Australian Broker 18.06

APRIL 2021 ISSUE 18.06

JAMES SYMOND Home loan volumes are soaring at Aussie as its broker network expansion continues, while a planned merger with online home loan platform Lendi will give the trusted brand a technological edge /14 ALSO IN THIS ISSUE… Big changes at Westpac The bank is selling its LMI arm and merging its consumer and business divisions /04 Opinion Lawyer Joseph Trimarchi urges caution on credit repair /24 Fintechs embrace customer revolution As demand for faster, smarter technology grows, fintechs are making the most of new opportunities in lending /16

Broker channel breaks records Despite the pandemic, brokers settled a whopping $107.5bn in residential home loans in six months last year /12

How Mortgage Choice backs its brokers The aggregator’s top franchisees discuss their successes and how Mortgage Choice supports their business growth /20

Caught on camera Inspired by Women event celebrates female business leaders /25

NEWS

IN THIS SECTION

Lenders Westpac plans to sell LMI division to Arch Capital /04

Aggregators Connective ramps up education for brokers /06

Market Regulatory strain leads to spike in broker retirements /10

Industry bodies Broker channel settles record number of home loans /12

Technology 86 400 partners with OCR Labs to make digital VOI easier /08

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

U.S. MORTGAGE RATES HIT HIGHEST LEVEL IN NINE MONTHS mortgage rates climbed for the fifth consecutive week despite the Fed’s announcement on 17 March that it would keep its benchmark interest rate at zero.

The 30-year fixed rate mortgage was up four basis points to 3.09% week-over-week.

The uptrend may have been caused by several market conditions, according to Freddie Mac chief economist Sam Khater. “As expected, mortgage rates continued to inch up but are still hovering around 3%, keeping interested buyers in the market,” Khater said. “However, residential construction has declined for two consecutive months, and given the very low inventory environment, competition among potential homebuyers is a challenging reality, especially for first-time homebuyers.” The average rate for a 15-year fixed loan also rose to 2.40% from 2.38% the week before.

US

www.brokernews.com.au APRIL 2021 EDITORIAL

SALES & MARKETING

Editor Antony Field

Publisher/Sales Manager Simon Kerslake

News Editor Mike Wood

Global Head of Media Marketing Lisa Narroway

Production Editor Roslyn Meredith

ART & PRODUCTION

CORPORATE

Designer Cess Rodriguez

Chief Executive Officer Mike Shipley

Production Manager Alicia Chin

Chief Operating Officer George Walmsley

Traffic Coordinator Kristine Jamir

Managing Director Justin Kennedy Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil

EDITORIAL ENQUIRIES Mike Wood +61 2 8437 4792 mike.wood@keymedia.com

SUBSCRIPTION ENQUIRIES

$1.9TRN IN STIMULUS SEEN AS POSITIVE FOR U.S. HOUSING MARKET Biden Administration’s US$1.9trn stimulus package has been signed into law and is making its presence felt in the US economy. While markets have already priced in the level of federal spending in the form of higher rates, what will it mean for the housing market and the mortgage industry? Clear Capital executive VP of corporate strategy Kenon Chen said the stimulus could give more flexibility to homeowners with new equity who are looking to improve their properties with refis or pay off debt. Wedbush Securities managing director Henry Coffey said the impacts should come in the form of overall consumer confidence in the economy. He expects that even if rising rates hit affordability, at a macro level there’s more than enough housing demand to absorb that extra cost.

THE

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ADVERTISING ENQUIRIES Simon Kerslake +61 2 8437 4786 simon.kerslake@keymedia.com.au Key Media Australia (Mortgage) Pty Ltd Regional head office, Level 1O, 1–9 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 fax: +61 2 9439 4599 www.keymedia.com Offices in Sydney, Auckland, Denver, London, Toronto and Manila

EQUIFAX CANADA PLATFORM WILL HELP BROKERS IDENTIFY FRAUD has launched its ClearPro platform, which is designed to ensure consumer trust by providing brokers and brokerage owners with the tools to identify indicators of fraud within their businesses. Carl Davies, head of fraud and identity at Equifax Canada, described the platform as a constantly active background screening tool that will help reduce costs associated with fraud. The system accomplishes this by checking multiple data sources, such as credit file databases, proofs of identity and previous history. “ClearPro accesses Equifax’s robust data assets, including our proprietary credit file database, to check for anomalies in an individual’s financial and credit history,” the company said. It also cross-checks input information against Equifax data assets to identify and confirm any misuse of name, address, phone numbers by an agent or broker.”

EQUIFAX

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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.

Justin, surfing pro

Mark, lawn bowls enthusiast

Fernanda, loves regional Victoria

Masih, Persian BBQ connoisseur

Dino, Italian food lover

Alan, motorbike fanatic

Sarah, women’s advocate

A network that celebrates you

“

Home loan specialist with heart.

With LNS you get the best of both worlds: The support of a team and the freedom to build your own business. We celebrate you as an individual, while offering the benefits of a strong and vibrant community.

Helping people is not just a 9-5 job for Maria Finneran. While by day her passion is to help homebuyers find the finance solution to suit their needs, out of hours, one of her many activities is volunteering with St Vincent de Paul helping the homeless. It’s with this compassion and empathy that Maria helps customers get financial and into a new home, whatever their circumstances. Thank you, Maria.

...PS, and when I’m not helping you build your business; you’ll find me on the bike.

- Brendan O’Donnell Managing Director, Liberty Network Services

Maria, volunteer

We’re more than just an aggregator, because you’re more than just a mortgage broker.

To find out more about becoming a Liberty Adviser, visit liberty.com.au/LNS.

Inspiring borrowers and footballers alike.

Whether it’s securing a loan or securing a win on the football field – as a broker and coach, Brett Foster knows the importance of having a strategy in place to achieve one’s goals. Waking before 5am to carry out his own fitness regime each day, Brett brings the same discipline and determination to his work - staying sharp to help more people get financial. We reckon that makes you best on ground, Brett.

Brett, coach

NEWS

LENDERS NAB APPOINTS WAUGH AS HEAD OF BROKER and NSW Waratahs rugby player Phil Waugh has been appointed as new executive of broker distribution at NAB. Waugh has switched from Westpac, where he was previously head of private wealth north, leading a team of more than 200 employees.

Waugh, who played 79 Tests for the Wallabies, has also held senior roles at St. George Bank and CBA. “Phil is an exceptional leader and experienced banker, with a proven track record in driving great customer outcomes,” said NAB executive home ownership Andy Kerr.

EX-WALLABIES

RESIMAC SLASHES RATES FOR SELF-EMPLOYED lender Resimac has announced cuts to its suite of specialist mortgages aimed at self-employed borrowers. It has slashed interest rates on its Specialist Full Doc and Specialist Alt Doc products by 50 basis points. Mortgage rates now start at 3.37% for Resimac Specialist Clear. Resimac general manager for distribution Daniel Carde said the move would provide self-employed clients with access to credit. “There are many Australians who don’t fit into mainstream mortgage lending products and who will need more support this year.”

NON-BANK

“Westpac is pleased to be entering into a long-term partnership with Arch, as LMI is an important product that helps make homeownership more accessible” Jason Yetton Chief executive, specialist businesses and group strategy, Westpac

Commercial Loans

Jason Yetton, chief executive, specialist businesses and group strategy, Westpac

WESTPAC TO SELL LMI ARM TO ARCH CAPITAL There’s been a lot happening at big four bank Westpac in recent weeks, including a plan to sell its lenders mortgage insurance division was a momentous month for Westpac.

It announced it was selling its lenders mortgage insurance arm, boasted for a short time the lowest fixed interest rate for home loans, and revealed a major internal reshuffle.

Westpac broke the news on 18 March that it would be selling Westpac Lenders Mortgage Insurance Limited to Arch Capital, with a 10-year exclusive supply agreement for Arch to supply LMI services back to the bank. This deepens the relationship that the two have enjoyed for a decade, since Arch began providing MARCH

reinsurance services to Westpac.

The deal will be priced at book value from the time of completion, with Arch making small annual payments back to Westpac. The sale has yet to go through regulatory approval, but it is estimated to be complete by the end of August.

Westpac expects it will result in a seven basis points rise in its Common Equity Tier 1 capital ratio, although it will record a loss on sale this financial year due to separation and transaction costs, along with a $84m write-down in goodwill that the bank announced in its 1Q21 update.

“Westpac is pleased to be entering into a long-term partnership with Arch, as LMI is an important

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product that helps the group make homeownership more accessible for more Australians,” said Westpac chief executive, specialist businesss and group strategy, Jason Yetton.

“The sale continues the simplification of our business and builds on our progress in becoming a simpler, stronger bank focused on consumer, business and institutional banking.”

Westpac also reduced its two-year fixed home loan rates to 1.79% and its three-year fixed rate to 1.88% on 9 March, the lowest available on the Australian market until a week later when Homestar Finance offered a two-year fixed rate of 1.74%.

It was also revealed last month that Westpac plans to merge its consumer and business sections to reduce costs and drive efficiency.

Guill Lima, chief executive of the business division, will depart, and head of consumer Chris De Bruin will take charge of the new consumer and business division.

NEWS

A G G R E G AT O R S FINSURE STRENGTHENS LEADERSHIP TEAM has bolstered its sales leadership team, appointing Phillip Donaldson and Noushig Megerditchian as joint state managers for NSW, and Paul Gollan, Chris Pastsouras and Damien Thompson as state managers for Queensland, Victoria, and SA and WA respectively. Its BDM teams will be boosted by Russell Adams in NSW, Toni Warren in Queensland, Daisy Yu in Victoria and Lauren Cosier in NSW. FINSURE

KANE EXITS RETIREMENT FOR LOAN MARKET ROLE Mark Haron, managing director, Connective

NAB general manager of broker distribution Steve Kane has come out of retirement to take a senior role at Loan Market Group. Kane retired in November after almost 30 years in the industry but will now assume the position of head of integration – people and strategy at Loan Market. The aggregator is in the process of bringing PLAN Australia, Choice and FAST brokers under its banner.

FORMER

CONNECTIVE EXPANDS LEARNING AND DEVELOPMENT FOR BROKERS Live events in the broker industry are returning as COVID-19 restrictions ease and aggregator Connective ramps up the education of its broker network is to continue its partnership with Melbourne Business School to help brokers keep up with the latest industry developments.

Brokers can access a portal of live and on-demand content, lender updates and workshops – all designed for a remote working environment and a changing regulatory landscape.

This year marks a return to in-person events with Connective’s National Commercial and Asset Finance Conference and National Conference back in 2021, alongside more than 140 virtual events to be run by the aggregator.

CONNECTIVE

Education is at the forefront of many brokers’ minds in 2021.

Their ability to cope with the challenges of the pandemic is now reaping rewards, with broker market share on a high.

“Brokers were able to communicate more effectively and faster with their customers than the banks were able,” said Connective managing director Mark Haron.

