted up until 14 April.
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INDUSTRY UPDATE
MFAA REVIVES NATIONAL MORTGAGE MANAGERS FORUM Mortgage managers may not be as conspicuous as brokers in the finance industry, but a new forum set up by the MFAA aims to change all that MFAA has re-established the National Mortgage Managers Forum, and Australian Broker caught up with forum president and general manager of Mortgage Ezy, Joanna James, who says mortgage managers have been a powerhouse of innovation in the Australian lending environment for more than 30 years. “We create competition in the market with unique product solutions and competitive pricing due to our lean and nimble business models and high level of service and personalised care,” she said. “Managers have been credited with contributing to the reduction of interest rates and supply of a wider range of credit for Australians since the 1980s.” Mortgage managers have had less visibility in the market for some time now, said James, as many operate within a wholesale model, supporting brokers in building their brands and businesses. “The time has come for brokers and the wider community to understand our true value and the role we play as an important counterpoint to the mainstream. Moving forward with the current market consolidation, it is even more vital that we be understood for our contribution to Australian lending,” she said. “We are a united group of 14 independent businesses working with the MFAA under the mortgage managers forum.” The aim is to provide a “strong and clear voice” that educates the industry about the relevance and importance of their role to brokers, consumers and regulators accordingly. James said mortgage managers’ uniqueness spanned six areas:
industry experience it offers. “We believe this will unify and add clarity as well as future progression to the channel as a whole and the variety of offerings we have to both brokers and consumers.”
THE
• Managers create value through innovation and bring competition to the market • Managers offer a diversity of products required to be compliant with the best interests duty • They assist with and evaluate
Joanna James, president, MFAA National Mortgage Managers Forum
“One defining point of difference is our ability to evaluate a truly appropriate solution across a horizon of credit requirements” a truly appropriate solution • Managers represent multiple lenders and can find ways to support clients due to a broad and comprehensive credit understanding • Managers have a nuanced approach to credit policies that other lenders don’t • They offer personalised service, from credit to aftercare, and a level of care other institutions often don’t “We are thrilled to be reinvigorating the impact of the forum as a vibrant and vocal channel, supporting the MFAA in their ongoing representation and enhancement of the lending industry,” James said.
Forum activities “We meet regularly to contribute via ongoing discussions, projects and initiatives that will contribute to the ongoing development, education and communication of the mortgage management channel,” James said. The forum is planning communications, tools and education pieces to support the future growth of the channel, including the navigation of regulatory changes for its members with the guidance of the MFAA. It is also working to connect with businesses that are either currently operating under a management model or are considering doing so, and that want support and the variety of
The value for brokers With BID now in effect, James said it was even more important for brokers who needed extra help in understanding the nuances of lending solutions to work with a manager who could explain products, policy, features and true costs measured over the life of the loan, rather than just looking at interest rates. “Brokers will want to consider managers who offer a diversity of products, often not available in the mainstream. One defining point of difference is our ability to evaluate a truly appropriate solution across a horizon of comprehensive credit requirements. It is in this area of solution education that brokers will gain great value.” When it comes to meeting individual time frames for urgent finance approvals, mortgage managers are renowned for their high level of personalised service before submission, during approval and after loan settlement. “2021 and the implementation of BID will inspire a resurgence of mortgage management, demonstrating our ability to add value to brokers and the market generally,” James said. Current forum projects The forum is creating resource tools to support managers and those looking to understand more about mortgage management, including “who we are and how we do what we do”. “This will include information around tech initiatives and best practice information. [In 2021] we will be releasing our video series to empower brokers and your clients,” James said. “If you feel we can give you support in any way, please feel free to reach out to us either directly or via the MFAA.”
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COVER STORY
SIMPLE LOAN SOLUTIONS STAND TEST OF TIME
Through the GFC, the rise of fintechs and the coronavirus pandemic, managed funds commercial lender Equity-One has remained steadfast in its mission to provide fast, flexible finance options to brokers and borrowers
more things change, the more they stay the same – it’s an old saying but it perfectly sums up Equity-One’s unwavering commitment to keep things simple in an industry that never stands still. Based in Melbourne, the public non-listed financial institution specialises in finance and investment, with a focus on providing fast, competitive finance solutions to commercial borrowers. Founder and managing director Dean Koutsoumidis says he set up Equity-One in 1998 as a private THE
company before it evolved into a public mortgage fund in 2006. He talked to Australian Broker about the non-bank lender’s history, its vision, the evolving market, and how it handles the various challenges it has faced. “In the early ’90s, Australia was emerging from the heady boom and later crash of the late ’80s,” Koutsoumidis says. “Australia was in its worst recession since the Depression, and borrowers had a heavy task of trying to untangle themselves from bank loans in an
EQUITY-ONE LOANS: THE NUMBERS Loan settlements since obtaining licence in 2005
$1.5bn+
3,000+
Value of loans settled
Number of loans settled
Loan features
14
Loan amounts from $20,000 to $10m+
Repayment at any time without interest break costs
Loan terms of 1 to 3 years
Terms extendable on request
Satisfactory security: residential, commercial, industrial; vacant land
99% of business referred by brokers
era when interest rates of 17% were the norm.” “As a much younger mortgage broker, I gravitated to the world of ‘private lending’, as it was known back then, where individuals who had cash to deploy invested in a direct mortgage to a specific borrower, secured by their property.” Koutsoumidis says this was mainly the domain of law firms, which ran contributory mortgage practices and mostly “they did it for a very long time and did it very, very well”.
first mortgage on all manner of properties, including residential, commercial, industrial, vacant land and construction sites, provided it is for non-code business use. “Borrowers typically come to Equity-One to settle a purchase because their traditional lender has not been able to deliver,” says Koutsoumidis. “In that sense, we are the ‘second phone call’, but we don’t have an issue with that. That’s our relevance in the marketplace. We also help developers with cash put on
“Borrowers typically come to Equity-One to settle a purchase because their traditional lender has not been able to deliver” “I was fascinated by this style of lending, because it was what we now call ‘peer to peer’, and it was in its purest form. It was very popular in those times as bank and other mainstream lenders were not able to accommodate the entire market, and there was a need for alternative sources of debt.” Koutsoumidis says he established Equity-One to offer these direct mortgage investments to retail investors. By doing so, it provided commercial borrowers with an alternative source of funds for their commercial property requirements in times when the banks weren’t “dancing”. Since obtaining its licence in 2005, Equity-One has settled more than 3,000 loans, with a value of more than $1.5bn. It offers interest-only loans secured by a
residual stock, and refinancing.” Loans are fixed interest with terms of one to two years, but they can be repaid at any time with no break or exit fees. “This is a real plus for borrowers that need a non-bank option but may be able to get their ducks in a row faster than expected.” Equity-One lends to registered Australian companies, trusts with corporate trustees, and self-managed superannuation funds, but not to individuals or partnerships for consumer purposes. Koutsoumidis says Equity-One’s catchcry is “deliberately simple”, something the firm has stood by during economic upheaval and industry changes. “It is interesting that we have been through the property crash of the ’90s, the GFC of 2007, and the
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In partnership with
Dean Koutsoumidis, managing director, Equity-One
dreaded COVID-inflicted year of 2020, yet the products in demand remain essentially the same.” In all these years, the key outcomes that borrowers seek have not changed. “Borrowers still have the same needs, that is, commercial mortgages that are cost-effective, flexible and fast. In this regard nothing has changed. Our relevance in the marketplace is just as strong now as it was in the ’90s.” However, the delivery of financial products has changed and borrowers’ expectations have sped up, says Koutsoumidis. “I mean, we don’t exactly send loans approvals through the fax machines any more. What even is a facsimile?
