DECEMBER 2020 ISSUE 17.23
REAPING THE REWARDS OF SMSF LENDING Current market factors are increasing demand for SMSF lending. Per Amundsen from Thinktank and Cory Bannister from La Trobe Financial explain the exciting opportunities it offers for brokers /14 ALSO IN THIS ISSUE‌ In the news Loan Market Group buys aggregators PLAN Australia, Choice and FAST /12 A big deal How Andrew Algie rescued a duplex loan deal /20 Non-bank plans digital transformation Resimac is partnering with leading technology and service providers to transition to a cloud-based system /17
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Brokerages have their say on BID With the best interests duty arriving in 2021, we sought the views of four brokerages on its likely impact /18
Sharing their secrets to success AMA-winning brokers Belinda Gibson and Greg Pierlot reflectontheir achievements /22
In the hot seat Best Aggregator BDM award winner Peter Bryant on his 38-year career /30
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NEWS
IN THIS SECTION
Lenders Big four banks show resilience, but there’s trouble ahead /04
Industry bodies New home construction loans hit record numbers /06
Market Investor interest in property will revive, says analyst /10
Aggregators Loan Market buys three NAB-owned aggregators /12
Technology Brisbane fi ntech to launch online brokerage /08
www.brokernews.com.au DECEMBER 2O20 EDITORIAL
SALES & MARKETING
Editor Antony Field
Publisher/Sales Manager Simon Kerslake
News Editor Madison Utley
GLOBAL WATCH How is the mortgage and broking world responding to the COVID-19 pandemic overseas? Here’s your snapshot of the news that matters most in North America
POSITIVE U.S. JOB NUMBERS MASK HOUSING HEADWINDS employment reports in the US were full of rosy news. US employers added 638,000 jobs in October, cutting the unemployment rate by a percentage point to 6.9% and exceeding analyst expectations. Much of that growth came from industries hard-hit by the pandemic, such as leisure and hospitality, food services and retail. But it’s not all sunshine – 11 million Americans remain unemployed, twice as many as in February. Job growth is slowing, too. “Despite that first-half shock we are still expecting positive growth in purchases into 2021, which is great news,” said Joel Kan, Mortgage Bankers Association associate vice president of economic and industry forecasting. However, he noted the uneven nature of the recovery and tight housing supply as potential headwinds for the mortgage industry. OCTOBER
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CANADIAN HOUSEHOLD DEBT OVERTAKES GDP GROWTH figures from the Bank of Canada indicate that the increase in Canadian household debt continues to outstrip GDP growth as the second wave of COVID-19 lurches on. According to an analysis of the bank’s figures by real estate information portal Better Dwelling, the debt-to-GDP ratio reached 115% in the second quarter, up from 101% in Q1 and the 97% level recorded during Q2 2019. From the first to the second quarters of 2020, household debt grew 13.83% faster than GDP. To compare, the pace of debt growth from Q1 2010 to Q1 2020 was 16.09% faster than GDP. Better Dwelling warned that this trend could sabotage the Canadian economy’s prospects in the medium term – a situation that might be compounded by the recent spike in consumer insolvencies. NEW
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EL DORADO TOPS SECOND-HOME HOUSING MARKET IN U.S. working from home becomes the ‘new normal’ during the pandemic, more AS US homebuyers are flocking to popular resort destinations – and staying. A new study from proptech firm Redfin found that the housing markets of popular second-home destinations are heating up, becoming full-time residences for those who have the luxury of working remotely. The study revealed that El Dorado County in California, which straddles southern Lake Tahoe, came in first place as the US county with the hottest housing market. In the number-two spot is Deschutes County in Oregon, four hours southeast of Portland. It has access to the Cascade mountains and national forest, and contains the vacation towns of Sunriver and Bend. In third place is Ocean County in New Jersey, on the Jersey Shore.
This magazine is printed on paper produced from 1OO% sustainable forestry, grown and managed specifically for the paper pulp industry Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Australian Broker magazine can accept no responsibility for loss. Australian Broker is the most-often read industry publication, according to independent research carried out by the Ehrenberg-Bass Institute for Marketing Science at the University of South Australia in December 2008. The research also found that brokers rate Australian Broker as the best for both news content and feature articles, followed by sister publication MPA. Overall, on all categories, Australian Broker ranks top followed by MPA. The results were based on a sample of 405 respondents who were the subject of telephone interviews.
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23/11/2020 12:19:25 PM
NEWS
LENDERS
brands remain the most trusted banks in Australia, the latest banking brand and trust index survey of 1,217 Australians by research platform Glow reveals. Bendigo Bank, Greater Bank, P&N Bank and Bank of Sydney solidified their positions at the top, achieving the highest net trust scores in October’s index. Each of their trust ratings improved, with Greater Bank posting the biggest jump to 28 from last quarter’s 18.