“Education was crucial because there was a big education piece that needed to go into the payment pause program and, of course, brokers got onto that quickly.

“I think they’re also a little bit more financially literate, which was

important because they then turned around and educated their customers, had those conversations with them. I think brokers adapted much quicker to those policy changes than the banks and a lot of the bank staff.

“Brokers have been great educators of their customers, and that’s leading to broker market share increasing.”

Connective has improved the program it began with Melbourne Business School in 2020, based on feedback from brokers.

“I guess one of the big learnings that you have from last year is that brokers want to hear more from professional educators that is not necessarily specific to writing a loan or what they do on a day-to-day basis,” said Haron. “It’s more about resilience, how to manage themselves, how to manage a team.

That’s been a big part of our focus last year and going into this year.”

“Brokers want to hear more from educators that is not necessarily specific to writing a loan … it’s more about resilience, how to manage themselves [and] a team” Mark Haron Managing director, Connective

Simon Bednar General manager of aggregation, Finsure

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NEWS

TECHNOLOGY DIGITAL BANKING REVOLUTION ON ITS WAY fifth of bank customers’ retail transactions are expected to be done on mobile phones by 2025, according to the latest Fintech and Digital Banking 2025 (Asia Pacific) IDC InfoBrief. Commissioned by Backbase, the report shows that 90% of Australian banking customers will be “open” to mobile transactions.

While it says 80% of banking assets in Australia will still be owned by the big four, it expects there will be 100 new financial institutions in the Asia-Pacific by 2025. The use of AI is expected to boost retail banking revenues by 20%.

A

UK’S RAILSBANK PARTNERS WITH NEOBANK VOLT fintech Railsbank has launched in Australia in partnership with neobank Volt as part of a drive to expand the country’s embedded finance market. Embedded finance involves integrating a financial service or technology with a traditionally non-financial service, product or technology. UK-based Railsbank, which will operate under the name RailsPay in Australia, will use Volt’s Backend-as-a-Service platform and infrastructure to distribute products such as bank accounts, cards and payment solutions to customers.

GLOBAL

“86 400 has kicked off 2021 as we mean to continue – with a slew of smart features already in production and partnerships in planning” Robert Bell CEO, 86 400

Robert Bell, CEO, 86 400

86 400 PARTNERSHIP UPGRADES DIGITAL IDENTIFICATION 86 400 has joined forces with OCR Labs to make customer identity verification a whole lot easier and faster for the lender 86 400 has partnered with an Australian fintech to “further streamline” its customer and broker experience in the mortgage space.

OCR Labs provides 86 400 with a new verification of identity system, introducing additional security enhancements to the neobank’s processes through the use of biometrics. The latest development further refines the streamlined experience the lender has aimed to offer since its launch.

According to 86 400 CEO Robert Bell, the announcement is just one of many the neobank plans to make in the coming year.

“We’ve kicked off 2021 as we NEOBANK

mean to continue – with a slew of smart features already in production and partnerships in planning,” Bell said.

“OCR Labs is the first cab off the rank this year, providing our customers with a market-leading banking experience that’s smart, secure and convenient, underpinned by the very best home-grown Australian technology.”

The VOI solution provided

by OCR Labs can be completed via smartphone in as little as two minutes. Instead of meeting face-to-face, home loan applicants can take a photo of their ID documents, ensure their data has been captured correctly, and take

a selfie with liveness detection to confirm their identity.

OCR Labs chief customer officer Will Ryan said 86 400’s innovative approach to mortgages was “transforming the way Australians purchase and refinance properties”.

“Our latest biometric technology now plays a key part in 86 400’s home loans application process, verifying the identity of new mortgage customers securely and with ease,” he said.

The companies’ partnership was finalised following a successful pilot of OCR Labs’ technology in the 86 400 call centre late last year.

Bell said 86 400 would continue to focus on streamlining its application and approval processes.

“After breaking our own records for home loan applications in November and December, our aim is to build on this momentum, ensuring even more Australians now have the opportunity to save thousands on their home loan.”

OUTLOOK AND OPPORTUNITIES FOR AUSTRALIAN BANKING BY 2025 Source: Backbase Fintech and Digital Banking 2025 (Asia Pacific) IDC InfoBrief

8

20%

80%

By 2025, it is forecast that 20% of bank customers in Australia will do their retail transactions on mobile devices, and 90% of customers will be “open” to mobile transactions

The big four will still dominate 80% of banking assets. Challengers will have failed to make a dent among the incumbents as earlier wins in market share will not be sustained. Banks – challengers and incumbents – will focus on the basics of origination and servicing on core products such as deposits and loans

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20% The use of AI for customer management is expected to increase revenue in retail banks by 20% and wealth management by 15%

TECHNOLOGY UPDATE

FINSURE GROUP SET TO LAUNCH TIME-SLASHING SOLUTION

Simon Bednar, General Manager, Finsure Finance & Insurance and LoanKit Aggregation

best-in-class technological solution, soon to be released by award-winning aggregator the Finsure Group, will eliminate double handling and digitise a host of timeconsuming tasks.

“We’ve kicked off an internal project with NextGen.Net – a new technology piece we’re building that will circumvent the current double handling of documents,” says Simon Bednar, General Manager of Finsure Finance & Insurance and LoanKit Aggregation.

“At the moment when a broker uploads documents into Infynity they have to download them a second time and put them onto their hard drive before they can upload them into ApplyOnline.

“This new piece of technology will enable the documents to be sent concurrently – similar to email attachments – and appear automatically in ApplyOnline.

That will go a long way to saving time and effort for the broker.”

The solution will also incorporate their new customer portal.

“That’s important to mention because it’s where NextGen.Net and Finsure work really well together,” says Bednar.

“Our customer portal will allow customers to upload their own documents on behalf of the A

broker. The broker will see the documents immediately in Infynity, confirm they’re correct and hit a button to send them to ApplyOnline along with the application data. They’ll go across immediately.”

Bednar estimates that this will result in a time saving of “around 50 per cent” because, as he explains, “as part of that process we have a tax file number and sensitive data reduction piece of technology”.

Key integrations between NextGen.Net’s ApplyOnline and Finsure’s cloud-based broker CRM platform Infynity streamline and automate processes, dramatically saving time and cutting costs.

Bednar speaks of the responsiveness of the NextGen.Net team in relation to what Finsure wants to achieve.

“Recently we sat down with our NextGen.Net national Customer Account Executive Greg Phillips and discussed what our IT landscape and roadmap look like. Greg was very accommodating in identifying new opportunities and suggesting solutions we may want to consider. All of which I’m finding very useful and helpful.”

Phillips says NextGen.Net and Finsure share the same vision, “to digitise and streamline

Greg Phillips, national Customer Account Executive, NextGen.Net

the entire mortgage lending process”, and that the seamless integration of ApplyOnline with Infynity is “a holistic solution for their brokers”.

“We work collaboratively with Finsure to ensure our systems talk to each other in a highly sophisticated manner to eliminate double handling and streamline the process from point of sale all the way to the lender’s approval,” Phillips says.

“In terms of strategic planning, we look at Finsure’s roadmap and, as much as possible, align it with our roadmap.”

Bednar says he runs ideas by Phillips and laughing adds, “Greg will then sanitise them”.

“It’s very useful,” he says.

“We are a very entrepreneurial business; we own and control everything we build.

Consequently, we’re able to move a bit quicker than other platforms. Quite often when I say to Greg, have you thought about this or can we do this, he comes back to me and says, you won’t believe it, but we’ll be rolling something out later this year that does exactly that.

“That’s where the relationship works really well strategically.”

Keen to take advantage of what open banking, the Consumer Data Right and NextGen.Net’s acquisition of Frollo might mean for the

business, Bednar is excited about brokers being able to access borrowers’ data directly from banks to inform an application.

“That’s exactly what I’m looking for, to have as little third-party integration and interaction as possible.

“It was great to see that NextGen.Net had that breadth of knowledge outside of submissions,” he says.

Relying on Finsure’s relationship with NextGen.Net to cover “efficiencies and accuracy”, Bednar says ApplyOnline “carries the burden for ensuring the data that banks want is there and accurate”.

“That’s a huge piece of work in itself,” he exclaims.

“We keep our platform open to allow brokers to be a little bit more fluid in how they collect the data, and the idea of them sending it to NextGen.Net is great for me because they effectively become the quality insurer and checker that allows our system to be efficient and accurate so when it goes to the lender the data is complete.

“From a strategic partnership perspective that’s powerful.

It enables me to focus on what I do well, provide business value to the broker, and them to do what they do really well, which is about data accuracy and efficiency.”

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NEWS

MARKET PANDEMIC DRIVES FALL IN BANK PROFITS across the banking sector fell sharply in 2020, according to APRA data. The news comes despite the ongoing boom in housing and property. APRA’s Quarterly ADI Performance and Quarterly ADI Property Exposures reports show a significant drop in profits for the quarter, and year, ending December 2020. Profits came to $21.9bn, over a third lower than the same period in 2019. APRA said this was due to a fall in total income caused by COVID-19, without a concurrent drop in spending.

PROFITS

BRISBANE EXPERIENCES RECORD-LOW VACANCIES rental vacancy rates in Brisbane have broken a decade-long record, according to SQM Research. But vacancy rates in Melbourne and Sydney are going in the opposite direction, with Melbourne showing twice as many vacant rental properties as last year.

Just 1.5% of properties on the rental market in Brisbane are unoccupied.

Diaswati Mardiasmo, chief economist at Queensland-based real estate firm PRD, said this was due partly to the COVID-19 pandemic and partly to rental oversupply causing Australia’s biggest two cities to struggle.

FALLING

Nick Young, director, Trail Homes

RISE IN BROKERS SEEKING EARLY EXIT FROM INDUSTRY The rapid pace of regulatory change in the finance industry might be contributing to a big spike in brokers seeking early retirement, says Trail Homes director has been a huge rise in brokers selling up their trail books and heading off into the sunset, according to Trail Homes.

The trail book buying company has announced a 56% year-on-year turnover increase, which it puts down to a massive rise in brokers calling it a day on their careers.

A combination of the pandemic, the fallout from the Hayne royal commission, and increased regulations have resulted in many older brokers deciding to quit the game ahead of schedule.

While the pandemic was not the biggest trigger of retirements, it provided a break that saw many in the industry take stock of their position, the company said.

THERE

“Anything that causes change causes people to stop and rethink,” said Trail Homes director Nick Young. “The pandemic, compounded by ongoing legislative and regulatory disruption, has resulted in people universally reflecting upon and re-evaluating their lives. The mortgage broking industry is no exception. This reprioritisation has been the driver for above-expected numbers of brokers entering retirement.”

While brokers had been able to keep pace with technological changes and new ways of working, recent regulatory reforms may have contributed to their decisions to sell their books, Young said.