“We simply want to continue providing commercial loans to borrowers and our broker network by the cheapest, fastest, most seamless methods possible” “Borrowers are savvy, knowledgeable, and have high expectations. Pricing is not only the key point, but service levels and seamless processes are essential. “This is a good thing because it separates lenders who want to step up to the best practices from those that do not value it.”
Despite the far-reaching effects of the pandemic on the Australian economy, Equity-One has remained immune to any negative impacts. “We have been one of the fortunate lenders throughout 2020, largely because there are certain segments which we have not entered, ” says Koutsoumidis.
“Construction, whilst in high demand and a very large area of non-bank lending growth, is an area we have kept away from. This suits us fine as our investors are more passive, and this is reflected in our style of lending.” Other non-bank lenders have taken up more of the construction lending space, which is a good result given “the majors have taken the foot off the gas pedal in these areas.” He says there have been some surprises too. “In a market that is left to its own devices without government intervention, one would have expected interest rates from non-bank funds in 2020 to www.brokernews.com.au
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have increased,” Koutsoumidis says. “As we all now know, the opposite occurred. A contracted market coupled with cashed-up ready-to-lend entities meant that competition for the right opportunities was a challenge. This meant rates dropped and dropped by significant margins.” He says it will be interesting to see how this space evolves in 2021, particularly as the government’s COVID-related relief provisions are rolled back. “Time will tell. For Equity-One, it is business as usual. We simply want to continue providing commercial loans to borrowers and our broker network by the cheapest, fastest, most seamless methods possible.” Meanwhile, Equity-One has invested in technology to provide a better service to its investors and is planning to do the same with its loan products in the future. “Technology is at its best when it makes things simple, and fast. Developing technology to be just that isn’t as simple as it sounds,” Koutsoumidis says. The company has progressed further in its technology upgrades with investors, providing all correspondence, statements and reports through 16
individual, secured portals. “Investors of all ages have taken up this technology very quickly, and it has now become the norm. We also invested in electronic signatures on investor documents two years ago, which also was wonderfully received,” Koutsoumidis says.
“We continue staying in touch with our client base and delivering on what we promise, deal by deal by deal, one step at a time. It worked in the time of fax machines, and, you know what? It still does.” In terms of Equity-One’s broker relationships, Koutsoumidis says “the key for us is focusing on
“Borrowers are savvy, knowledgeable, and have high expectations. Pricing is not only the key point, but service levels and seamless processes are essential” “We look forward to enhancing these platforms to borrowers shortly, as fast, real-time communication is critical to brokers who want to deliver excellent service to their clients. We want to be a part of that journey with them and to add value where we can.” Koutsoumidis says that apart from some limited advertising, all of Equity-One’s business, from borrowers, brokers and investors, comes from word of mouth.
being relevant to them”. “It is not only about pricing. It is interesting that even in the rapidly evolving digital world, people still need human engagement more than ever before. “To this end, we focus on ‘being there’ for our brokers when they want to pick up the phone. Our view is that it is not only the current transaction that is our focus, but the ones in the future from the broker, too. “We try to invest in the relationship
at every touchpoint, and if we do not deliver, we would like to know. It’s all about people.” Equity-One’s trustworthy reputation and its long-term endurance in the commercial loan industry continues despite the rise of fintech lenders and neobanks, “which will continue to make headways in the Australian market”. “Many of them will raise the bar and offer innovative solutions for borrowers, but others will not. “Xinja Bank was a recent example of the failure to launch. Our focus, tech-driven or not, will still be to provide non-bank funding for commercial borrowers. We expect to broaden our products too, but more on that a little later.” Koutsoumidis says Equity-One is in its third decade of business and is delighted to still be a key part of the Australian lending and investment landscape. “Equity-One is all about its people and stakeholders. Whether you are a borrower, investor, adviser, team member or consultant, it takes every single human that is involved to make us who we are as an organisation. For this, we are very proud and grateful, and we plan to be doing it for the next four decades and beyond.” AB
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SECTOR FOCUS
SHORT-TERM LENDERS OFFER LONG-LASTING BENEFITS
Speed, flexibility and streamlined processes – these are just a few of the benefits short-term commercial lenders Aquamore, Mango Credit, Eastwood Securities and Kingsley Finance can provide brokers and their clients gone are the days when the major banks and a handful of non-bank lenders were the only sources for brokers seeking finance for their clients. Now there are a plethora of options available, particularly in the non-conforming space. For SMEs, sole traders, developers and even larger companies, having access to short-term finance is necessary to operate successfully in a fastmoving business environment. It’s even more important for those businesses hit hard by the COVID-19 pandemic. They need fast, flexible solutions, whether it’s access to working capital to assist with cash flow, or they need funds to purchase equipment, buy property, complete construction projects, restructure debt or acquire businesses. Private lenders Eastwood Securities, Kingsley Finance, Mango Credit and Aquamore specialise in these types of customers – they have the short-term loans that can help brokers meet their clients’ needs. Australian Broker caught up with the four firms to find out about their products, how they operate and what benefits they provide for brokers looking to diversify. LONG
Mango Credit Sydney-based private lender Mango Credit provides secured bridging loans and short-term business finance. “Since 2001, Mango Credit has helped thousands of Australians get out of a bind or take advantage of a great opportunity with a bridging loan for personal use, or a business short-term loan for commercial or investment purposes,” says director and founder Yanis Derums. The company specialises in 18
NCCP-compliant short-term bridging loans, which enable the borrower to draw down equity in their home without disturbing the existing first mortgage. “This is particularly appealing to borrowers seeking to renovate or prepare their property prior to sale,” Derums says. He says the lender’s deferred capitalised interest loans have also been well received by businesses throughout the pandemic. Mango Credit features flexible underwriting, minimal documentation and provides funding within five days of application by way of a caveat (unregistered second mortgage). For short-term commercial loans, Mango Credit specialises in providing SMEs with quick-access funds ($25,000 to $500,000 plus) for two months to three years. Derums says common funding uses for these loans include buying stock or equipment, finance for business acquisition, investments or start-ups, or working capital to smooth out cash flow. Mango Credit also offers shortterm personal loans to borrowers who are intending to sell their home and require access to the property’s equity prior to the sale. Common loan purposes include funding renovations; the deposit on a new residential purchase; settlement of a new property while the existing home sells; the payment of personal debts; and small subdivisions. Derums says Mango Credit is known for its streamlined application, flexible underwriting, and fast delivery of funding, with decisions on loan applications typically made within 24 hours. During COVID-19, the lender received deferral assistance requests