Source: Glow 25
24 23 23 20
20
18
17 16 16 16 16
15 15 15 15 14 13 13 12 12 12 12
20 11
10 5
0
0
Net promoter score -4
-20
-20 AMP
Bank of China
Westpac
Rabobank
HSBC Bank
Adelaide Bank
Citibank Australia
Macquarie Bank
ANZ
86 400
NAB
UBank
Commonwealth Bank
Bankwest
Bank of Melbourne
Xinja
BankSA
ME Bank
Suncorp Bank
St. George Bank
Bank of Queensland
CUA
Beyond Bank
Up Bank
ING
RACQ Bank
Heritage Bank
P&N Bank
-23 Bank of Sydney
AUSSIES TRUST SMALLER BANKS MORE — SURVEY
29 28 28 27
Greater Bank
March, Pepper Money committed to continue paying trail to brokers with customers impacted by COVID-19 until the end of 2020. Now, the group has extended its timeline for a further year, until at least 31 December 2021, to provide brokers with certainty in turbulent times. “By extending the timeframe, we are providing brokers with the support and certainty they need beyond 2020 and well into 2021,” said Aaron Milburn, Pepper Money GM mortgages and commercial lending. IN
AUSTRALIA BANKING BRAND AND TRUST INDEX SURVEY — OCTOBER 2020
Bendigo Bank
PEPPER EXTENDS BROKER TRAIL PAYMENTS
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“Despite the substantial challenges, the majors have proven resilient [and] played a critical role as shock absorbers for the economic downturn” Ian Pollari Partner and head of banking, KPMG Australia
MAJOR BANKS RESILIENT BUT RISKS REMAIN — KPMG REPORT The big four are hanging tough in the COVID economy, according to a new report, but they need to watch loan losses and pursue digitisation Australia’s major banks have so far demonstrated resilience throughout the COVID-19 pandemic, several key areas of risk for the coming year have become clear, according to KPMG’s Major Australian Banks Full Year Analysis Report 2020. In FY2020, the big four reported a combined cash profit after tax from continuing operations of $17.4bn, down 36.6% on FY2019. However, even after significantly increasing their loan loss WHILE
provisions and allowing customers to defer loan repayments, the banks’ actual loss experience has been minimal thus far and will instead be seen in 2021, as the government unwinds economic support measures. Interest margins also continued their downward trajectory this year, costs remained high and significant extraordinary items such as customer remediation and regulatory charges dragged on the banks’ results. “Despite the substantial challenges, the majors have proven resilient in the last year and through the strength of their balance sheets played a critical role as shock absorbers for the
economic downturn,” said Ian Pollari, partner and head of banking at KPMG Australia. “They have a big job ahead of them to play their role in Australia’s recovery and improve their financial performance, while progressing with a number of large and complex remediation, regulatory change and technology programs.” The report emphasised the importance of investing in digitisation, as the banks face competition from “focused challengers” in payments, mortgages, consumer credit and business lending, many of whom offer efficient digital channels and products. It also highlighted important indicators to watch in FY2021, such as loan loss performance as government support unwinds, credit growth – especially in mortgages and business lending – and the rate of interest margin decline and cost-income ratios.
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23/11/2020 12:20:03 PM
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23/11/2020 12:21:48 PM
NEWS
INDUSTRY BODIES FBAA CONGRATULATES RETIRING AUSSIE FOUNDER FBAA has paid tribute to Aussie Home Loans chairman and founder John Symond, who retired from the company in November after 30 years in the mortgage broking industry. FBAA managing director Peter White said Symond had made a “huge contribution” to the industry and he wished him the very best in retirement. “He was a pioneer and started the evolution that has shaped our industry and resulted in most Australians currently using brokers to purchase their homes,” said White. THE
COVID-19 HURTING NSW VACANCY RATES Real Estate Institute of NSW (REINSW) Vacancy Rate Survey for October shows that the COVID-19 pandemic is continuing to affect the residential rental market across the state. Vacancies in Sydney increased again, rising to 4.3% – up 0.2% from September but still below the historic high of 5% in July. REINSW CEO Tim McKibbin said vacancies in the inner Sydney areas were back to an all-time high of 5.8% in October, indicating that the fallout from the pandemic was far from over. THE
RECORD NUMBER OF CONSTRUCTION LOANS FOR NEW HOMES ABS statistics for September reveal that the HomeBuilder grant is having a positive effect on the number of new homes being built, and this is expected to last into December number of loans for the construction of new dwellings surged by 27.1% over the month of September across Australia – the highest result since the ABS started collecting the data in 2002. ABS building approvals data revealed that the month was the third strongest in terms of approvals for detached houses in the past 16 years. “The ABS data confirms the surge in building work entering the pipeline is consistent with the results from HIA’s New Home Sales over recent months,” said Housing Industry Association chief economist Tim Reardon. THE
Commercial Loans
“We do not expect this to be the peak of the cycle.” Based on the strength of new home sales in September, the HIA expects finance and building approvals to continue to be strong into December, but at that point it seems inevitable that the positive impact of HomeBuilder will start to slow, Reardon said. “HomeBuilder was designed to provide consumers with confidence to return to the detached housing market. It has been very effective at achieving this goal.” The new work entering the pipeline should help offset the “significant declines” seen from
March, helping to ensure a stable supply of new building projects over the next nine months. However, because they are tempered by the June quarter results, the record volume of loans and approvals in September will not lead to a record number of new home commencements. “Approvals for detached houses are identical in the year to September 2020 compared with the previous 12 months. This is a very good outcome considering the speed and extent of the downturn in new detached housing observed in the first half of the year,” Reardon said. The biggest increase in the number of loans to owneroccupiers in September for the construction of new dwellings was seen in WA (+40.6%), followed by Queensland (+34.9%), Victoria (+31.6%) SA (+26.2%), NSW (+25.5%), Tasmania (+18.0%), the NT (+15.2%) and the ACT (+6.2%).