“We don’t see a correlation

in the increase in the pace of business nor technological advancements having a material effect on older brokers’ decision to retire,” said Young.

“Conversely, the ongoing legislative and regulatory disruption, as well as the dayto-day impacts of best interest duty and the like, has had its toll.

Consequently, the pandemic has hit an already-fatigued industry, and as such, ‘short-circuited’ the decision to retire for many.

“We highly recommend that brokers speak to their accountant as soon as they start to consider retirement as it’s important to assess their current and long-term financial position.

This should be integrated with an overall retirement plan that supports long-term lifestyle goals.

It’s absolutely critical to have a carefully planned exit strategy, developed well in advance, and ideally done in collaboration with an accountant.”

“We don’t see a correlation in the increase in the pace of business nor technological advancements having a material effect on older brokers’ decision to retire” Nick Young Director, Trail Homes

BROKER TRAIL COMMISSION BY STATE, APR—SEPT 2020 Source: MFAA Industry Intelligence Service, 11th Edition

Average annual gross trail commission per broker, prior to costs* $80,000

77,109

$70,000 $60,000

70,465 67,212

$50,000

75,984 67,014

66,191

61,753

48,131

$40,000 $30,000 $20,000 $10,000 0

NSW and ACT

Vic

Qld

WA

SA

Tas

NT

National average

* Brokers’ gross trail remuneration from residential lending, prior to all costs and before meeting any commercial obligations with aggregators, is an estimate.

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NEWS

INDUSTRY BODIES CAFBA WELCOMES CHANGE TO RESPONSIBLE LENDING has backed the removal of responsible lending obligations (RLOs) in line with the Senate Economics Legislation Committee recommendations. The committee recommended the Senate pass the NCCP bill, but a vote has been delayed until May. The peak body for commercial brokers, in its submission to the Senate, said the legislation would replace RLOs with the best interests duty – extending BID to all consumer transactions, which was a “positive step for best customer outcome”. CAFBA said the bill would not affect commercial deals.

CAFBA

COBA: MOBILE CUSTOMERS NEED BETTER PROTECTION Customer Owned Banking Association is supporting federal government moves to strengthen ID verification as fraudsters gain access to mobile phones. COBA director of services and financial crimes Leanne Vale said criminals were adapting to new technology and exploiting it to gain access to mobile phone SIMs through card swapping and mobile porting. “Most people won’t realise the crime has occurred until the phone displays ‘SOS only’, signalling a loss of phone service. At that point, the damage is done.”

THE

“The national average value of home loans settled per broker rose above $6.5m for the first time in five years” Mike Felton CEO, MFAA

Mike Felton, CEO, MFAA

PANDEMIC NO BARRIER TO FLOURISHING BROKER CHANNEL — REPORT The broker channel settled $107.5bn in residential home loans in six months last year, the highest value since reports began in 2015, according to the latest MFAA industry intelligence report new MFAA report shows that brokers survived the onset of the COVID-19 pandemic and, indeed, thrived in spite of it.

The 11th edition of the MFAA Industry Intelligence Service report, released on 19 March, charts how brokers fared in the six months from 1 April to 30 September 2020, encompassing the initial set of lockdowns and the first Australian recession in almost 30 years.

It draws on information provided by 12 of the biggest aggregators.

The report revealed that the broker channel settled $107.51bn in residential home loans during that period, the highest six-month value recorded since the MFAA commenced reporting in 2015 and A

a rise of 24.5% year-on-year.

The average value of home loans settled per broker grew by almost $500,000, average annual broker earnings went up by $10,000 to $151,722, and the number of home loan applications lodged totalled 307,000, exceeding 300,000 for the second consecutive six-month period.

The total value of home loans settled in Australia in the year ending September 2020 reached $211bn, topping $200bn for the first time. Broker market share of new residential loan settlements was also at a new peak.

“Mortgage brokers facilitated 57.0% of all new residential mortgages in the June 2020

quarter and recorded their highest-ever market share of 60.1% in the September 2020 quarter,” said MFAA CEO Mike Felton. “This result was indicative of a strong performance across the board from the nation’s mortgage brokers throughout the six-month period, as the average number of applications lodged per active broker jumped from 19.6 to 21.4, while the national average value of home loans settled per broker rose above $6.5m for the first time in five years.”

Felton said that while average trail commission rose mildly, upfront commissions grew by a significant 25.29% to $84,758.

“April to September 2020 was a challenging and yet rewarding time for the mortgage broking industry, as brokers provided tireless support and assistance to their customers, helping them navigate the challenges posed by the COVID-19 pandemic and the recession,” Felton said.

SPIKE IN BROKER EARNINGS IN 2020 Source: MFAA Industry Intelligence Service, 11th Edition

Total value of loans settled

Total loans $107.51bn Apr–Sept 2020

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Average gross annual broker earnings

24.5%

Apr–Sept 2020

$151,772

Compared to Apr–Sept 2019

Oct 2019– Mar 2020

$141,329

7.39%

INDUSTRY UPDATE

THINKTANK: HELPING BROKERS GROW IS OUR BUSINESS improved business efficiencies.

Similarly, we have improved our commercial lending SLA turnarounds, as well as invested in more staff and integrated digital technologies to enhance processes and service levels.

This has paved the way for our Relationship Managers (RMs) to spend more time with brokers and less time on administration through streamlining systems.

Thinktank, we have always recognised the value and importance of our broker network. In fact every loan application is referred to us by a broker. This is why we have always had the ethos, “how do we help a broker grow their business and add value for their clients?”

For us, the broker remains the central part of every transaction. It is the broker that owns the relationship with their customer, retains customer loyalty, and meets their customer’s current and future financial needs through the sourcing of appropriate credit and lending solutions. They are a trusted source and conduit for their clients, which is why we place so much importance on gearing our products and services to best meet the needs of every broker.

AT

How we help through our products We take broker feedback very seriously. As a result, we are constantly reviewing our pricing, as well as modifying and improving our loan products and policies. Our new residential offering for self-employed and SME customers is a prime example.

Through broker engagement and feedback, it was clear that self-employed and SME customers required more flexible and alternative lending solutions than your average PAYG borrower. We had to offer a better solution for brokers to meet these varied needs.

Although Thinktank is well known as a commercial property lender for purchase, refinance and equity release, we have the flexibility and capability to consider all forms and structures for all types of borrowers, including SMSFs. So our response was to introduce a residential offering to provide alternative lending options that can assist all types of borrowers, from PAYG to self-employed customers, sole traders and SMEs. The product range largely mirrors our commercial suite, including Full Doc and Mid Doc Loans that are specifically designed for self-employed

Peter Vala, General Manager Partnerships and Distribution, Thinktank

applicants with one form of income verification. We also offer Residential SMSF options up to 80% LVR. A further benefit is that, as our product type and LVR bands drive our pricing model, interest rates will not change unexpectedly during the credit process unless the LVR changes.

This approach of pricing certainty ensures there are no fee or interest rate surprises within the final approval.

How we help through our education With our industry-leading approach to broker support, there are no minimum education or volume requirements to deal with us. If a broker has never written a property-backed commercial loan before, we are here to help. We’ll provide consistent hands-on assistance, and serve as a guide from start to finish on the broker’s commercial loan journey.

We believe it’s critical to never stop learning and growing. So, just as brokers continually educate us on the market and customer needs, we also offer brokers the opportunity to increase their commercial knowledge through both formal and informal education sessions.

We hold sessions for all types of commercial lending (property-backed or otherwise), SMSF lending, and even prospecting for new business.

How we help through our technology and SLAs As a business, we are always looking for a better way.

With Thinktank expanding further into the residential lending market, so did the demand for technological improvements. This has seen us implement a series of fully and semi-automated solutions that now enable more constructive use of time and

How we help through our team Thinktank has always assisted brokers through our RM Model – a dedicated team fully equipped and empowered to assist with any scenario and application through to final credit approval and settlement.

Access to credit is always available, and transactions can be workshopped at any time.

The close relationship between our RMs and brokers enables discussions about transactions and scenarios to take place prior to actually submitting any transaction.

These discussions and ability to assist with deferments, equity release, restructuring loans to improve cash flow, and even growth opportunities have proven to be incredibly valuable. This flex and agility was critical during 2020, and remains just as important as the market continues to face COVID-related challenges.

Working hand-in-hand with our broker partners supports and enables them to respond quickly to the changing market and needs of their customers, whether that’s meeting a funding need, saving money by reducing costs, improving monthly cash flow, or saving time and hassle by reducing covenant compliance measures like annual reviews and regular revaluations.

We are always happy to workshop transactions. And if it doesn’t fit with Thinktank, we will do our best to help introduce a solution elsewhere that meets the needs of the client. Our primary aim is to help brokers remain at the centre of all transactions, offering real value for their customers to strengthen and grow these relationships. AB

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COVER STORY

MATCH-FIT AUSSIE ON TRACK FOR GROWTH Aussie Home Loans’ plan to grow its broker franchise network in the midst of the pandemic is paying off with surging loan volumes. A proposed merger with fintech Lendi could be the icing on the cake, giving the household name a technology boost.

Aussie CEO James Symond chats to Australian Broker about the company’s recent success and goals

is a glass-half-full kind of guy.

Nothing seems to get in the way of his boundless optimism. Certainly not last year’s recession and certainly not COVID-19.

Instead, Aussie’s CEO has led the brokerage on an ambitious growth path. He talks to Australian Broker about the success of the company, broker market share, lender turnaround times, and Aussie's planned merger with Lendi.

“When COVID first hit, many businesses ducked for cover and put the brakes on spending. Not our business. We forged ahead on a massive recruitment drive,” says Symond.

“In fact, we’re currently looking at recruiting another 200 new mortgage brokers within a 12-month period and looking to extend our national store footprint in more local communities. So, while the world put their hard helmets on, we just went out there and said charge ahead.”

The growth strategy is on track and working well.

“Today, we’ve got more stores than ever, and more brokers than ever before. Our goal is to ensure that any customer anywhere can talk to their local Aussie broker.

“So, we will finish 2021 with about 230 stores, and by the end of the financial year we will have in excess of 1,050 brokers.

“Collectively, our brokers are busier than ever. We’re having record-breaking and stellar months, as are most mortgage brokers across our industry today, because the home loan market and real estate environment is generally on fire.

JAMES SYMOND

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“We are having some of our biggest months ever in terms of lending output. Over the last calendar year, Aussie’s settled loan volume rose by 11% to $17.7bn, driven largely by demand from refinancers, while loan volumes for 'next home’ buyers during the same period rose by 17% and a 28% lift in loans for first home buyers.”

Economy, interest rates A robust economy has also helped, with unemployment falling to 5.8% and low interest rates.

“Look at how strongly the Australian economy has been bouncing back,” says Symond. “The latest unemployment figures are quite stunning compared to where we all thought they would be.

“Firstly, there’s a lot of surplus cash there. Some mums and dads have got plenty of spare cash which they have saved over the last 12 months because they haven’t gone anywhere. Number two, interest rates are at an all-time low.