FALLING INTEREST RATES ON SMALL BUSINESS LENDING Source: APRA; RBA
Average interest rate on small business credit outstanding
%
%
5.2
5.2
Total small business lending
4.8
4.8 of which, residentially secured
4.4
4.0
Aug
Nov 2019
4.4
Feb
May
Aug
4.0
2020
“Providing short-term solutions enables brokers to extend their offering, create ‘stickier’ client relationships and add another revenue stream” Yanis Derums, director and founder, Mango Credit from many personal loan borrowers, which were universally granted. “Surprisingly, substantially less deferral assistance was sought from commercial borrowers. Both markets have now stabilised.” For COVID-affected SMEs struggling with cash flow, Mango Credit provides borrowers with the
option to capitalise monthly interest payments for up to 12 months, meaning no monthly payments. “This flexibility provides businesses an enormous cash flow benefit,” Derums says. He expects the personal lending space to strengthen in the next 12 months as confidence returns to
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Yanis Derums, founder and director, Mango Credit
the residential property market. “Short-term lending supports the market’s current and emerging funding needs,” Derums says. Brokers are therefore urged to consider the benefits of diversifying into the space. “Short-term lending fills an immediate and ongoing requirement for personal and business funding. Providing short-term solutions enables brokers to extend their offering, create ‘stickier’ client relationships and add another revenue stream. In particular, private lenders are renowned for their flexible underwriting and speed of delivery, which again assists the broker’s service proposition.” Derums says Mango Credit has been investing in its broker relationships for more than 20 years and now has a substantial network of brokers. “New broker relationships are mainly generated through referrals, which is supported through industry engagement.” “We encourage brokers to become familiar with private lending solutions, which are increasingly filling a market void.”
Aquamore Founded in 2016, Aquamore is a Sydney-based non-bank lender providing short-term commercial loans, bridging and commercial property loans. “I have worked with many non-bank lenders, and the main difference for me is that Aquamore has funds ready to be deployed, which gives us quicker turnaround times, clarity on decisions and, crucially, a competitive offering in regard to interest rate,” says Aquamore national sales manager Matthew Porch. Aquamore has a large target market for non-coded loans, including sole traders, SMEs, property developers and larger corporate firms. “We have the in-house experience to assess a wide spectrum of facilities and requirements,” Porch says. The lender’s minimum loan size is $100,000 and the maximum is discretionary, but most loans are up to $5m. Loan terms range from three months to two years, and all facilities are secured by real estate.
Matthew Porch, national sales manager, Aquamore
“We exclusively deal with brokers as we prefer having an intermediary who understands the lending landscape and can explain our product to borrowers” Matthew Porch, national sales manager, Aquamore “We have funded deals for construction, debt restructure, tax payment plans, property purchases and land banks, as well as business acquisitions and working capital injection for busy trading periods,” Porch says. “Clients are generally seeking a flexibility that the mainstream lenders are lacking.” Porch says if the relevant supporting loan documentation is received, the firm can make decisions the same day. “We are flexible in regard to loan conditions and documentation requirements; for example, if an income verification document is
still with the client’s accountant or we are waiting on a valuation report, we can approve the transaction subject to receipt of this information prior to settlement. We often settle deals within a week.” For SMEs struggling with cash flow, Porch says Aquamore understands the seasonal nature and trading patterns of different sectors. “Our facilities are interestonly in nature, so the principal is not repayable until expiry of the facility, and we are flexible in regard to purpose of funding.” Brokers play a crucial, valued role at Aquamore, Porch says. www.brokernews.com.au
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“We exclusively deal with brokers as we prefer having an intermediary who understands the lending landscape and can explain our product to borrowers.” Aquamore endeavours to keep the loan process simple through its flat management structure, and all enquiries are managed individually, putting the relationship “at the core of everything we do”. “A tailored service for our referral partners is key in my opinion to the success we seek to drive and the positive results we have gotten thus far,” says Porch. “Our loan matrix is straightforward, and our goal is clear, so we are able to make quick and effective decisions.” Having worked in the industry for a number of years, Porch says he has a wide network of brokers. “We reach out to our new referral partners through simple word of mouth and pounding the pavement to outline our unique offering to the market.” Aquamore is encouraging brokers to diversify into the short-term commercial finance space and reap the rewards. “We offer a solutions-based approach, which gives them repeat business from their client. If our loan term is six months for example, chances are the client will utilise the same broker for the exit refinance, which allows the broker to clip the ticket twice. Our business is based on relationships, so if we are familiar with a file and familiar with a referral partner, then it becomes a lot easier,” Porch says. “Regulated lending is proving
harder than ever to traverse, so diversifying into short-term unregulated lending gives the broker another income stream and an ability to widen their opportunity spectrum.” Porch says the coronavirus pandemic has resulted in “astronomical” growth in the short-term lending market as the banks turn their back on “bread and butter” commercial deals. “I think the risks have been misunderstood and miscalculated by major lenders who are using a blanket approach of COVID to decline deals and push out approval times. We have seen a large increase in volume as many good businesses struggle with short-term working capital, reduced LVRs and a general drop in confidence in the market.” Porch believes growth in shortterm loans will continue as bank appetites are squeezed by regulatory concerns and COVID uncertainty. “It’s a very exciting time, and I’m delighted to be part of it.” Eastwood Securities Mortgage Fund Adelaide-based private lender Eastwood Securities provides first-mortgage finance to borrowers using real estate as security. Operations director Peter Schembri says ESMF is managed by a team that takes a flexible approach to reviewing borrower applications. “We are not constrained by highly structured application processes,” Schembri says. “We provide a more customised service to
BUSINESS INVESTMENT COMPONENTS Source: ABS
Share of nominal GDP
10%
Machinery and equipment
8%
Peter Schembri, director of operations, Eastwood Securities
finance brokers who engage with us. If we are not able to assist, we determine that quickly so that no one’s time is wasted.” ESMF targets business borrowers, including medium-sized enterprises across most industry
of creditors, completion of partially constructed residential and commercial buildings, paying-out of business partners during business separations, and funding of new business opportunities and expansions.