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23/11/2020 12:22:25 PM
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Disclaimer: All applications are subject to the credit provider’s credit criteria. Terms, conditions, fees and charges apply. ©Pepper Group Pty Limited ABN 55 094 317 665; AFSL 286655; Australian Credit Licence 286655 (“Pepper”). All rights reserved. Pepper is the servicer of home loans provided by Pepper Finance Corporation Limited ABN 51 094 317 647. Pepper Asset Finance Pty Limited ACN 165 183 317 Australian Credit Licence 458899 is the credit provider for asset finance loans. Pepper Money Personal Loans is a brand of Pepper Group Pty Limited. Credit is provided by Now Finance Group Pty Ltd, Australian Credit Licence Number 425142 as agent for NF Finco 2 Pty Limited ACN 164 213 030.
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22/10/2020 3:59:17 PM 23/11/2020 12:22:48 PM
NEWS
TECHNOLOGY NEW BROKER PODCAST OFFERS ‘SOLID’ ADVICE well-known figures in the broking industry have banded together to create a podcast that shares insights gained over their nearly 30 years of experience via “open, candid fireside chats”. Broker Profits Vault coaches James Veigli and Ash Playsted designed the Mortgage Broker Acceleration podcast to cut through the clamour of competing industry voices, many of which spout quick-fix tricks and vague promises of success, and present brokers with a “solid business strategy”, Veigli said. TWO
86 400 OFFERS NEW HOME LOAN PRODUCT 86 400 has built a new NEOBANK mortgage product that boasts the lowest ongoing variable rate from a bank distributed via the broker channel. 86 400’s ‘Neat’ home loan was developed to complement its original ‘Own’ home loan and provide customers with more choice, partially based on broker feedback, said Melissa Christy, lending product lead at 86 400. Neat’s variable rates start from 2.19% (2.20% comparison rate) and it became available to brokers on 16 November.
“When I started Jacaranda Finance, we had a simple mission of creating seamless financial inclusion. We wanted to offer lending services to the ‘unbankable’” Daniel Wessels CEO, Jacaranda Finance
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FINTECH LENDER TO LAUNCH ONLINE BROKERAGE IN 2021 Brisbane firm Jacaranda Finance plans to provide digital-first broking services to Australians in the new year, following its expansion into prime lending team at a non-bank lender has announced plans to establish the “first 100% online finance brokerage” in Australia, to go live in 2021. While the minds behind Brisbane-based fintech Jacaranda Finance are working as a unit to launch the “full-service neo-broking suite”, the entity scheduled to launch in the next year will be run independently from the lender. The new platform will be designed to provide digital-first broking services to Australians, offering a wider array of tailored options to consumers, with the goal of delivering THE
market-leading response times. It will come with a full suite of digital broker tools, including biometric digital identification, minimal-touch digital loan applications and digital bank statements. The Jacaranda Finance team has attributed the decision to create the neo-broker to the group’s willingness to work with other digital-only lenders, as well as its desire to expand its services to consumers. Since starting up six years ago, the fintech lender has offered personal loans through a proprietary online-only application. With the launch of the new service next year, Jacaranda Finance aims to work with new digital loan providers that are
aligned with its 100% online ethos across not only personal loans but also car, business and home loans. The team has promised more details to come later in 2020. While some partnerships have already been confirmed for the 2021 launch, the group remains open and eager to join forces with additional digital loan providers interested in becoming part of the venture to build Australia’s first neo-broker. Jacaranda also announced in September its expansion into prime lending. The firm’s CEO and founder, Daniel Wessels, said the transition from offering small personal loans to entering the prime personal loan market was a “natural evolution”. “When I started Jacaranda Finance, we had a simple mission of creating seamless financial inclusion,” Wessels said. “We wanted to offer lending services to the ‘unbankable’, the consumers that traditional finance had turned their back on.”