Number three, there are some great government incentives particularly for first home buyers, which is really helping people into their first home.”

Refinancing is dominating Aussie’s business.

“About 33% of all our loans are consumers refinancing either, a, for a better deal, or b, for renovations.

We are seeing some consumers save thousands of dollars on their home loan just by refinancing.

“The banks have become complacent in terms of existing customers’ interest rates, and if the banks won’t budge, well, the customer should shop around for a better deal.”

Brand, brokers, market share Aussie has become a household brand over nearly three decades, says Symond.

“We’ve never been in a better position, and I’m really proud of where we are today. We’ve established a culture, systems and processes that really help mortgage brokers succeed.

“When I started this business with my uncle [John] nearly 30 years ago, mortgage broking wasn’t really on the Richter scale, so to see it at 60.1% is awesome. I have a personal view that if the trajectory keeps going the way it’s going, over the next five years broker market share will surpass 70%.”

“We can take someone who has a customer focus, a great work ethic and passion and turn them into a professional mortgage broker” “The number of mortgage brokers that we have all the time that are in the top categories of best mortgage brokers in Australia is always very impressive. I’m very proud of that.

“We’re one of the rare brokerages that can take someone who has a customer focus, a great work ethic and lots of passion and turn them into a professional mortgage broker.

“We’ve got some stores that are writing half a billion dollars a year in settlements, which is quite extraordinary.

“Some of our best brokers didn’t start out in banking or finance.

Among our top brokers, we have talent from diverse backgrounds such as ex-customs agents, ex-policemen and ex-teachers. We’ve invested heavily in our training and development programs backed by a world-class support structure that can help them to succeed.”

Broker market share is at a record 60.1%, according to the MFAA.

Symond says mortgage broking is growing because of consumer satisfaction – once a consumer deals with a quality broker, the repeat business is enormous.

“Mortgage broking is very much consumer-driven and repeat business.

Consumers want choice, and that’s what has made this industry and certainly our business successful.”

Lender turnaround times Turnaround times have blown out tremendously in the last four to five months, says Symond.

Aussie has discussed turnaround times with lenders and in conjunction with the MFAA, but “ultimately the lenders and banks will do what they believe is commercially best for them”, Symond says.

“We have our own home loan product called Aussie Select, which has excellent turnaround times.

As of March 2021, customers can expect an approval within just two

In partnership with

James Symond, CEO, Aussie Home Loans

or three days on average, compared to many lenders on our panel with an approval turnaround of two or three weeks on average.”

Merger with Lendi CBA owns Aussie, and it was the bank’s decision to merge the business with Lendi, Symond says. The merger should be finalised in a few months.

“Aussie is a tremendously well established trusted household brand with a truckload of brokers and truckload of stores. Lendi, from a digital point of view, are number one in their field and they have some excellent technology which would take us a very long time to build,” he says.

“Technology is front and centre of most things a mortgage broker does, yet the face-to-face interaction with customers underpinned by the right

tools and technology will become even more important than ever. Ultimately, this deal is about enhancing the Aussie experience for customers, and it should make it easier, faster and smarter for our brokers to run their business.

“Lendi has been around for seven years, and they’ve built themselves a good business, and they’re progressive, and I’m optimistic that Aussie can really benefit from that.

“If [the merger] is done carefully and responsibly and we build upon the values of both businesses, it could turn out to be an amazing success story.”

End of JobKeeper, COVID-19 Australia's property boom has yet to benefit from open borders and the return of migrants and international students.

“Australia is at the forefront across the world in terms of economic recovery. Once the US and European marketplace recovers and opens up, Australia’s real estate market will boom to new heights.”

Symond believes the end of JobKeeper won’t have a huge impact on the economy.

Future growth Aussie has never been in better shape, from branding and broker footprint to culture, says Symond.

“2021 is shaping up to be a stellar year for Aussie, and our business has never been stronger.

We’ll continue to invest in our diversified products and services and ensure that we continue down the path of meeting a wide range of customers’ property and finance

needs in more innovative ways.

“The ongoing challenge has been that our bark is louder than our bite, because the numbers of brokers, the numbers of feet on the street, the numbers of stores are nowhere near where we want them to be.”

That is why Aussie is rolling out more quality stores and brokers.

“The number of enquiries we get every month is extraordinary. It’s about having that large catcher’s mitt to be able to catch that business and turn it into a longterm customer,” Symond says.

“By mid-2023 we know we will have 300 stores, we know we will have in excess of 1,200 brokers, and then the next stop after that is 500 stores. We won’t stop – the brand, the people and the business deserve the growth.” AB

AUSSIE: BY THE NUMBERS

Loan settlement volumes rose by 11% to $17.7bn over 2020 calendar year

28% lift in loans to first home buyers over 2020 calendar year

230 stores and 1,050 brokers by the end of 2021

By mid-2023, Aussie aims to have 300 stores and 1,200 brokers

Highest lodgement quarter Q2, FY21

Forecasting a settlement value of $19bn for FY21

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MARKET VIE W

TECH LEADERS SHAKING UP THE FINANCE INDUSTRY In the digital age of instant gratification, consumers are demanding quick and easy access to loans, and their needs are being increasingly served by fintechs using the latest technology coronavirus pandemic has certainly accelerated the rise of fintechs and the creation of sophisticated technology to provide a multitude of lending solutions.

KPMG’s Fintech Landscape 2020 report released in December shows there are 733 active fintechs, up from 629 in September 2019. There has been particular growth in fintech lenders, especially those serving the consumer and SME markets, as well as neobanks. FinTech Australia, the peak body for fintechs, has released THE

ANZ to share their thoughts on fintechs, how the sector is disrupting traditional lending, and what further technological changes we can expect.

OnDeck CEO Cameron Poolman says OnDeck is highly focused on delivering rapid finance to small-to-medium enterprises and helping them reach their full potential.

“We know from OnDeck’s bespoke research that the SME market can be neglected by banks. As a result,

“Fintechs are demonstrating that there is an easier, faster and more streamlined way to deliver the funds SMEs need to seize business opportunities” Cameron Poolman, CEO, OnDeck Australia the EY FinTech Australia Census 2020 report, showing that fintech lenders and challenger/neobanks are on the rise.

The report, produced in conjunction with EY Financial Services, shows that lending makes up 29% of the sector, the secondbiggest fintech type after payments, while challenger/neobanks comprise 14% of fintechs.

There has also been strong investment in large scale-ups, including Athena Home Loans and Judo Bank, and ASX listings such as Plenti Group. More recently, there are plans to merge Lendi with Aussie Home Loans.

Australian Broker asked non-bank SME lender OnDeck Australia, car loan brokerage CarClarity, FinTech Australia and 16

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one in four SMEs have been rejected by mainstream banks when it comes to securing commercial funding,” says Poolman. “Among those that do secure funding, the same proportion – one in four – face lengthy delays that have actually cost the business in terms of things like delivery of products or hiring new staff.”

Poolman says OnDeck, as a dedicated SME lender, is filling the gap with a truncated application process and rapid approval times.

SMEs have a strong reputation for embracing change, and this combined with COVID-19 is helping drive interest in fintechs such as OnDeck. The company’s own research shows growing awareness among SMEs of specialist online lenders such as OnDeck.

“They are eager to explore new

AUSTRALIAN FINTECHS: BUSINESS BASES 2020 Source: FinTech Australia and EY Financial Services’ EY FinTech Australia Census 2020

0% NT 0% WA

1% OVERSEAS lending options that cut red tape from the loan application process and deliver faster loan approval times and turbo-charged delivery of funds. The expression ‘time is money’ absolutely holds true for the SME sector,” Poolman says.

As a fintech, OnDeck takes a forward-looking approach to credit assessment, rather than the rear-vision view that traditional banks use, he says.

“This matters because it’s rare for SMEs to face exactly the same market conditions in the future as they have in the past. And never has our forward-looking approach been more relevant than during the pandemic, when SMEs have faced exceptional circumstances that are not indicative of normal trading conditions.”

There is an increasing level of competition among fintechs, but Poolman says there are factors that set OnDeck apart from newcomers.

“OnDeck has the combined benefit

2% SA

10% QLD

55% NSW 31% VIC

1% ACT

1% TAS of proven technology and a wealth of customer data built up over many years of being in operation. Rather than basing lending decisions on past business results, OnDeck is harnessing the power of our data to assess the credit risk that a business poses.”

The lender uses its proprietary credit scoring methodology – OnDeck Score® – drawing on thousands of data points to identify the financial health of a business based on cash flow, credit history and various business attributes. “This is a significant competitive advantage for OnDeck as it allows us to provide timely finance offers, often in just a couple of hours, that are within an SME’s capacity to repay.”

OnDeck’s “high-tech, high-touch” approach provides a team of skilled BDMs to help SME customers and brokers, Poolman says.

“Brokers love the fact that when they partner with OnDeck they benefit from the support of a dedicated BDM

Cameron Poolman, CEO, OnDeck Australia

who is specifically trained to be part of our broker team. This training includes time working as a loans specialist in our direct channels to better understand our products, processes and credit decisioning.”

Poolman is encouraging brokers to consider OnDeck as a fintech solution for their SME clients, with in-house research showing that 50% of SMEs turn to a broker for their capital requirements.

“We don’t ask our customers for any upfront security on loans up to $250,000, so SMEs don’t have to nominate a house or another asset as security – we just ask for a director’s guarantee.”

OnDeck’s average loan size is double that of its nearest competitor, says Poolman.

“We’re able to do this because as a fintech we make smart use of data and modelling rather than relying on backward-looking financials.

Our products are tailored to SME needs, and for us, transparency is the key feature that builds trust. We’re about clear and fair finance with no surprises, so neither brokers nor their customers will encounter any hidden fees or charges in our small print.”

The SME lender also champions the use of the SMARTBox loan comparison tool, which allows brokers and clients to understand the true cost of business finance, while brokers and SMEs are also encouraged to use OnDeck’s business credit

Zaheer Jappie, founder, CarClarity

score calculator, Know Your Customer.

OnDeck’s fast and efficient application process involves a one-page form and a maximum of six months of bank statements.

Poolman says fintechs have shown that the traditional, paperwork-heavy approach of mainstream banks is highly outdated in today’s digital world. As a founding member of FinTech Australia, OnDeck will continue to be part of a collective voice on industry developments such as open banking.

“Broadly speaking, fintechs are demonstrating that there is an easier, faster and more streamlined way to deliver the funds SMEs need to seize business opportunities,” says Poolman.

“Collectively, we are making intelligent use of data to assess the credit risk a business poses. This has paved the way for bank lenders to rethink their SME lending processes, particularly against the backdrop of open banking.”

CarClarity CarClarity can be thought of as a fintech brokerage but for car loans, rather than residential homes or commercial lending.