“We can issue indicative letters of offer for finance within 24 hours of receiving an application or scenario briefing” Peter Schembri, director of operations, Eastwood Securities
6%
4%
Buildings 2%
Engineering 0%
1990
1995
2000
2005
2010
Adjusted for second-hand asset transfers between the private and other sectors
20
2015
2020
types seeking “intermediate term” or bridging funding support to achieve specific objectives. “Geographically, we consider locations Australiawide, including regional and rural property, as security.” Schembri says there’s no typical loan purpose for borrowers, but examples include general debt consolidation, property purchases, ATO tax debt settlement, discharge from administration by settlement
ESMF provides commercial and consumer credit regulated loans secured generally by a first mortgage over all types of real property. These are intermediate-term loans for bridging purposes, allowing borrowers time to refinance to mainstream lenders or sell down assets to discharge their loans. Loans are interest-only and range from $100,000 to $5m, with loan terms between six months and three years. Interest can be
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by providing intermediate-term loans to anybody who has property with significant equity. “We are also able to provide ‘cashout’ loans with interest and costs capitalised into the loan principal.” Schembri is positive about what will occur in the market over the next year. “We see significant opportunity in our lending space as businesses require more flexible financial solutions delivered in a timely manner to meet rapidly changing market circumstances as we come out of the recent economic downturn.”
Miles Lackmann, managing director, Kingsley Finance
paid monthly or capitalised into the loan principal. Simplicity, flexibility and speed are important features of EMSF’s loan process, making things easier for brokers. “ESMF provides personalised lending services to brokers, including support for those who might require additional assistance in managing private loan scenarios and applications,” Schembri says. “We can issue indicative letters of offer for finance within 24 hours of receiving an application or scenario briefing. Once the required application information is received and security property valuations completed, it takes just 24 hours to issue a final letter of offer (unconditional) and move to documentation. A further 48 hours and we can settle, assuming existing bank loan discharges are not required.” The broker network is important at ESMF. “We operate with a network of finance brokers who focus on the non-conforming lending space,” Schembri says. “Through a targeted approach, our staff make direct contact with brokers at various
industry functions, by calling and through our referral network. Over 10 years of operation we’ve found our most valuable referrers have come to us via a lot of personal contact work.” Schembri is urging brokers who are not operating in the shortterm lending space to branch out and diversify. He says the benefits include “attracting new clients and retaining existing clients by providing more and superior client solutions, thereby growing their own business”. The effects of COVID-19 on shortterm lending are evolving, Schembri says, as individuals and businesses come to grips with the new era of living with a disease that “constrains how we live and do business”. “Private lending has been impacted like most other finance providers mainly in regard to the impact on clients’ needs and the banking sector. After an initial softening of private lending through the first six months of COVID-19, we have seen a significant increase in loan enquiries since the end of October 2020.” EMSF is helping SMEs that are struggling with a lack of cash flow
Kingsley Finance Based in Melbourne, Kingsley Finance serves commercial clients across Melbourne, Adelaide and Sydney, offering short-term business, small business, bridging and personal business loans. Managing director Miles Lackmann says Kingsley Finance differs from other non-bank lenders in a number of ways. “We run a family office and we’re highly accessible, and brokers tell us that this is important to them,” says Lackmann. “We’ve settled loans Australia-wide, including rural areas. We cater to all loan sizes, and
loans less than $100,000 a formal valuation is not required, which speeds up the process. “We don’t have an application form – some of these can be quite daunting for brokers – and we’re happy to discuss a potential deal over the phone or via email. “We don’t have a one-size-fits-all approach and can be flexible in our assessment of the merits of each deal, so we can provide tailored solutions.” Depending on the complexity of the proposed transaction, Kingsley Finance can issue a letter of offer within minutes of receiving a loan application from a broker. Lackmann is also encouraging brokers to branch out into the short-term commercial loan space so they can obtain an additional cash flow stream. “They don’t have to be experts in the field. We let them know if the deal can be set and provide them with our loan prerequisites.” Kingsley Finance speaks to brokers with whom it has conducted regular business but also works on attracting new brokers to its network through advertising and cold-calling. Cash flow problems have affected many SME clients in the last
“We don’t have a one-size-fits all approach and can be flexible in our assessment of the merits of each deal” Miles Lackmann, managing director, Kingsley Finance we provide competitive rates.” Kingsley Finance’s target market is companies and ABN holders. Loan purposes vary and can include construction projects for small to medium developers, debt restructuring, property investment, ATO debts, and business working capital for inventory and other purposes. Products include first and second mortgage loans and construction and bridging finance. “Loan sizes range from $20,000 to $20m, secured by mortgages over residential or commercial property in major urban areas. We will also look at lending against rural, agricultural and green-wedge properties.” Kingsley Finance ensures a simple, streamlined loan application process for brokers and their clients. Lackmann says for
12 months, Lackmann says. “Obviously, the impacts of COVID19 have been severe and far-reaching and have left many businesses struggling for cash flow. “This also affects their ability to access and service debt from traditional lenders. We’ve been able to help our clients access liquidity from their assets, giving them the funds they need to bounce back without requiring regular interest payments.” Looking ahead at the next 12 months, Lackmann expects demand for Kingsley Finance products will continue to grow. “The current environment favours lenders who can help businesses by providing both a non-cumbersome loan application process, and who do not have serviceability requirements as part of their loan prerequisites.” 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 Jennings Mortgages broker Mitch Boulden won a Pepper Money Broker of the Year – Specialist Lending excellence award at the 2020 Australian Mortgage Awards. His knowledge of non-conforming loans helped an older couple with a credit file default buy their dream home THE FACTS
Client Male self-employed accountant; female high school teacher
Loan size and term $1.95m; 20-year loan
Goal To purchase and then refinance owner-occupied home
Location Woolooware, Sydney
I have known and helped these clients over many years. They wanted to purchase their dream home, and I knew there would be a number of difficulties, considering their age and the man’s previous business credit history. He is 61, a self-employed accountant in a partnership, and his wife is a 60-year-old high school teacher. The couple knew this would be their last chance to obtain a property due to their age and the market not getting any easier. We knew this was going to be a tricky one. Three years ago, my team and I at Jennings Mortgages looked high and low to get the purchase done for them. Even with 40 lenders on our panel, it fell short due to their credit file default. We knew what we had to do – get the credit file sorted and within a year they would be ready to refinance.
THE TAKEAWAYS
I have learnt from my early days that 99% of the time there is a solution and a step-by-step process to help your clients. I hate losing a deal, especially when it’s in your hands and the clients are relying on you. You can’t be narrow-minded, focusing on the lenders and the options available to you on your own panel.
If you aren’t playing in the non-conforming space, you need to be. Brokers need more options up their sleeves
THE SOLUTION
22
Aggregator Vow Financial
possible, to pay back the private lender. We did our research and soon found out that we were going to have to go with a non-conforming lender if the couple took the private loan for the purchase – with this being only a short-term fix. There was also the challenge of the self-employed client’s financial position not being up to date.