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23/11/2020 12:23:23 PM
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23/11/2020 12:23:50 PM
NEWS
MARKET FIRST HOME BUYERS COME OUT IN FORCE home buyers bolstered by state and federal incentives are continuing to flood housing markets across Australia, said Archistar chief economist Andrew Wilson. “The ABS reports that 13,040 first home buyer loans, seasonally adjusted, were approved nationally over September … an increase of 6% over the month and 45.5% higher than approved over the same month last year.” In the past 12 months, 120,625 first home buyer loans have been approved – the highest annual result since the government launched GFC stimulus packages. FIRST
A THIRD OF AUSSIE SMES CONSIDER CLOSING poll of Australian small and medium-sized businesses in September and October has shown how SMEs are feeling about the future in light of the COVID-19 recession. ScotPac’s SME Growth Index reveals that nearly one in three SMEs are considering closing or selling their business within the next six months if conditions don’t improve, with the figure skewing even higher among smaller SMEs. ScotPac CEO Jon Sutton called the results a “warning” for what may come should another lockdown occur or significant border closures remain. A
PROPERTY PRICES TO SURGE AGAIN, SAYS ANALYST Low interest rates, a volatile share market and tiny returns on bank deposits will push investors towards the property market, according to some experts confluence of factors will push investors back into the property market in the year ahead and therefore drive up property prices, according to analyst Michael Matusik. When considered alongside the incredibly low mortgage rates on offer, the volatility of the sharemarket and the paltry return on money in the bank, he said investing in the property market was “more appealing than ever”. “It is an exciting time if you are a property investor because accessing money is cheaper [than ever before] and there is some assurance from the Reserve Bank of Australia A
that is not going to change in the near future,” Matusik said. He has boldly predicted a 5% rise in property values over the next 12 months, despite other market commentators putting out very different figures. “When the cash rate drops and it becomes cheaper to borrow money, it actually pushes house prices upwards,” Matusik said. John Fitzgerald, CEO of property investment company Custodian, agrees and said the fall in interest rates would kick-start the property investment cycle again. “Many investors have sat on their hands during the COVID-19
pandemic, [but] I think this will be the incentive to bring them back in,” he said. “People who put their money in the bank are getting nothing for it … there is going to be a flight to fixed assets and that will drive up prices. I’m predicting as a result the Australian median house price will hit $1m in the next three to five years.” Meanwhile, CoreLogic head of research Eliza Owen said ABS housing finance figures for the September quarter showed a strong rebound in the volume of finance lent to purchase property. It rose 5.9% in the month of September, taking the quarterly increase to 20%, the highest quarterly growth rate on record. That followed a 10.9% contraction in housing finance through the June quarter, when strict social distancing restrictions resulted in a sharp drop in transactions.
“When the cash rate drops and it becomes cheaper to borrow money, it actually pushes house prices upwards” Michael Matusik Director, Matusik Property Insights
ROLLING QUARTERLY GROWTH IN HOUSING FINANCE Source: ABS
25% 20% 15% 10% 5% 0% -5% -10% -15% -20% Sep 02 Sep 03 Sep 04 Sep 05 Sep 06
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23/11/2020 12:24:19 PM
TECHNOLOGY UPDATE
ADELAIDE BANK SLICES SEVEN DAYS OFF PROCESSING TIME
Darren Kasehagen, General Manager, Adelaide Bank
to a dramatic seven- to eight-day reduction in average loan processing time over the last 12 months, Darren Kasehagen, General Manager Adelaide Bank, credits the achievement at least in part to the bank’s tech stack upgrade. “In a nutshell, that’s probably been the biggest quantifiable improvement we’ve seen,” he declares. Eighteen months ago, Adelaide Bank signed up for a number of additional ApplyOnline efficiencies off the back of insights from the NextGen.Net Industry Benchmark Reports. The objective was to increase broker volume market share, and providing a better broker experience was the key. “We lacked an ability to process loans at scale, and this demanded an improvement,” says Kasehagen. “Although we were capable of processing modest volumes, we knew we had to get better. “We used NextGen.Net’s insights to compare ourselves to service-level averages in the industry, and then made the decision to invest more heavily in what we deemed market-standard tools that our POINTING
competitors had access to that we didn’t. “We added this information to feedback from our frontline BDMs and processing teams and then made decisions on the latest NextGen.Net offerings. “That helped us formulate an appropriate strategic plan in terms of what we prioritised when seeking to upgrade our tech stack with NextGen.Net.” Adelaide Bank was one of the inaugural NextGen.Net lender partners to utilise the benchmark reports and apply the findings. “To get a complimentary service like that from NextGen.Net was great,” says Kasehagen. “We welcomed the approach because it’s not every day you get approached by a large market player and leader in the industry such as NextGen.Net offering up this sort of ‘intel’. We recognised its worth.” NextGen.Net Customer Account Executive Mike Ponsonby says the company’s customer engagement team offers Industry Benchmark Reporting to lender partners to help them prioritise and facilitate change and assess whether additional or more advanced digital solutions are required. Proactively seeking input