The Sydney-based business was established in March 2020 and has already grown from five staff to 15.

Founder Zaheer Jappie says CarClarity provides a simple-to-use platform that connects borrowers with more than 30 different car finance lenders.

“It matches each customer with lenders based on the optimal price and loan terms for that individual’s needs,” he says. “Once the best borrowing option is chosen, borrowers are guided through an online application process to secure their financing. We operate as a broker function but focus on the digital customer experience

fintech competitors.

“Our first thing is our people.

We believe we have built a strong, experienced team and all share the same values in our customer obsession.

“Our second thing is our overall customer experience. We want to ensure customers start digital

“We are leading innovation in Australia for car lending and giving customers an online, instant and transparent experience” Zaheer Jappie, founder, CarClarity and have smart integrations.”

Consumer expectations of fast results are helping fintechs such as CarClarity make inroads into the lending market.

“We now buy everything online, and everything is instant. This customer expectation has moved to financial services, and each year different financial products start to innovate more. We are leading this innovation in Australia for car lending and giving customers an online, instant and transparent experience in car financing.”

Jappie says there are three factors that set CarClarity apart from its

and obtain 90% of what they need online and then speak to an experienced adviser to make an informed decision on car financing.

“Thirdly, we invest heavily in innovative technology and are leading the charge in fast, reliable and transparent car financing solutions that are transforming the way Australians shop for and finance cars.”

The COVID-19 pandemic was unexpected and unfortunate but has created opportunities in car financing and purchasing, Jappie says. “It has favoured a more online digital approach, which puts www.brokernews.com.au

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CarClarity in a great position.

“Due to travel restrictions and social distancing laws, we have seen an increase in private sales, particularly of larger four-wheel drives, with customers doing more local travel and camping. Our demand actually went up as people focused on near-new used cars as new-car stock

new innovations are on their way.

“We are always working on simplifying the opaque process that is applying for car finance, and had multi-variations over the last year,” Jappie says.

“In terms of what’s to come, we are implementing digital ID/biometrics validation and integrating an open

“With more of everyday life becoming digital, we are striving to continually provide helpful, easy-to-use and convenient solutions” Simone Tilley, general manager retail broker, ANZ intake dropped due to COVID.” With tech evolving there is also more data available from industry sources to help make data-driven products accessible to customers.

“Open banking will open a lot of doors, but we still rely on larger institutions to improve their technology stack/APIs [application programming interfaces],” Jappie says.

Technology has already changed since CarClarity began a year ago, and

banking platform to assist customers in completing an online application.

We are also launching a dealer finance solution to assist with regulatory changes towards the end of the year.”

Jappie says CarClarity is pro open banking.

“Our financial health does mostly sit within our bank accounts, and utilising this data for finance applications will make it simple for customers to obtain, move and grow their financial needs with ease.

AUSTRALIAN FINTECHS: TYPES OF BUSINESS* 2020

2019

Payments, wallets and supply chain

30%

Lending

29%

Data, analytics and information management/big data

22%

21% 21% 28%

Business tools

19%

20%

Wealth and investment

18%

31%

Marketplace-style or peer-to-peer solution

15%

15%

Regtech

15%

16%

Challenger/neobank

14%

Asset management and trading

10%

8% 13%

Insurance/insurtech

5%

11%

Identity, security and privacy

5%

7%

Blockchain/distributed ledger solution

5%

9%

Digital/crypto currencies and exchanges

5%

8%

* Multiple responses given. Other and mentions <5% not shown Source: FinTech Australia and EY Financial Services’ EY FinTech Australia Census 2020, Based on surveys of fintechs in July–August 2020

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Simone Tilley, general manager retail broker, ANZ

“This will allow smaller institutions like CarClarity to compete with large incumbents because we will have a very big picture of the customer’s financial position.”

There are plenty of reasons why brokers should use CarClarity.

“Our ambitions are to provide tools for anyone. CarClarity’s platform is partner-friendly, and if a non-asset-finance broker has a client we would happily assist,” Jappie says.

“I think we are bringing more awareness to customers about brokers. We have a very firm stance on the disadvantages of not going to a broker, which we advise the customer on. Our main goal is seeing a customer get the right information to make an informed decision, whether with us or with another broker.”

The fintech sector is growing in Australia, Jappie says.

“We will see a lot of players locally become global businesses as there is more venture capital flowing into Australia. However, there will be a huge shortage of tech talent due to COVID and visa implications.

“Globally, more and more fintechs are becoming bigger than traditional incumbents, and in 2020 alone we saw a lot of public listing activity.”

ANZ Big four bank ANZ has been using the latest digital technology to simplify its home loan process.

Simone Tilley, general manager retail

broker, says the two key technological tools the lender delivered in the early days of the pandemic were ANZ eSign and ANZ eVerify. These were designed to support ANZ brokers and customers with simple, digital approaches to managing their identification and signing requirements, endeavouring to save time and paper.

“And in September we launched Illion Access Seeker to enable all ANZ brokers to undertake credit checks on customers,” Tilley says.

ANZ eVerify is focused on a digital ID process for the bank’s home loan customers satisfying Know Your Customer and verification of identity requirements electronically.

“This seeks to significantly reduce the need for most customers to attend an ANZ branch, which saves them time and is convenient,” Tilley says.

ANZ eSign is a customerfocused digital signature and document execution process. It has been enabled in LoanApp and ApplyOnline to save significant time for both brokers and customers.

“With more of everyday life becoming digital, we are striving to continually provide helpful, easy-to-use and convenient solutions.”

Illion Access Seeker is a free service for all ANZ brokers. Brokers are able to credit-check customers and are provided with a report of a consumer’s comprehensive credit history information that is fully aligned with ANZ’s credit assessment process.

Rebecca Schot-Guppy, CEO, FinTech Australia

Tilley says the bank offers a range of training resources and support for its broker partners who wish to use these tools, including a broker portal that has content and process guides.

“The absolute backbone of our support is formed by our awardwinning national BDM team. We also run both a fortnightly broker webinar series and a point-in-time update via webinar and BDM.” As well as offering eVerify, eSign and Illion Access Seeker, ANZ is also building its broker operations team in size and capability.

“This is to improve our application assessment times and protect our SLAs across all channels,” Tilley says.

When it comes to future tech developments in the mortgage space, she says ANZ expects to see continued automation across the industry, for the benefit of lenders as well as brokers and aggregators. “[We’re] using data and analytics to reduce the number of steps we ask brokers and assessors to complete to improve our time to first decision and significantly reduce rework, shortening our time to final decision, and to better understand our customers to ensure we are providing good outcomes for brokers and customers.”

Tilley says ANZ is hoping for a return to “a bit more stability and normalcy following COVID”.

“In ANZ Broker, our plan is to focus on the continuation of our automation and digitisation agenda to

enhance our home loan processes so we can provide a smoother experience for customers and brokers.”

Over the next 18 months, ANZ also wants to continue to support the professionalisation of the broking industry by delivering a first-class education and training program for brokers and bankers, Tilley says.

“And of course data – we’ll continue to lead with data and insights so we can share data that is both quantitative and qualitative in nature.”

FinTech Australia The peak body for fintechs has more than 300 members, a big leap from the 50 members it had when it launched in 2016.

Measuring the growth of the fintech ecosystem has been a focus of FinTech Australia, says CEO Rebecca Schot-Guppy.

“We know the sector is growing … however, counting the precise total number of companies in Australia is difficult. Many of these studies are self-reporting, and founders are incredibly busy people. Others rely on the business needing to raise funds before being counted as an active company,” she says.

But thanks to the EY Fintech Census 2020, the group has a sense of the sector’s maturity.

“More than 78% of companies in it are post-revenue, and the majority, 61%, have been in business for over three years,” Schot-Guppy says.

There are plenty of good reasons

why fintechs are having such an impact on residential, personal and commercial lending.

“Fintechs are incredibly customercentric,” Schot-Guppy says. “Products are only launched where there is demand. Many fintech founders are former bank or financial services company employees. In their roles, they spotted ways that their company could improve their service and have ported this experience to their own company.”

She says home loan lending plays a huge role in Australian culture, and the sector has a history of disruption, with companies like Aussie and Wizard leading the charge.

“The difference now is that new innovations are being driven by new technology. Fintechs are finding ways to operate on leaner margins and provide superior customer service while still being fully compliant lenders.”

While COVID-19 has driven changes in technology, Schot-Guppy argues that for fintech lenders change has happened in spite of the pandemic rather than as a result of it.

“The biggest technological advancement we saw last year for the sector was the introduction of open banking. This could have easily been delayed due to the

Fintechs are also putting pressure on traditional banks to improve their services and rates by educating Australians on how to find better deals for their loans. Athena Home Loans is one example.

“For years, major banks have tried to build their brand around being a life partner for the consumer, supporting them on their journey to buy a house and then retire.

There are countless ads depicting this,” Schot-Guppy says. “Athena, however, ran a counter-message as an advertising campaign: Take out a loan with us, and it’s our goal to help you shed your debt as quickly as possible.

Love us and leave us.”

She says fintechs are changing the dynamic of lending and using technology and innovation to back up that shift. “That education piece is crucial and is what is ultimately leading to better competition for consumers and also a more robust sector.”

There are also actions the government could take to create a stronger, more competitive fintech market. Schot-Guppy says last year it introduced a Term Funding Facility giving ADIs access to the cheapest debt on record.

“The effect of this is the big four banks have been able to draw down on this and give fixed loans at rates that

“Fintechs are finding ways to operate on leaner margins and provide superior customer service while still being fully compliant lenders” Rebecca Schot-Guppy, CEO, FinTech Australia global pandemic but was pushed through by the government. Services harnessing open banking in lending are being developed as we speak.”

Open banking will bring a huge shift to the lending sector.

“Consumers often sit on a loan and don’t refinance due to the hassle of it. Open banking, however, promises to make this process as simple as clicking a few buttons. It’s going to make the sector hyper-competitive.

“Admittedly, change due to open banking will be slow, but I believe we’ll start to see signs of it this year,” Schot-Guppy says.

Consolidation is already occurring among neobanks, for example with NAB moving to acquire 86 400, but she says this will strengthen the remaining neobanks, and the same trend has happened in the UK.

non-bank lenders or smaller ADIs can’t compete with. To maintain competition in the sector, we recommend the government allow greater access to the AOFM funding facility to allow fintechs to compete on rates.”

FinTech Australia is also calling on the government to better standardise the discharge process for loans in anticipation of further competition, and to waive discharge fees.

“Finally, we welcome the government introducing an annual nudge to consumers on how the interest rate of their loan compares to the broader market,” Schot-Guppy says. “However, we argue that this nudge should use the comparison rate, rather than the headline rate, as it’s a stronger indication to consumers of the value they are receiving from their current lending arrangement.” AB www.brokernews.com.au

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ROUNDTABLE

MAKING RIGHT CHOICE BRINGS REWARDS The economy is rebounding, the property market is booming, and Mortgage Choice is riding a wave of success. Australian Broker caught up with the aggregator’s key leaders and top-performing franchisees to discuss its support for brokers, new products on offer, the impact of new technology, and lender turnaround times How does Mortgage Choice support you as a franchise owner, especially your lead generation program and marketing resources?