THE SCENARIO
From our initial assessment of their credit file and current financial position, it was clear that we were not going to be able to obtain finance with any bank at that time. However, I have since partnered and built trust with private lender Agility Finance and can now be more flexible and offer greater choices for clients with non-conforming loans, including solutions over one, two or three years. Before Agility Finance could send over the formal offer, it required exit strategies and the confidence of our team that we could refinance this deal as soon as
Lender Pepper Money
years”. We requested the BAS statements and organised a business valuation of what his book would be worth to provide the lender with further assurances. Pepper Money agreed and made an exception to lend $1.95m at an interest rate of 5.29% over 20 years. This meant we were able to secure the property purchase through Agility. We then started the application for a formal refinance approval with Pepper. Our clients had a long-term goal, and they believed in our team. They never imagined that they would have their dream home, as well as the positive outcome of further savings. Our clients are so happy – we are continuing to work with them to reduce their rates with our final refinance to a major bank and save a further 2% to 2.5%.
Mitch Boulden Mortgage broker, Jennings Mortgages
We reached out and contacted all our BDMs in this space, but Pepper Money was the only non-conforming lender that would assist with this deal. The couple’s owner-occupied property was valued at $2.6m and would have a payout figure of $1.95m if they proceeded with Agility. This deal was sitting at a 75% LVR. No non-conforming lender would lend that dollar value – the maximum loan would be only $1.75m. Due to the time limit for repayment under the Agility deal, we needed to provide BAS and six months’ worth of business bank statements. We have been valued brokers working with Pepper for the last 18 months. I was able to write up a great proposal to ask for an exception on the loan limit. Our positive selling point to Pepper was that “the client is an accountant and plans to work to age 80, and there’s been consistent strong growth in BAS over the
You might have to look outside the box for a solution. You need to know how to sell the deal to a bank/private lender, explain the timeline of how much it will cost, the timing of each stage and then the final savings. Be open and honest and build rapport with your client. Explain how the lender works – it’s not the client’s job to know. The main takeaway is that I really didn’t think we were going to be able to help, but if you don’t go the extra mile and ask questions of your BDMs and explore other resources, you will never know. If you aren’t playing in the non-conforming space, you need to be. The world is changing, and brokers need to have more and more options up their sleeves. Non-conforming loans are becoming more common, and brokers need to have the knowledge to offer the right solutions for their clients. AB
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PEOPLE
Do you have a question for our broker mentors? Email your question to:
antony.field@keymedia.com
BROKER ON BROKER
Origin Finance broker Kris Menon shares his thoughts on referral networks, stress, client retention and the year ahead. The Sydney resident has been in the industry for 15 years and was named FBAA Broker of the Year – Independent at the 2020 Australian Mortgage Awards
A strong referral network is a vital component of any brokerage. How do you grow a successful network? I have practised a continuous A improvement approach to growing a successful referral network. I have learnt from experience and through consultation how customers and stakeholders like to be served and to participate in the process leading to the best outcome. Our team is committed to being a well-oiled machine to ensure clear and timely communication, set clear expectations and consistently meet them; and to an honest post-process review. We have used our profile in the industry to leverage and bring success to customers and stakeholders, such as real estate agents and conveyancers, which has helped establish a reliable and successful referral network.
Q
Broking can be a stressful career. How do you cope with stress? There is no gain without pain. A I believe stress is a part of any industry that is ever-evolving. I try to stay fit physically and mentally to deal with stress and fatigue. I try to always eat healthy and ensure a good night’s sleep. I go for walks and practise yoga and meditation. I try to have a good work-life balance and spend time with family and close friends. I like listening to
Q
good music. Eye of the Tiger is my go-to song when I want to break away and come back to a stressful situation. I listen to recorded sessions by my business coach, Tom Panos, for an instant boost. Stress is an integral part of any profession. Accept it, overcome it, and use it to improve your ability to deal with it. In the competitive world of broking, how do you ensure new customers become repeat customers? I have a very basic and A time-tested approach which has worked for me. My team and I are committed to providing best-in-the-industry service with a constant focus on exceeding customers’ expectations. Here’s how we stay competitive: set clear and realistic expectations and meet them; connect with customers even after the settlement to ensure customer satisfaction and support; educate customers about new offers and valued-added services; where possible, engage with customers socially, especially new immigrants who are away from family.
Q
How positive are you feeling about the broking industry in 2021? Change and adapting to A change is an implicit aspect of the broking industry, which is often affected by external factors – the economy, environment, government
Q
Kris Menon, broker, Origin Finance
“Stress is an integral part of any profession. Accept it, overcome it, and use it to improve your ability to deal with it” and bank policies. The pandemic has changed how the world operates, and the broking industry has certainly been affected. I am optimistic 2021 will be a better year
for the industry. The government and banks have made necessary changes to their policies to support better lending and to encourage new homebuyers and investors. 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
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FE AT URES
OPINION
TECH TRENDS THAT WILL DEFINE THE MARKET The digital revolution in the finance industry will continue with open banking and cloud systems, says Kristofer Rogers of software-as-a-service banking platform Mambu – and the most successful brokerages and lenders will be those that use the most innovative technology and speed of their loan applications. Typically, a 100% digital application can be completed in under 60 minutes using real-time intelligence. In 2021, we can expect to see open banking tools being adopted more widely to offer this seamless digital application experience. Some will take it even further; – for example, providing customers with ongoing financial wellbeing insights, such as balance checks prior to a repayment being due. Innovations like these will
you reflect on 2020 and the impact the pandemic has had on Australia’s financial services landscape, it’s clear that the only constant has been change. Faced with economic instability, job losses and an uncertain future, COVID made us all sit back and take stock – of our health, our career aspirations and our finances – ultimately improving our financial literacy and making us more adept at controlling our financial health. Adding to this improved level of financial literacy, Australians now entering the workforce and taking out loans are the third generation of digital natives, with digital literacy at an all-time high. This generation has never experienced life without mobile devices and instant connectivity; they expect to be able to manage all of their financial affairs at the click of a button or the swipe of a screen. As we navigate the ‘new normal’, the most successful brokerages and lenders are those using the most innovative technology solutions to rapidly respond to shifts in customer expectations in a constantly changing landscape and ultimately win new customers. Here are three key tech trends that will define the Australian lending market in 2021 and beyond: WHEN
Trend 1: Loan origination will be reinvented with open banking Open banking is a regulatory initiative launched in mid-2020 that enables consumers to share their transactional history with trusted third-party providers. This customer-initiated data access allows lenders to extract transactional history in real time and instantly create an applicant’s profile based on spending behaviour and income. All of this is done without having to upload payslips or bank statements, drastically reducing application processing time. Lenders such as Bendigo and Adelaide Bank, with its Tic:Toc home loans, and emerging disruptor Athena, are lauded by younger Australians for the ease
the lender. Research and advisory firm Gartner predicts that the service-based cloud application industry will be worth $143.7bn by 2022 – a level of growth that will shape SaaS trends in 2021. So the year ahead will see continued adoption of SaaS for the financial services ecosystem, empowering lenders to choose the most appropriate and scalable solutions for their unique products and achieve critical points of difference in an increasingly competitive space.