Mike Ponsonby, Customer Account Executive, NextGen.Net
from their lender customers regarding information they would find useful, NextGen.Net is able to offer comprehensive comparative measurements against the market, thereby assisting lenders in gaining valuable insight into their loan approval process, and providing opportunities for efficiency and customer service improvements. The NextGen.Net team introduced Industry Benchmark Reporting as a service to Adelaide Bank during regular monthly catch-ups. Kasehagen says he recognised the value immediately. “Over the past three years we’ve significantly increased our overall volumes, our market share and our contribution to group profit. A part of that turnaround has been due to the market insights provided by NextGen.Net,” he says. Kasehagen notes that the data and insights within the report helped to highlight and compare the bank’s loan processing turnaround times and track progress against its market share target goals. “Not only could we see how we were tracking independently from an absolute loan processing time frame perspective, but we
were able to see how those times compared to the market. So, rather than relying on anecdotal feedback, either from our BDMs or brokers, we had statistical evidence to make decisions and seek improvements. “We’ve been able to utilise the NextGen.Net information to help track our internal performance versus that of the industry. That’s incredibly important for us to be able to point to an independent viewpoint and set of data to help validate our progress.” Stressing that NextGen.Net Industry Benchmark Reporting is a value-add purely for customers, Ponsonby talks of the extensive industry expertise and intelligence the service brings to lender partners. “It’s not about sales,” he says. “But if a benchmark report reveals a shortfall, as was the case with Adelaide Bank, we look at some of the capabilities in ApplyOnline that could potentially be activated, or an automated function that could be added to save time and enhance the experience. “Enhancements that address specific operational shortfalls are very powerful and help our lenders transform to drive success.”
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23/11/2020 12:24:40 PM
NEWS
A G G R E G AT O R S
ONLINE COMMUNITY LINKS UP BROKERS, LENDERS Connective has launched an online community to facilitate a more direct line of communication between lenders and brokers, allowing them to converse in real time, such as in the community’s popular loan scenarios group. Brokers can get guidance on real scenarios they’re dealing with, direct from over 60 lender BDMs. Connective executive director Mark Haron said the community had grown rapidly, with 2,400 members actively participating every month. AGGREGATOR
FINTECH PARTNERS WITH FIRST AGGREGATOR start-up Finspo has expanded into the mortgage space and will be launching its new mortgage broking offering via aggregator Australian Finance Group. Finspo announced the partnership while preparing to launch its app to help Australians save on banking and home loans. “We’re partnering with AFG so we can give our customers access to a wide range of lenders and to a team of experts who can help them through the process,” Finspo CEO Angus Gilfillan said. FINTECH
“We are thrilled to be welcoming PLAN Australia, Choice and FAST brokers and their teams into our group and look forward to working with them” Sam White Executive chairman, Loan Market Group
12
LOAN MARKET GROUP PURCHASES THREE NAB-OWNED AGGREGATORS Consolidation in the aggregators market continues with Loan Market buying PLAN Australia, Choice and FAST, which have a combined network of 4,100 brokers has announced the purchase of NAB-owned aggregation groups PLAN Australia, Choice and FAST. However, the four businesses will continue to run independently, with their own aggregation agreements, leadership and corporate sales and marketing teams. Loan Market executive chairman Sam White said the purchase was a “significant milestone” in the group’s history. “We passionately believe in the mortgage broker sector, the competition brokers generate in the Australian finance sector and the value they provide customers. It’s no surprise that brokers settled six out of 10 home loans in Australia this year,” White said. LOAN MARKET
“We are thrilled to be welcoming PLAN Australia, Choice and FAST brokers and their teams into our group and look forward to working with them and supporting the next evolution of those businesses.” White said the acquisition meant the Loan Market Group would be able to offer more options to its members. “It will empower our business owners to decide which value proposition and support structure they need to thrive. He said it would also mean further investment in technology, innovation and compliance-driven tech to benefit more brokers and their clients. PLAN Australia CEO Anja Pannek said she was thrilled with the deal. “This will enable
PLAN Australia to continue to deliver our leading premium aggregation offering and, in doing so, partner and support our members in this dynamic industry, with the additional insights of the Loan Market Group.” Choice Aggregation Services CEO Stephen More said the White Family Group was a real “Australian success story” – a family-owned business with a fantastic culture that would “resonate well with Choice members”. FAST CEO Brendan Wright said the new ownership would provide its brokers with a “clearly differentiated” value proposition for finance broking businesses, backed up by the “expertise and experience” of the Loan Market Group. Loan Market will buy the three aggregation businesses, the corporate credit licence holder and compliance services provider BLSSA, associated broker aggregation technology and related sales and operations services. Completion is expected to occur in early 2021.