Q

George Boustani: I am getting a lot of support with social media content.

It makes it really easy, just a click of a button. There’s a platform called Metigy that they have supplied to us for free, which is amazing. That just enables us to plan our marketing and social media for the whole month ahead. There’s definitely been a tick up in head office leads, and they’re a lot easier to convert. The branding has increased substantially over the last 12 months.

Leanne Johnstone: I have been a Mortgage Choice franchisee for almost 20 years, and the brand has continued to grow from strength to strength. The brand helps enormously and enhances credibility. In terms of head office leads, being part of a strong brand like Mortgage Choice certainly benefits. Obviously, the best leads are referrals from existing clients, and we’re really fortunate to get lots of those. Also, the size of the network – that means for newbies coming in there is this great brand that other people are recommending, providing you with the opportunity to get more quality leads.

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James Algar: As a bigger business, I like the fact I can drop in and out of what Mortgage Choice supplies to us. I know there are certain things I can turn on if I want them, the leads etc., but I’ve also got the freedom to push that stuff back so I am not ramping it up at a time when I’m insanely busy already. The new website, the traffic through our website, is all much better now.

The MFAA just released Q the latest figures on brokers’ December quarter market share, which is at 59.4%. So it’s a great time to be a broker?

David Zammit: Established brokers like the group here are absolutely flooded with [business], but a lot of new brokers coming in are not finding that. Being able to set people up for that lead generation and get their business working from the start is absolutely key to success, because we know that somewhere between 40 to 50% of those brokers will drop out in the first two years because of the lack of leads. In January/February we’ve had the largest two months in the last couple of years of acquisition of both franchise owners and loan writers. We’re likely to get to, by the middle of the year, a double-digit percentage increase in loan writers across the network.

How important is technology to your role?

What have been the main changes in the last 12 months, and where is tech heading?

Q

Jane Vaughan: Technology is absolutely vital. Since COVID we definitely can’t live without it,

and with working remotely. With the level of complexity in putting an application together now from every lender, the previous systems we’ve worked on before would never have coped with DTI, servicing requirements and living expenses. The platform we have is really good – it works; it’s reliable.

“When I speak to friends who are with other aggregators, they just do not have access to the level of information that we get” Jane Vaughan, franchise owner, Mortgage Choice because there’s a lot fewer face-toface meetings, and we’re doing a lot of video conference meetings. I like it, clients like it. The technology’s amazing. I can be sitting on a boat in Thailand – if we can ever travel again – or working remotely, wherever you are on holidays. It’s an amazing job because you can pick up your computer and take it with you.

James Algar: A lot of the new technology Mortgage Choice has bitten the bullet investing in over the last two or three years. Had that not happened, the challenge of COVID would have been damn near impossible. It’s transformed our ability to cope with those changes

Leanne Johnstone: Broker Platform is an invaluable program.

When I’m running loan scenarios with clients and sharing the program, I often get the response ‘Wow!’ In one place you have personal details, financial details and the ability to calculate borrowing capacity, repayments and show loan comparisons. It’s great the way it populates ApplyOnline and it’s easy to send clients information in a clear and logical format.

George Boustani: This new File Manager, which is linked to Broker Platform, that’s saved me from having to hire an extra admin person. Just with the task

In partnership with

ROUNDTABLE PARTICIPANTS

Susan Mitchell CEO, Mortgage Choice

David Zammit

“There’s a direct correlation between the quality of a BDM and the level of business we send to that lender” James Algar, franchise owner, Mortgage Choice management, follow-up and the streamlined process – that’s enabled my office to become a lot more efficient in following up files, dealing with customers, emailing clients. It’s quite automated, easy to use; it’s very user-friendly. You can’t get it wrong, and anyone can do it. That enables us to spend more time on marketing and improving the customer experience.

Jane Vaughan: Through our online lending centre we have a wealth of information available to us. When I speak to friends who are with other aggregators, they just do not have access to the level of information that we get. We can search the toolkit for so much information, ie supporting documents required, lender policy, LVRs. They’ve thought of absolutely everything. It’s a go-to, and it saves us a lot of time without having to go back to the BDMs. That’s of huge value to me.

Has there been much feedback from clients about the new technology and ways to communicate?

Q

Susan Mitchell: We hear from customer satisfaction surveys, and they’ve come back and said they love the customer experience. They also love their broker. We have also gotten great feedback from people that look to buy a franchise, who say, “Wow, this is completely above other ones I’ve just gone and looked at”.

David Zammit: If you look over the last 10 or 15 years at relationship businesses such as mortgage broking, the client loved their broker, but the process they had to go through with the bank would have been painful.

We’re seeing processes and technology catch up with the relationship. I went through the process the other day as a Mortgage Choice client, and I didn’t need to touch a piece of paper; I didn’t need to go anywhere. It was really, really easy, painless and simple.

The residential property Q marketing is booming. How are you taking advantage of this, and what do you see happening in the next 12 months?

Jane Vaughan: I believe it’s just going to keep going up. At the moment it’s the houses that are in absolute boom, but once everybody can’t afford a house, it’s going to filter through to the unit market. As soon as everybody can fly in from overseas, there’s a lot of people who are going to say, “I have residency in Australia, and that’s where I want to be when they have the next lockdown”. My thoughts are, get in now, it’s just going to keep going up.

Leanne Johnstone: With the booming market, we are swamped with new leads, referrals and existing clients pursuing new opportunities.

We are doing a record number of applications and pre-approvals. Many

people are finding that properties are going for 10–20% more than what they expected. There is still a real lack of supply; however, I’m hoping more properties will come on the market soon as confidence continues.

Refinancing has also been on the increase, with incredible rates and substantial refinance rebates being offered. Lots of renovation loans too.

Susan Mitchell: We had a real bubble of refi go through. It’s in our results package – you can really see it peaking in May and June and the approvals then flowing through in August and September. Our refi was up to 60% of our volumes, and the historic numbers are much closer to 35 and 45%. It’s now come back to more historic levels.

Lender turnaround times blew out during COVID-19.

Are they improving, and how is Mortgage Choice tackling the problem?

Q

Susan Mitchell: We’re working with the MFAA and the other aggregators and talking as a group to the different banks. We’re also talking individually to the banks, but we’ve also introduced a new white label called Propel that has a very, very short turnaround time.

We’re hoping that will give another lender opportunity to our customers that they can turn around a bit faster.

George Boustani: It’s important to manage the customer’s expectation.

I’m trying to take advantage of our broker priority status, which is Flame with St. George, Platinum with Westpac and Teal Tribe with CUA, because the turnaround times there are a lot different. When a customer’s on a cooling-off period, it is in their

General manager broker and wealth management distribution, Mortgage Choice

Jane Vaughan Franchise owner

George Boustani Franchise owner

Leanne Johnstone Franchise owner

James Algar Franchise owner

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21

FE AT URES

best interest if they want that property to get that loan in a timely manner.

A lot of these lenders are offering good rates and quick turnaround times.

driver of the decision-making process than what it has been. Having the infrastructure to be able to go across 30 different lenders and ask, what’s the credit policy look like, what’s my turnaround time look like – having that infrastructure in place is really, really key. It’s very difficult to be able to navigate that matrix otherwise.

Leanne Johnstone: There’s gradual improvement in turnaround times at present; however, it is still key to manage clients’ expectations.

Lenders are pedantic. They are still approving loans; however, they are understandably thorough and often require additional information. The turnaround times with lenders have blown out with increased volumes and lending requirements. Most brokers and lenders are working long hours and weekends – I had calls from two assessors on Australia Day.

Jane Vaughan: I used to use the banks a lot, and I’m using more non-bank lenders these days due to turnaround times. Also, the banks typically do not offer competitive retention pricing for existing clients when the time comes to look at a home loan health check, say three years after a fixed rate loan, whereas the non-bank lenders are more aggressive about retaining their clients.

Susan Mitchell: Mortgage Choice also monitors the service levels. It’s in our system. We actually track it live, and it shows up when you are looking at the different lenders. It will show you in the system where they are with their turnaround times so you’re aware at the time when you’re picking a lender where they're at.

How does the new white label product Propel ensure fast turnaround times?

Do you expect more products like this to enter the market, or will future products look entirely different?

Q

James Algar: Our lender spread is much greater now. A lot of this involves sitting with a client and going, “Hey, you see all these traffic lights here – any one of these mainstream banks would give you the loan as long as you’ve got six weeks to wait for them to get around to it”. We’ve got good options with other smaller lenders where I think people’s sense of urgency is driving that business to other brands, and I think that’s good.

The big banks need to understand that as brokers we do control a bigger share of the market now.

Susan Mitchell: It’s very clever technology, and they’ve got everything built in. Bankstatements.com.au takes all the information in; it does a quick decision – it’s actually risk-based pricing – and then it comes back to the broker to let them know what the rates are going to be for the customer.

George Boustani: I think artificial intelligence is the way forward. We have to embrace it. It works well because the technology enables us to look at living expenses, do automated valuations and offer quick turnaround times. It needs to move forward in dealing with more complex situations. At this stage it’s more for vanilla applications.

David Zammit: Credit policy and turnaround time is a far greater

James Algar: The technology exists in other markets around the world.

Turnaround time and confidence in a decision is a big driver of people’s choice. Having an option like that for someone going to auction tomorrow is good – even six months or a year ago, getting an approval for a bank in that time was impossible. In this day and age we want answers now.

Propel’s probably the first cab off the rank in terms of an actual live model, but every one of the fintechs behind the scenes is chasing the same nirvana.

Susan Mitchell: They [lenders] will get the more complicated ones. It will become less and less vanilla. There will always be space where you’re

MORTGAGE CHOICE AT A GLANCE

518

Broker numbers

loan writers (as of 9 March)

$54.1bn loan book (as at Dec 2020)

22

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344

franchise owners (as of 9 March)

22%

growth in settlements in six months to Dec 2020

33

Lending panel

residential lenders

3

commercial lenders

2

white label products – Mortgage Choice Home Loans Ignite (with Pepper Money) and Mortgage Choice Home Loans Propel (with Australian Mortgage Marketplace)

going to say, “I’m sorry this is just way too hard to program; it’s not worth our effort to program it”. But they will slowly add in all those little pieces, and they will get there absolutely.

How important are BDMs to your business success, and how does Mortgage Choice assist in this area?

Q

Jane Vaughan: We can’t live without them. They’re our support network.

It’s all about relationships – these are the people to turn to when we need assistance; they are our go-to.