With software-as-a-service, all updates, maintenance and releases are the responsibility of the provider, not the lender improve collections and avoid the unhappy path of dishonoured payments.
Kristofer Rogers General manager Australia and New Zealand, Mambu
Trend 2: Ecosytem approach will create amazing customer experiences Another challenge many lenders face is how to make all their existing systems work together to provide a seamless customer experience. Many adopt an end-to-end solution, looking for something that does it all – from onboarding and customer ledger to payments and even customer communication. However, the big challenge is vendor lock-in. While you may want to develop the best possible origination experience, you are ultimately tied to the limitations of your provider. Unplug one component, and it all comes undone. An ecosystem which handles integrations with current systems and emerging capabilities allows the use of best-in-breed technology. And while this involves more integrations, it requires fewer resources, as new providers offer software-as-a-service (SaaS), an on-demand provision where your software requirements scale as you grow and when you need it. With SaaS, all updates, maintenance and releases are the responsibility of the provider, not
Trend 3: Core banking and lending platforms set for change Throughout 2020, lenders found themselves having to pivot rapidly and help customers handle financial hardship due to the pandemic. It often proved impossible to deliver speed to market because of the limitations of their legacy technology. We therefore saw challenger banks and new lenders increase their market share by responding quickly, without being limited by their core banking technology. The year 2021 will be when many legacy systems approach the end of their life cycle, and businesses will have a chance to better position themselves for continued change by exploring new technology, such as cloud platforms that provide speed and agility while retaining the same high level of security and robustness. Several industry sectors have already been disrupted by tech innovation, including telecommunications, travel and entertainment. In the months ahead, the financial services sector can expect to see the same impacts. Ultimately, as open banking comes of age, there is now a level playing field for the big banks and nonbank lenders to adopt this new technology to better compete. AB www.brokernews.com.au
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DATA
NORTHERN TERRITORY
NSW SPOTLIGHT
Darwin’s housing prices hit record highs despite the impacts of COVID-19 According to the latest Domain report, Darwin’s house and unit prices increased 2.3% and 0.6%, respectively, over the final quarter of 2020. House prices reached their highest level in two years at $533,845. Units also posted their strongest annual growth in four years, rising 7.5% to $285,539. The city’s housing market has benefited from government stimulus, low interest rates and the successful containment of COVID-19, all of which have increased buyer demand. “The sustainability of the property market rebound hinges on continued population and economic growth,” the report said. However, it is crucial for Darwin to continue to draw interstate buyers and retain those already in the city, to further improve its employment prospects. Recently, the NT government announced the extension of its BuildBonus grant scheme, which will continue to provide cash grants until March. This extension is expected to help boost demand in the state and the city. Area
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
Metro (H)
$500,000
2.1%
0.0%
rent
yield
$450
4.9%
Metro (U)
$295,000
1.8%
-3.3%
$370
6.6%
Country (H)
$435,000
3.3%
0.0%
$493
6.1%
Country (U)
$249,000
-4.0%
-4.8%
$370
6.4%
TASMANIA
Tas HomeBuilder scheme has been a big boost to its housing market and economy Tasmania Premier and Treasurer Peter Gutwein has said the HomeBuilder scheme and the government’s construction investment have been stimulating the economy and building confidence statewide, creating a solid pipeline of work for the building and construction industries over the months and years ahead. “Job vacancies for machinery operators and drivers grew 96% over the year, while job vacancies for labourers grew 83% over the year. These are the highest and second highest, respectively, annual growth rates in the nation,” Gutwein said. The positive impacts of the HomeBuilder scheme on dwelling approvals have become apparent. Latest industry figures show that dwelling approvals in Tasmania rose by 66.5% in December 2020, equivalent to more than six times the national growth. “What’s more, in the 2020 calendar year there were 3,473 dwelling units approved, which is the highest number of approvals in a 12-month period in more than a quarter of a century,” he said. Area
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
rent
yield
Metro (H)
$545,000
2.5%
9.4%
$450
4.5%
Metro (U)
$425,000
1.3%
2.6%
$395
5.1%
Country (H)
$360,000
1.8%
9.8%
$340
5.1%
Country (U)
$289,500
2.5%
5.9%
$280
5.1%
26
SYDNEY MARKETS DIVERGING The city’s dwelling markets appear to be going two separate ways: house prices are rising while unit values decline dwelling values in Sydney rose by 0.4% in January, a look at the house and unit market segments reveals two different stories. Over the month, house prices hit $1.03m, after increasing 0.7% monthly, 2.7% quarterly and 3.1% annually. On the other hand, unit values fell to $734,198, down by 0.1% monthly, 1% quarterly and 0.6% annually. “Demand for units has diminished through COVID-19 amidst record-low levels of investor participation and changing living preferences. At the same time, supply levels are heightened in some precincts,” said CoreLogic research director Tim Lawless. “While demand and supply remain imbalanced, we are likely to see units continue to underperform relative to the detached housing market.” According to data from realestate.com.au, some of Sydney’s regions and suburbs posted significant declines in unit values. For instance, units in North Ryde reported a 13.5% drop in WHILE
values. There were also major price declines recorded in Berala (11.5%), Auburn (10%) and Parramatta (9%). The divergence between the two market segments was also observed in the rental sector. In January, house rents in Sydney went up by 2.1%, but unit rents declined by 5.6%. It’s worth noting, however, that on a month-on-month basis, unit rents grew by 8%, the first increase recorded since March 2020. This suggests the rate of decline in unit rents is easing. Another continuing trend over the month was the better performance of NSW’s regional markets compared to those in Sydney. Dwelling values in the regions grew by 9.5% annually, while Sydney reported just a 2% gain. “Internal migration data shows more people are leaving Sydney for regional areas, resulting in a transition of activity from the metro regions to the outer-fringe and regional markets,” Lawless said.