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23/11/2020 12:25:15 PM
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23/11/2020 PMPM 16/10/201712:25:41 2:07:04
FE AT URES
SPECIAL REPORT
THE REWARDS OF SMSF LENDING Self-managed super funds are attracting more people who want to take control of their financial futures. Lenders La Trobe Financial and Thinktank say this demand means opportunities for brokers, particularly in SMSF property assets
SMSFS: THE NUMBERS
593,375 SMSFs in Australia, up 11% in last 5 years
> 1.1 million SMSF members
Total estimated assets of $733bn
Total asset types held by SMSFs by value: listed shares 26%; cash and term deposits 21%; LRBAs 6.8% (up nearly 4% from 2015); non-residential real property 10%; residential real property 5.3% Source: ATO Self-managed super fund quarterly statistical report – June 2020
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may have battered the economy, but SMSFs have weathered the storm very well, according to lenders La Trobe Financial and Thinktank. A combination of factors is driving demand for SMSFs, including a resilient property market, poor returns on cash deposits, the tax advantages of SMSFs, and the fact that if an SMSF loan default occurs all other fund assets are protected. Cory Bannister, chief lending officer at La Trobe Financial, says many people are taking stock of their lives during the pandemic and re-evaluating their finances, particularly their super balances. “Many Australians will be looking at their super returns and may question if they couldn’t do a better job. We believe this could lead to an increase in people setting up their own SMSF,” he says. According to the ATO’s June 2020 figures, the number of SMSFs in Australia has increased 11% over the last five years. Bannister says La Trobe Financial anticipates strong demand for light industrial property as e-commerce and data storage industries continue to grow, and for well-located suburban commercial properties to support workspace decentralisation. “For residential assets … we see potential for a growing demand for urban fringe property as buyers seek affordable family homes where they can work and live. These urban fringe areas have historically been very popular amongst SMSF investors.” Per Amundsen, head of research at Thinktank, expects a continuation of the strong and increasing demand for SMSFs in the medium term. COVID-19
“With our leading experience in SMSF lending, Thinktank is well placed to help brokers take advantage of this expected demand,” he says. The growth is largely driven by the lack of adequate yield-generating investments. “With interest rates at record lows and dividends and distributions from listed securities falling, SMSF trustees are looking to alternatives in order to generate income. “One such asset class is direct
recourse to the asset acquired by the SMSF and none of the other assets of the SMSF, so if things go wrong the superannuation savings apart from the ‘single acquirable asset’ are protected,” Amundsen says. Bannister says LRBAs are a positive mechanism that enables consumers to accumulate wealth for their retirement. “We expect the number of SMSF participants will continue to grow and pay dividends. Brokers should consider offering SMSF loan products as part of their overall diversification strategies, as they offer such significant growth potential.” LRBAs provide a number of benefits, Bannister says. “There may be some tax advantages, as interest and borrowing expenses are generally tax deductible, which can reduce the tax payable within the fund.” They also allow SME owners to acquire or transfer their business premises into their SMSFs to take advantage of potential concessional tax benefits. However, both Bannister and Amundsen recommend that licensed professional finance advice is sought prior to committing to an LRBA.
“SMSF LRBAs are an excellent option for brokers to consider as they are one of the in-demand market segments in search of funding” Per Amundsen, head of research, Thinktank real property, and SMSFs provide a unique opportunity to make that sort of investment in the superannuation environment.” Both La Trobe Financial and Thinktank are encouraging brokers to diversify into SMSFs via limited recourse borrowing arrangements (LRBAs), which allow borrowers to invest directly in residential or commercial property using funds accumulated in their super. Amundsen says LRBAs are the only way SMSFs can borrow, and it must be for the purpose of acquiring a “single acquirable asset”, which is held in a separate trust (a bare trust). “The key part, however, is in the name, being that the security relating to the loan only has limited
Amundsen says diversification is a great way for brokers to spread their risk profile and open up new growth opportunities. “That’s why SMSF LRBAs are an excellent option for brokers to consider as they are one of the in-demand market segments in search of funding,” he says. “At Thinktank we are highly experienced in helping brokers become accredited to write SMSF LRBAs.” Amundsen says Thinktank’s workshops provide an easy-to-follow, hands-on approach to ensure each broker is well prepared for the high level of compliance and discipline needed for SMSFs. “Due to COVID these have more recently been run online, but we
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Per Amundsen, head of research, Thinktank
hope to be opening up the doors shortly to resume in person at our offices in North Sydney, Melbourne and Brisbane.” La Trobe Financial also recommends brokers undertake training that covers the basics of SMSF lending, although it is not as complex as some think. “Any broker who has done a trust loan will find that an SMSF loan is very similar – an LRBA simply involves a trust within a trust,” Bannister says. “A broker’s aggregator may also offer training and education, and it’s a good idea to partner with a lender like La Trobe Financial that offers direct access to credit staff willing to educate and assist brokers throughout the process.” He says accountants and financial advisers are the best source of SMSF referrals for brokers, who can take comfort in knowing that the clients have been qualified and deemed appropriate to undertake borrowings under an SMSF structure. Both lenders offer residential and commercial property LRBAs. Thinktank’s move into residential SMSF lending is a natural extension for the business, designed to broaden its product offering from strictly commercial and meet the residential borrowing needs of SMEs and brokers, Amundsen says.