I think that’s what sets us apart from going directly to a bank. If you go into a bank branch, if the wheels fall off during the application process, I can guarantee that that branch isn’t going to close its doors and pick up Joe Blow’s application and have four people in the office running around to get your loan back on track. But if you’ve got a broker, they will.

James Algar: There’s a direct correlation between the quality of a BDM and the level of business we send to that lender. Especially amongst the majors, they all source their funding from the same place; they just dress it up differently. Nine times out of 10 we’ll send it to a lender that’s going to have a good relationship where we can influence an outcome. It’s about looking after the client.

In partnership with

Susan Mitchell: At Mortgage Choice, we have franchise business managers [FBMs] that will help our franchisees.

Leanne Johnstone: With the Mortgage Choice model, we are fortunate to be able to draw on the expertise and resources of our FBMs. They are a key support who can assist our individual businesses, regardless of what stage it is at. You can reach out for as much or as little support as you need. It is awesome having this person at head office that knows a bit about your individual business and goals. It is absolutely invaluable.

David Zammit: We’ve actually just recently resourced the team further than what it was before. We’re now sitting at around about 50 franchises

for every FBM. We’ve taken the view that to get it down to one to 50, we can make sure we can tailor to every single individual franchise so they’re getting what they need.

Susan Mitchell: I think a lot of the FBMs or managers are really more about recruiting in some of the larger aggregators. The FBMs in our business are asking, how can I help you grow your business, because I understand your business, what you want and what your goals are? How can I help you achieve your goals?

George Boustani: There have been times where a deal’s fallen off the rails.

That’s where the FBM has come in.

They’ve gone beyond the bank BDM to the state manager of that bank

and got the deal back on the rails, approved and settled. In my early days, the Mortgage Choice FBMs helped me quite a bit with scripting and networking, scripting for how to talk to a real estate agent to get referrals. They take care of staffing and recruitment and shopfront issues.

Their role is quite important.

Within Mortgage Choice, Q what opportunities are there to diversify and grow a broker’s business? How does it support these opportunities?

George Boustani: As a result of BID, our car loan referral system has changed to Platform Plus, which has made submitting a car loan substantially easier. It’s a better

experience for the client and for us.

It was quite fidgety to cross-sell car loans and personal loans, but the new Platform Plus system is BIDcompliant, easy to use and quick. The infrastructure that’s been put into place

by Mortgage Choice Asset Finance has helped us quite a bit. It’s fantastic.

Susan Mitchell: So the point is they can get involved or as stand-off as they want and still get that diversified product through. Some people will actually do the whole loan themselves.

The main thing was to just make it easy – to have a high-quality product that was easy for the broker to do. The more diversified income that has gone through their businesses, the stronger and more valuable their individual businesses are. AB www.brokernews.com.au

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OPINION

TRUST ONLY THE EXPERTS ON CREDIT FILES Sydney law firm Joseph Trimarchi & Associates specialises in credit repair.

Principal Joseph Trimarchi warns brokers to be wary of companies offering credit-fix solutions that sound far too good to be true has been written about credit repair or credit restoration, and finance professionals are constantly bombarded by companies promising magic-bullet solutions to restoring their clients’ creditworthiness.

The truth is, these offerings are mostly all hype and do little to provide a proper understanding of what types of blemishes can be removed from credit files.

By definition, credit repair or credit restoration is the process of legally challenging negative or adverse information appearing on a credit file.

The credit file is an insight into creditworthiness and is governed by strict compliance with the prevailing legislation – the Privacy Act 1988 (Commonwealth).

Australian law does little to assist with non-consumer credit. This is credit that is not obtained for personal, domestic or household reasons. Adverse listings for commercial credit present a more difficult prospect when attempting to erase this information.

The fact is, not all listings can be erased from a credit file; only inaccurate or incorrect information may be removed.

Australia has three main credit reporting agencies: Equifax, Experian and illion.

Remarkably, these agencies do not share information, which means different information may appear in each credit report provided by these agencies.

My practice encounters this problem daily, and my team constantly urge clients and finance professionals to check all three credit files to establish what information is held by them that may affect their clients’ creditworthiness. Information can remain on a credit file for many years, and any negative information, such as defaults or judgments, will affect creditworthiness for years to come.

Court judgment: Five years Credit enquiry: Five years Consumer credit obligations: Two years from the end of the obligation Debt agreement: Five years from the day the agreement was made; or two years from the day the agreement was either terminated or ends Default: Five years Repayment history: Two years Serious credit infringement: Seven years

MUCH

Finance professionals owe it to their clients to educate them on creditworthiness, as prevention is always better than cure Creditworthiness is key when it comes to determining a successful finance application. It is made up of three important factors each lender is obliged to consider as part of the loan approval process: eligibility to obtain credit, credit history, and capacity to repay the credit.

A good credit history is a key factor and sometimes the only one that individuals can control. Finance professionals owe it to their clients to educate them on creditworthiness, as prevention is always better than cure. A large proportion of the negative information on a credit file can’t be removed.

How long is information held on a credit file?

Bankruptcy: Five years from the day you are declared bankrupt; or two years from the day you are no longer bankrupt 24

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the same place is sufficient.

Accumulate assets, preferably real estate. However, other assets such as shares are also considered as positive.

Minimise the impact of external factors.

If the economy is struggling, hold off on applying for credit until it turns around.

Before applying for credit, understand each lender’s specific requirements.

Brokers should not formally submit a client’s application for finance until it has been assessed on its merits.

Joseph Trimarchi Solicitor and principal, Joseph Trimarchi & Associates

Tips for maintaining a healthy credit score Keep all repayments on current loans up to date and meet all financial obligations, including paying utility and phone bills on time.

Limit your number of loan applications.

Keep liabilities to a minimum as lenders take this into consideration when looking at serviceability.

Try to present a stable pattern of employment and residential address.

The rule of thumb is that three or more years working and residing at

Keep enquiry ‘footprints’ on your credit file to a minimum. Be careful when making an enquiry for finance on the internet that may lead to an application being lodged with an institution. Numerous applications may lead to future finance applications being rejected.

The ability to identify negative information that can be removed from a credit file requires an understanding of the laws that govern this area, as well as how they can be applied to advance a client’s individual circumstances. Unfortunately, the credit repair industry is littered with organisations that have little understanding of the law. Referring a client to an organisation in this category is a disservice to them and a poor reflection on the referrer.

Finance professionals must have at least a basic understanding of all factors that may impact their client’s ability to secure finance, especially a credit file that presents their client in the best light.

If a credit file problem arises, professionals would should use a legal firm that specialises in credit file restoration, understands this area of the law, and charges fees on a no-win, no-fee basis. AB

PEOPLE

CAUGHT ON CAMERA Inspired by Women founder and experienced mortgage broker Marie Vlahos held a fundraising and networking event on International Women’s Day on 8 March to support and empower fellow women in business. It was standing room only at Cohibar in Darling Harbour, Sydney, as women, and a few men, gathered to hear and learn from some inspirational speakers. These included Finsure NSW state manager and Women in Finsure chairwoman Noushig Megerditchian, Consulting Australia founding director Adriana Cecere, and Cominos Family Lawyers founding principal Pamela Cominos.

Proceeds from the night were donated to charity Dress for Success Sydney, which provides professional clothing to disadvantaged women seeking work. Vlahos started the Inspired by Women network three years ago to help women become “financially and emotionally better”.

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25

DATA

NORTHERN TERRITORY

WA SPOTLIGHT

Darwin aims to improve the amenities and infrastructure of its suburbs The local council of Darwin has invested $5m in a Better Suburbs Projects program, which aims to upgrade streetscapes and community infrastructure in the city’s suburbs. This is part of the council’s commitment to achieving a vision of a “City of Colour”.

The project includes new exercise stations, lighting upgrades and improvements to suburban shopping villages and sporting infrastructure.

Overall, the Better Suburbs Projects program is expected to roll out 20 projects, with $750,000 allocated to each ward and another $2m for street beautification, including works at Malak, Karama and Parap shopping villages.

Lord Mayor Kon Vatskalis said the projects would help stimulate Darwin’s economy as jobs are created for local contractors. “Tenders have closed for one of the projects to demolish and deliver a new public toilet block and a fixed basketball court shade structure at Chrisp Street Oval, which will see more than $300,000 injected into the Darwin economy for that project alone,” he said.

Area

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Metro (H)

$515,000

2.1%

4.3%

$460

4.9%

Metro (U)

$320,000

4.6%

-0.2%

$375

6.5%

Country (H)

$420,000

1.1%

2.8%

$500

6.2%

Country (U)

$347,500

3.3%

0.2%

$380

6.4%

TASMANIA

HomeBuilder grant boosts first home buyer activity in Tasmania The number of Tasmanians who have taken advantage of HomeBuilder is three times higher than initial projections, according to the latest data. The most recent numbers for loans and dwelling approvals reflect the boost HomeBuilder has given the local housing market.

The number of owner-occupier loans for construction increased by 104.2% over the three months to January 2021. During the same period, the number of detached dwelling approvals rose by 60.6%.

Senator Claire Chandler said the scheme was part of the federal government’s commitment to increasing the supply of dwellings in Tasmania.

“We all want more young Tasmanians to have the opportunity to live and work in our state rather than going to the mainland, and ensuring housing supply caters to demand is essential to this achieving this,” she said. “HomeBuilder is just one way this government is supporting jobs and stimulating economic growth in Tasmania.”

Area

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

RENTALS FLY OFF REGIONAL MARKET Investors in regional centres of WA are snapping up tenants for their rentals faster than in the capital city Busselton region outperformed all regional centres in WA in the three months to February, recording the fastest time to leasing a rental, according to the Real Estate Institute of WA (REIWA).

It took 11 days for a rental property in Busselton to be occupied during the period, nine days faster than in Perth. Over the year, the leasing time in Busselton went down by 12 days.

REIWA president Damian Collins said the fast leasing time was due to the limited supply of available rental properties.

“Property investors in the Busselton regional centre are finding tenants for their rentals quicker than any other regional centre in the state,” Collins said. The rental shortage affecting WA had led to increased competition among tenants in the area, putting upward pressure on rents, he said. In fact, the median weekly rent in Busselton rose from last year’s $400 to $500.

Other regional centres also reported lower THE

HOUSING MARKET FUNDAMENTALS — PERTH

$580,000

2.9%

10.2%

$450

4.4%

Metro (U)

$428,000

2.4%

6.4%

$395

4.9%

Country (H)

$385,000

3.8%

10.9%

$340

5.0%

Country (U)

$301,000

1.8%

5.6%

$280

5.1%

New listings:

Houses

Units

www.brokernews.com.au

4,349

$485,000

1,073

42 days

Median value

Number of sales

Days on market

$427,000

335

48 days

Median value

Number of sales

Days on market

SUBURB TO WATCH: DUDLEY PARK $395,000

Median price (units) $180,000

26

Source: CoreLogic

Property stats for the week ending 14 March 2021

Median price (houses) Metro (H)

days on market than Perth. Homes in Albany and Bunbury took only 16 days to be occupied.