SYDNEY HOUSING MARKET INDICATORS — JANUARY 2020 Source: CoreLogic , SQM Research
All property
Houses
$879,299
4.6%
$1,034,848
5.4%
2.7%
50
Median value
Total return
Median value
Total return
Gross yield
Days on market
Units
24,062 (up by 4.5%) Number of listings
$734,198
2.8%
3.3%
70
Median value
Total return
Gross yield
Days on market
SUBURB TO WATCH: TULLIMBAR Median price (houses) $724,000
Median price (units) $515,000
12-month growth 11%
12-month growth -9%
3-year growth Average annual growth 6%
Gross rental yield
10.4%
4%
Average annual growth Weekly advertised rent
Gross rental yield
-8.8%
$500
5%
www.brokernews.com.au
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AUSTRALIAN CAPITAL TERRITORY
The ACT has the best-performing housing market of all states and territories For the first time since 2014, the ACT topped the Housing Industry Association’s Housing Scorecard report, which ranks each of the states and territories based on residential building indicators, including building activity, renovations, housing finance and overseas migration. Tom Devitt, economist at HIA, said the ACT’s steady population growth and stable labour market had put the local housing market in a good position to weather the impacts of the COVID-19 outbreak. “These have supported strong demand for new homes and renovation activity, which has been boosted by the HomeBuilder program. Activity in the first home buyer sector has also grown strongly,” Devitt said. The ACT registered strong results in the housing finance and building approvals indicators. It ranked first for loans to non-FHBs and second for loans to investors; first for approvals for multi-units and second for approvals of alterations and additions. However, results in detached housing were weaker. Area
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
rent
yield
Metro (H)
$750,000
2.9%
7.5%
$580
4.2%
Metro (U)
$475,000
1.1%
4.7%
$480
5.5%
VICTORIA
New residential tenancy rules could pose a challenge for mum-and-dad investors
HIGHEST-YIELD SUBURBS IN NEW SOUTH WALES Suburb
House
Gross rental yield
Median price
Quarterly growth
12-month growth
Average annual growth
BROKEN HILL
H
11%
$125,000
2%
-1%
2.3%
COBAR
H
11%
$122,000
-13%
-42%
-3.1%
FARLEY
H
11%
$197,000
4%
5%
-1%
HILLSTON
H
10%
$129,000
15%
-22%
3.1%
PEAK HILL
H
10%
$122,500
-16%
10%
4.6%
KIOLOA
H
10%
$525,000
-7%
-19%
11.4%
WELLINGTON
H
9%
$166,000
9%
7%
2.3%
COONAMBLE
H
9%
$110,000
-4%
-12%
0.8%
ROSEDALE
H
9%
$781,500
-4%
-2%
-1.7%
MOLLYMOOK BEACH
U
8%
$499,000
2%
N/A
15.2%
Victoria’s new residential tenancy rules lay out more than 120 changes to landlords’ obligations that will come into effect on 29 March 2021. Real Estate Institute of Victoria CEO Gil King said the changes would increase ownership costs, making property maintenance and management more complex, and could deter investment. “New costs introduced through these changes are likely to result in higher rents and could see mum-and-dad investors exit this asset class, putting further pressure on rental availability and affordability for Victorians,” King said. One of the new responsibilities of landlords will be ensuring the availability of all basic amenities, such as hot and cold water in the bathroom and laundry; functioning ovens, stovetops and sinks in the kitchen; and a permanent and working heater in the living room. Tenants will have more freedom to make simple modifications to a rental property. They will not need permission to install picture hooks, attach child safety devices, replace curtains and use energy-efficient lighting. Area
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
Metro (H)
$747,000
Metro (U) Country (H) Country (U)
rent
yield 3.0%
0.1%
5.6%
$430
$585,000
0.1%
6.0%
$420
3.7%
$422,500
2.6%
8.1%
$350
4.6%
$312,000
1.6%
8.8%
$300
5.0%
www.brokernews.com.au
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DATA
WESTERN AUSTRALIA
Prices are moving up and homes selling fast as buyer demand rises in Perth Home values in Perth increased by 1.6% monthly and 3.8% quarterly to $490,000 in January, according to CoreLogic, off the back of a strong year-end for prices in December. “With the pandemic continuing to impact travel, and our local economy bouncing back after a challenging year, more and more West Australians are recognising that now is the time to buy,” said Damian Collins, president of the Real Estate Institute of WA. Sales listings in Perth increased by 1.2% monthon-month in January, to a total of 8,287. This was still 33.3% lower on an annual basis. “However, we expect more sellers will see the benefits of listing their properties now rather than later,” Collins said. Over the month, it took an average of 21 days for properties to be sold, down from 43 days last year. “There is little doubt now that the Perth market has swung into the seller’s favour, and buyers are needing to act a lot faster to secure a property,” Collins said. Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
rent
yield
Metro (H)
$500,000
1.3%
0.2%
$380
4.1%
Metro (U)
$372,500
0.7%
0.0%
$345
4.8%
Country (H)
$370,000
3.9%
7.7%
$360
5.3%
Country (U)
$235,000
5.0%
-0.9%
$310
7.7%
Total auctions
85
Cleared
48
Uncleared
10
Clearance rate
82.8%
PERTH Total auctions
17
Cleared
9
Uncleared
3
Clearance rate
75%
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
rent
yield
Houses
Capital city
$482,500
Melbourne
0.2%
0.6%
0.6%
-2.3%
Brisbane
0.3%
1.0%
1.2%
4.3%
Adelaide
0.2%
0.9%
1.1%
6.7%
0.3%
1.6%
1.9%
3.7%
0.3%
0.8%
0.9%
1.5%
4.7%
Perth Combined 5 capitals
5.3%
$780,000 2.0%
$335
5.0%
$580,000 0.7%
3.2%
$210
$450,000
0.8%
1.4%
$270
$567,000
0.3%
$375,000
1.1%
$480,000
Sydney
Metro (U)
-4.7%
Canberra
12-month change
4.1%
1.1%
Darwin
Year-to-date change
$390
-2.4%
Hobart
Monthly change
3.2%
$283,750
Perth
Weekly change
2.1%
$202,000
Adelaide
CAPITAL CITY HOME VALUE CHANGES
$501,000
Country (U)
Sydney Melbourne Brisbane
$294,000
$0
$390,000
$100,000
$356,750
$200,000
$490,000
$300,000
$405,000
$500,000 $400,000
$520,000
$700,000 $600,000
$550,000
$800,000
Metro (H)
Country (H)
Units
$900,000
$690,000
According to the SA Housing Authority, the state has completed $10m worth of maintenance works across more than 1,400 public housing properties. The stimulus supported upgrades ranging from painting, lighting and roofing to significant works, such as new kitchens and bathrooms. The properties were also equipped with energy-efficient solutions. Michelle Lensink, Minister for Human Services, said the works were completed quickly and efficiently and supported 160 SA jobs. “The $10m maintenance stimulus is now complete and was a deliberate and targeted response to keep local contractors in jobs and ensure our construction and building industry is supported at this unprecedented time,” she said. “It’s not only boosting work for our trades but making life better for our tenants.” The $10m stimulus was part of the $75m commitment of the government towards its new housing strategy. A further $21.1m maintenance stimulus is expected to be completed by mid-2021.
28
ADELAIDE
MEDIAN HOUSE AND UNIT PRICES
Now complete, the SA stimulus scheme for public housing supported 160 jobs
Area
Auction markets returned a strong result on higher volumes in the first week of February, with the combined capitals’ weighted average preliminary clearance rate holding above 80%. All capital cities recorded clearance rates above 70% as volumes surged higher after the festive period slowdown. There were 1,287 homes taken to auction across the capital cities, with a preliminary clearance rate of 83.8%. This was higher than the 81.8% rate the previous week covering 884 auctions. The previous week’s clearance rate was revised down to 77.2% by final figures. In the same week last year, auction numbers were lower – 1,167 homes went under the hammer for a final clearance rate of 67.7%. In Melbourne, there were 592 auctions with a preliminary clearance rate of 80.8%, compared to 390 auctions and 80% final clearance the previous week. In Sydney, 449 auctions were held with a preliminary clearance of 89.1%, compared to 270 auctions the previous week and final clearance of 76.7%.