Cory Bannister, chief lending officer, La Trobe Financial
“It has been an easy transition, building on our existing strengths in commercial SMSF lending.” Amundsen says residential property has great appeal – it is less complex and better understood by most people. “It is interesting to note, however, that according to ATO statistics more money is invested in commercial property via SMSFs than residential property by a ratio of about two to one. “Whether it’s residential or commercial, LRBAs present a unique
guarantee (SG) contributions to invest in something they understand better than the share market or managed investments. “Purchasing a residential security in your SMSF is all about using the combination of rental income and SG contributions to result in owning the asset outright by the time you retire,” he says. “When it is sold during the retirement phase, the sale is capital gains tax free. “Commercial property will remain an attractive proposition for SMSFs, particularly for self-employed people
“Commercial property will remain an attractive proposition for SMSFs, particularly for self-employed people looking to acquire a site from which to operate their business” Cory Bannister, chief lending officer, La Trobe Financial opportunity for people to invest their superannuation savings in direct property as a tax-effective vehicle to build a nest egg for retirement.” At La Trobe Financial, Bannister says many people are keen to use their super
looking to acquire a site from which to operate their business.” There is also a planned change in legislation governing SMSF trusts, which, if accepted by the Federal Parliament, would increase the maximum number of SMSF
members allowed to six. The current limit is four. Amundsen says there are several detailed legal issues, such as whether trustees will now have to be corporate rather than have the option to be individual trustees. “Families beyond four members are often mentioned as potentially benefiting, and personally we can see business partnerships at the SME level perhaps finding this structure attractive,” he says. “As contributions can now increase by up to 50%, we may see more partnerships forming new SMSFs as there is no limit to the number of funds one individual can be a member of.” Bannister says the trust change will create an opportunity for intergenerational SMSFs and bigger loans. “It will mean lenders will need to look carefully at servicing and how to ensure that a loan is going to be serviced with some members drawing a pension from the fund and some paying down a loan.” For commercial SMSF loans, he says it could open up opportunities for multiple business partners, allowing them to increase SG contributions from most commonly $50,000 to potentially $150,000. For residential loans, it will increase the number of guarantors required. AB www.brokernews.com.au
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TECHNOLOGY UPDATE
RESIMAC MOVES TO CLOUD-BASED SYSTEM WITH NEW TECH PARTNERS
Venkatramana Gosavi, senior vice president and global head of sales, Infosys Finacle
non-bank mortgage lender Resimac has announced its partnership with industry technology and service providers to transition to a cloud-based system. The digital transformation project, which is expected to be complete in FY22, will provide a richer experience for the lender’s more than 50,000 customers, as well as brokers and other participants, through partnerships with key technology providers, including Infosys Finacle, Loanworks, NextGen.Net and Equifax. Resimac CEO Scott McWilliam says technology is a key enabler of business growth, while driving a lower-cost operating model. “This is an inflection point for Resimac,” McWilliam says. “As a pioneer of the non-bank sector, our ‘customer first’ digital strategy is critical to the next growth phase of our business.” “We are engineering for the future. Our strategic partnerships will enable us to deliver a market-leading customer experience and innovative financial solutions in a way that is scalable and sustainable.” The digital transformation will provide Resimac with the LEADING
flexibility and capabilities of a neobank combined with a home loan portfolio of almost $13bn and a proven track record of a non-bank lender that has been in market since 1985. McWilliam says Resimac’s partnership with Infosys, a global leader in financial digital services, means the company’s core system will be migrated across to the cloud-based Finacle banking solution. “This will provide a flexible, scalable and secure platform,
Scott McWilliam, CEO, Resimac
non-bank sector, Resimac is “clearly pioneering a path and we are proud to be their partner of choice”. “The Finacle Digital Banking SaaS [software-as-a-service] model will allow Resimac to achieve the necessary agility as well as provide enhanced functionality and security to its customers,” Gosavi says. “We look forward to supporting Resimac with a proven, fast and risk-mitigated digital transformation,
“As a pioneer of the non-bank sector, our ‘customer first’ digital strategy is critical to the next growth phase of our business” Scott McWilliam, CEO, Resimac while digitising the home loan customer experience and supporting Resimac’s growth into asset finance lending following the recent acquisition of IA Group.” Infosys Finacle senior vice president and global head of sales Venkatramana Gosavi says that, as one of the early movers to the cloud in the
and helping it set new benchmarks for customer experience and growth.” The Finacle suite features a flexible and integrated digital platform, enabling Resimac to empower its 12,000-plus broker partners to digitally service loans and manage the entire loan-servicing life cycle, including payments.