“Albany’s median leasing time has quickened by seven days when comparing the three months to February 2021 to the three months to February 2020, while the median leasing time in Bunbury reduced by 16 days when comparing those same time frames,” Collins said.

On a suburb level in regional WA, four areas that had the fastest median leasing times were in the southwest, while three were in Bunbury.

The 10 regional suburbs with the fastest median leasing times in the three months to February 2021 were Australind (15 days), Eaton (15), Bridgetown (16), Spencer Park (17), Bunbury (21), Newman (23), Kalgoorlie (24), Bulgarra (26), Cable Beach (26) and Wandina (29).

“Regional WA, like Perth, is suffering from a rental shortage and needs an influx of investor activity to inject more private rental stock into the market,” said Collins.

12-month growth

3-year growth

Average annual growth

Gross rental yield

12%

4%

0.1%

4%

12-month growth

Average annual growth

Weekly advertised rent

Gross rental yield

-15%

-4%

$280

8%

AUSTRALIAN CAPITAL TERRITORY

New regulations will protect Canberran tenants in share housing ACT Attorney-General Shane Rattenbury has said the informal arrangements involved in share housing have made it necessary to reform laws and update protections for tenants.

“Under these reforms, there’s more certainty about your rights and responsibilities when changing how a shared tenancy is set up. It will remove headaches like terminating and remaking a tenancy agreement when your housemates change, or having some people not on the lease, making them sub-tenants of those on the lease,” Rattenbury said.

Furthermore, the reforms will streamline the process of managing the bond for a share house.

This will enable the money to be transferred directly between tenants when arrangements change.

“The new laws establish minimum protections so that occupants are protected against unreasonable evictions,” Rattenbury said. “The reforms also create a new optional pathway for occupants to be able to take an occupancy dispute to the Human Rights Commission for conciliation to provide a structured dispute resolution process.”

Area

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Metro (H)

$780,005

2.1%

7.4%

$585

4.2%

Metro (U)

$480,000

1.2%

4.6%

$480

5.5%

SOUTH AUSTRALIA

SA has provided the second-biggest economic stimulus in response to COVID

HIGHEST-YIELD SUBURBS IN WESTERN AUSTRALIA Suburb

House

Gross rental yield

Median price

Quarterly growth

12-month growth

Average annual growth

PORT HEDLAND

U

14%

$172,000

0%

-6%

-1.9%

KAMBALDA EAST

H

14%

$60,750

8%

6%

1.8%

SOUTH CARNAVON

H

13%

$120,000

14%

0%

-1.1%

SOUTH HEDLAND

U

12%

$150,000

1%

11%

3.6%

DERBY

H

12%

$139,000

2%

-8%

-7%

KAMBALDA WEST

H

12%

$103,750

1%

-3%

-2.7%

The state government is investing 3.6% of gross state product in its COVID-19 fiscal response. This is higher than Victoria (2.8%) and WA (1.9%) and just behind NSW (4.6%), according to a report from the federal Parliamentary Budget Office.

SA Treasurer Rob Lucas said the record $4bn state stimulus leveraged an extra $1bn in Commonwealth, local government and business funds. “We welcome the federal Parliamentary Budget Office report, which has found that we are outperforming almost every other state and territory with our stimulus spend,” he said.

Lucas said the government was investing in a record $16.7bn infrastructure pipeline, including the North-South Corridor final stage, a redeveloped Memorial Drive and Hindmarsh Stadium, and upgrades to schools and hospitals.

This would create thousands of jobs.

“The government is spending record amounts on our targeted stimulus to turbo-charge the state’s economic and jobs rebound over the next two years,” Lucas said.

Area

SOUTH BOULDER

H

11%

$155,000

2%

48%

16.7%

SOUTH HEDLAND

H

10%

$245,000

17%

17%

-6.3%

NEWMAN CABLE BEACH

H U

10% 10%

$240,000 $200,000

7% 29%

7% 33%

-4.5% -4.6%

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Metro (H)

$510,000

2.0%

2.9%

$390

4.1%

Metro (U)

$367,000

1.4%

4.2%

$335

4.6%

Country (H)

$289,500

0.0%

1.8%

$270

4.9%

Country (U)

$210,400

0.0%

0.0%

$215

5.3%

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27

DATA

VICTORIA

Victoria achieves its highest auction success rate in 11 years The state’s clearance rate for February hit 84.8% of more than 3,000 auctions. This beats the record of 84% achieved in 2010, according to the Real Estate Institute of Victoria (REIV).

There were 17 suburbs that reported a 100% success rates in their auction listings, including Hawthorn East, Fitzroy North, Ferntree Gully, Rowville, Brunswick East, Sandringham, Seaford, Collingwood, Ashburton, Blackburn South, Fawkner, Wantirna, Boronia, Fairfield, Hillside, Seddon and St Kilda West. However, these suburbs had listings of 21 homes or fewer. Reservoir was the top-selling suburb, clearing 44 of its 53 auctions. Coburg was second with 37 sales, followed by Bentleigh East (35), Preston (34) and Brunswick (34).

Gil King, CEO of REIV, said support measures such as buyer grants, mortgage repayment holidays and low interest rates continued to drive activity this year. “High demand across the state has also been fuelled by an increase in activity following Victoria’s devastating lockdowns, which saw thousands of auctions cancelled.”

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Metro (H)

$800,000

1.3%

5.6%

$430

2.9%

Metro (U)

$610,000

0.5%

4.4%

$410

3.6%

Country (H)

$450,000

5.1%

10.7%

$360

4.5%

Country (U)

$340,000

1.6%

7.6%

$295

4.9%

NEW SOUTH WALES

Quarterly

12-month

Weekly

Gross

growth

growth

median

rental

rent

yield

92

Cleared

55

Uncleared

16

Clearance rate

77.5%

PERTH Total auctions

23

Cleared

10

Uncleared

4

Clearance rate

71.4%

Units

$495,250

$814,000 $550,000

$540,000

$607,523

$438,000

$500,000

$355,000

$100,000

$350,000

$200,000

$490,000

$300,000

$390,000

$400,000

$544,250

$500,000

$560,000

$600,000

$720,000

$700,000

$651,675

$800,000

$0 Sydney Melbourne Brisbane

Adelaide

Perth

Hobart

Darwin

Canberra

CAPITAL CITY HOME VALUE CHANGES Capital city

Weekly change

Monthly change

Year-to-date change

12-month change

Sydney

0.9%

3.5%

5.6%

4.5%

Melbourne

0.7%

2.5%

4.1%

-0.2%

Brisbane

0.4%

2.0%

3.9%

6.0%

Adelaide

0.4%

1.2%

2.5%

7.8%

0.3%

1.5%

4.3%

5.5%

0.7%

2.7%

4.7%

3.6%

$1,030,000

1.1%

6.7%

$540

2.9%

Metro (U)

$732,000

0.7%

3.6%

$495

3.6%

Perth

Country (H)

$540,000

2.2%

6.8%

$400

4.1%

Combined 5 capitals

Country (U)

$460,000

2.8%

6.4%

$350

4.1%

www.brokernews.com.au

Total auctions

Houses

Metro (H)

28

ADELAIDE

$900,000

Sydney’s dwelling values have surpassed their previous peak in 2017, hitting a new record high, according to the latest figures from CoreLogic.

Tim Lawless, executive research director at CoreLogic, said the city had been reporting strong capital gains in housing values in recent months.

In fact, Sydney home values had risen by 5.7% after hitting a floor in October.

“The recovery trend in Sydney following the 15.3% decline from July 2017 to May 2019 was interrupted

by COVID-19, with housing values falling by 3.0% through the worst of the pandemic,” Lawless said.

February 2021 data shows that Sydney’s median housing values rose by 2.8% from last year to $895,933. While this is good news for homeowners who want to take advantage of higher house values when refinancing, it remains a challenge for many would-be buyers.

“With household incomes expected to remain subdued and stimulus winding down, it is likely affordability will once again become a challenge,” Lawless said.

Median price

There were 2,731 homes taken to auction in the busiest week since the first week of April 2020 when 3,209 capital city homes were taken to auction. In comparison, 2,218 auctions were held across the combined capitals in the previous week. Preliminary clearance rates held firm, with 82% of auctions successful, down slightly from the previous week’s preliminary clearance rate of 83.2%, which revised down to 80% at final figures.

In Melbourne, 1,319 auctions were held, of which 78.9% were successful. During the previous week, 1,102 homes went to auction, with a final clearance of 77.6%. This time last year last year, 1,343 auctions were held, and 58.4% were successful. Sydney hosted 1,048 auctions, up from 806 the previous week and 946 last year. The preliminary clearance rate came in at 87.5%, compared to 87.4% the week before. Sydney’s final clearance rate has held at above 80% for the past six weeks.

In the smaller capitals, Canberra recorded the highest preliminary clearance rate of 85.1%, followed by Adelaide at 77.5%.

MEDIAN HOUSE AND UNIT PRICES

Dwelling values in Sydney rise to their highest level in four years

Area

WEEK ENDING 21 MARCH 2021

$885,000

Area

CAPITAL CITY AUCTION CLEARANCE RATES

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

BRISBANE CANBERRA Total auctions

96

Cleared

74

Uncleared

13

Clearance rate

Total auctions

151

Cleared

89

Uncleared

33

Clearance rate

73%

85.1%

SYDNEY Total auctions

1,048

Cleared

780

Uncleared

111

Clearance rate

TASMANIA

MELBOURNE Total auctions

87.5%

1,319

Total auctions

2

Cleared

915

Cleared

2

Uncleared

244

Uncleared

0

Clearance rate

Clearance rate

78.9%

n.a.

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

Area

QUEENSLAND

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Brisbane clocks robust auction clearance rates as demand intensifies Brisbane is becoming one of the top spots for buyers whose lifestyle has changed as a result of COVID-19, and auction clearance rates have hit almost 100%, according to a property expert.

Peter Burgin, chief auctioneer at Palace Real Estate, said weekly auction rates in the city had reached 98%, driven by buyers wanting to relocate to Queensland.

“We’re now seeing unprecedented results as demand surges. Brisbane’s market was performing well prior to COVID-19, but the pandemic has seen many reassess their lifestyles, which has led to such strong growth,” he said in a report on The Real Estate Conversation.

Burgin said heightened activity was coming from would-be buyers targeting innercity suburbs. There was also increased demand for houses in the premium segment of the market, with values ranging from $1m to $2m.

Metro (H)

$575,000

0.9%

3.1%

$410

3.8%

Metro (U)

$412,500

1.3%

1.3%

$380

5.0%

Country (H)

$470,000

0.2%

0.2%

$400

4.6%

Country (U)

$400,000

2.1%

4.0%

$350

4.7%

Source: Except where otherwise stated, all data sourced from CoreLogic, March 2021

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

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