$645,500
SOUTH AUSTRALIA
WEEK ENDING 7 FEBRUARY 2021
$850,000
Area
CAPITAL CITY AUCTION CLEARANCE RATES
*The monthly change is the change over the past 28 days
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BRISBANE CANBERRA Total auctions
59
Cleared
38
Uncleared
Total auctions
84
Cleared
47
Uncleared
16
Clearance rate
74.6%
3
Clearance rate
92.7%
SYDNEY Total auctions
449
Cleared
318
Uncleared
39
Clearance rate
89.1%
TASMANIA
MELBOURNE Total auctions
592
Total auctions
1
Cleared
395
Cleared
0
Uncleared
94
Uncleared
0
Clearance rate
Clearance rate
80.8%
n.a.
Note: A minimum sample size of 10 results is required to report a clearance rate.
QUEENSLAND
Area
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
rent
yield
A shortage of homes is pushing up prices and rents on the Sunshine Coast The number of properties available for sale on the Sunshine Coast has reached its lowest level in more than a decade. Undersupply in the rental market is even worse, with vacancy rates down to 0.4%, the lowest in over 15 years, according to SQM Research. Image Property’s Sunshine Coast sales agent Matt Nickerson said the strong sales market could be attributed to local buyers, contrary to popular belief that interstate purchasers are the main drivers. “Local buyers are out in force, competing strongly for the few listings available. We do have a lot of enquiries from interstate, and quite a few sales, but this is actually motivating local buyers to make their move sooner rather than later,” he said. In terms of rentals, the region was undersupplied long before the pandemic. Residential Tenancies Authority figures show that the median weekly rent for a three-bedroom house was $490 in December, an annual increase of 6.5%.
Metro (H)
$560,000
0.9%
280%
$410
3.9%
Metro (U)
$399,000
0.0%
0.0%
$385
5.1%
Country (H)
$458,000
1.0%
1.0%
$400
4.6%
Country (U)
$396,000
1.9%
3.5%
$350
4.7%
Source: Except where otherwise stated, all data sourced from CoreLogic, December 2020
NICK YOUNG: TRAIL BOOK SALE EXPERT Sell your book. Keep your clients. Release working capital or start succession planning. 03 8508 6666 | 0417 392 132 | nyoung@trailhomes.com.au | trailhomes.com.au www.brokernews.com.au
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PEOPLE
Aggregator Mortgage Choice
IN THE HOT SEAT
Mortgage Choice franchise owner Deslie Taylor decided to become a broker in 2007 after 15 years in banking. The MPA Top 100 broker is based in Ormeau on the Gold Coast
What was your first job before you joined the finance industry? I was a barmaid for five to six years … and you learn A in the hospitality industry to liaise with people from every single walk of life. After that, I moved to a bank as a teller and then became a consultant, before eventually evolving into a role on the lending side of the bank.
Q
What led to you becoming a broker? Deslie Taylor, owner, Mortgage Choice Ormeau A At the bank I became exhausted from long-term clients that were being denied credit approvals. Sometimes it was nothing to with credit policy but rather Q What is the most difficult aspect how the credit team felt about the deal. I was at the front of being a broker? line, having to tell these people their credit was declined, and When you’re dealing with clients who don’t want to take your A guidance there was nothing I could do about it. It encouraged me to look or your expertise into consideration and they walk away. at other avenues of finance, broking in particular. The reason You might say to them, “It’s going to take another six months, and you’re I chose Mortgage Choice was that I still wanted to be very not ready right now. If you try this, it’s going to destroy your credit rating, transparent with clients, and the ‘paid the same’ policy was a and it’s going to destroy you financially, so we need to give you time.” You drawcard. It was also about making sure I could get the client the do everything you can to set the client up and get them ready, and you right deal to suit their needs. say, “We can’t do it today because the loan is going to be declined.” That same person comes back to you after three months, and after visiting three different brokers, and expects you to fix the mess. It can be very What do you love most about your Q role as a broker? difficult to continue to educate that person that they’re just not ready. When a client sits in front of you and they say, “I’ve got a curly A one for you”. To know that you can educate them that their If you could change one thing about the broking industry, Q what would it be? situation is unique and they’re not an ‘outside the box’ scenario. I love being able to sit down with a client and educate them about their The stigma. Sometimes people see brokers as having that same A stigma as used-car salesmen – that brokers are only there to line financial position. Once they understand what they’re doing, understand what their goals are, and understand what their needs their pockets. Is it really what’s best for me, or is it how the broker is are, they’re able to make better decisions and are so appreciative. going to earn more money? More people need to be educated about what Customers are your biggest advocates. a broker does, and the stigma needs to change. AB
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www.brokernews.com.au
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SWITCHING PAYS Refinance cashback
3000
$
Switch your client’s home loan to Westpac and they could get $3000
First refinance application. Apply by 31/03/2021. Owner Occupier P&I and Investment Loans. Premier Advantage Package ($395 annual fee) and Flexi First Option Loans. Max LVR 80%. Min loan $250k. T&Cs, exclusions, fees apply.
westpac.com.au/brokers
Things you should know: Credit criteria, fees, charges apply. T&Cs available at Westpac. Offer current as at 18/09/2020. Apply by 31/03/2021 and settle by 30/06/2021. Available on Owner Occupier Principal and Interest repayments and Investment Loans. Only 1 $2,000 cashback per property refinance will be paid regardless of the number of loans involved. Only 1 $1,000 bonus cashback will be paid for the initial application regardless of the numbers of customers, properties or applications involved. Offer may be varied or withdrawn at any time. Minimum loan size $250k. Excludes Equity Access Loans, switches and refinances of home loans within the Westpac Group which include St.George, Westpac, Bank of Melbourne, BankSA and RAMS. Offer not available for Owner Occupier Interest Only loans or residential lending originated under family or company trusts. Premier Advantage Package terms and conditions apply. $395 annual package fee applies and is payable from an eligible Westpac Choice transaction account. You must hold a Westpac Choice transaction account to qualify and receive the benefits of the Premier Advantage Package. Read the Westpac Choice transaction account terms and conditions and consider if it’s right for you. See westpac.com.au. The cashback will be paid into a Westpac Choice transaction account within 60 days of settlement. The transaction account must be linked to the home loan at the time of settlement and kept open for 60 days after settlement. Tax consequences may arise from this promotion for investors and customers should seek independent advice on any taxation matters. © Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714. 21052/0121
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