“Resimac can track the loan account right from the disbursements to recovery of the loans and delinquencies,” says Gosavi. The platform also delivers self-service capabilities across multiple digital channels, giving consumers the flexibility to personalise products, such as by choosing lending terms. Other technology providers Resimac has partnered with include Loanworks, which will replace the lender’s existing origination platform, providing integration with credit decisioning technology Equifax DecisionPoint 3 and the digital application submission platform NextGen.Net. McWilliam says this technology provides automated credit decisions, significantly improving loan application response times, and better scale benefits and cost efficiencies. The new digital platforms will complement Resimac’s recent digital initiatives, including a new workflow platform, digital loan documents, a digital telephony and integrated customer contact system, and partnerships with artificial intelligence providers.
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FE AT URES
NE WS ANALYSIS
BEST INTERESTS AT HEART
Brokers will have to act in the best interests of consumers when the best interests duty is introduced on 1 January, 2021. We asked four brokerages, all AMA finalists or excellence award winners, to share their views on BID
arrival of the best interests duty in January will come as no surprise to brokers, given the intense spotlight on it following the royal commission into banking and financial services. Australian Broker sought comment from four brokerages. We asked them how BID would affect brokers’ workloads and processes; what the government is trying to achieve and if it will be effective; and their views on the conflict priority rule. THE
Co-founder of Peasy Amanda Christmann “I think BID is a great initiative,” says Amanda Christmann, “but where the government may be getting it wrong is by imposing more administrative work on brokers, which in turn can mean a more arduous process for clients, whereas going straight to the bank could be quicker and easier.” BID won’t have a significant impact on Peasy’s processes, Christmann says. “I think the question lies in what is actually in the best interest of the consumer and who gets to make a call on that. As a broker, our role is to advise, based on each client’s requirements and taking into consideration our knowledge, experience and lender panel, which lender/product would suit them better.” It is not the broker’s role to “impose an option”, she says. “My belief is that the ultimate responsibility is with the consumer, and I hope BID will play a role in protecting mortgage brokers when it comes to this point.” Peasy already documents all interactions with clients and follows 18
all of its aggregator’s compliance recommendations. “Potentially there will be an impact on workload and extra paperwork required; however, as a broker, everything you do is already
then there probably isn’t space for them in our industry anyway.” She says most brokers do not recommend products solely to benefit from extra revenue or incentives from lenders.
“The customer is clear that I am operating in their best interest, and they have legislation protecting their rights” Josh Egan, managing director, Astute Melbourne City South and Gippsland customer-centric,” Christmann says. “So if any broker needs to make significant changes to their process and current resources to ensure they are acting in a client’s best interest,
“If you were to ask me which extra incentives there are from lenders or which lenders pay a higher or a lower commission percentage, I would not be able to tell you.
“These points do not come to our minds when recommending a product/lender, and I believe the majority of brokers would say exactly the same.” IFA Mortgages & Finance co-owner Anthony O’Flynn “The government appears to be trying to move brokers towards the financial planning model ... arranging home finance versus handling someone’s life savings is inherently different and should be treated as such,” says Anthony O’Flynn. The previous duty on brokers to provide a loan product that was “not unsuitable” was confusing. “If we have a new disclosure that mitigates any doubt that we are working for the client, I think this is a good thing and simply formalises what 99% of brokers had been doing anyway.”
WHAT IS THE BEST INTERESTS DUTY? Source: ASIC Regulatory Guide 273
Mortgage brokers assist consumers to obtain home loans by negotiating with credit providers on the consumer’s behalf
Brokers review various credit contracts from their panel and make a recommendation to the consumer based on information about the consumer and the nature of the product
BID extends this by requiring brokers to determine and assess the best interests of the consumer and present recommendations in line with those interests
The National Credit Act does not set out circumstances in which a mortgage broker is taken to have complied with these obligations
There is no ‘safe harbour’ – mortgage brokers will need to take all steps necessary to ensure that they act in the consumer’s best interests
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From left: Amanda Christmann, co-founder and manager of customer care, Peasy; Anthony O’Flynn, co-owner, IFA Mortgages & Finance; Catherine McFarlane, acting general manager, Oxygen Home Loans; Josh Egan, managing director, Astute Melbourne City South and Gippsland
O’Flynn says BID won’t affect IFA Mortgages’ client processes much. “We have been operating within the scope of BID prior to its roll-out and have always placed a lot of value on our disclosures and the continued education of our staff in relation to loan product.” As a guest speaker at a FAST conference pointed out, “he with the best notes, wins”, O’Flynn says. “Never a truer word was spoke. If you have the correct discussions with your clients and fully understand their position and intentions; it is very easy to log these discussions and protect yourself if a client has preferences beyond their ‘best interest’. ” BID will add more compliance work, but “we aren’t talking hours and hours for every file”. “We are fortunate that our aggregator, FAST, has been extremely proactive in providing up-to-date info and training on BID.” O’Flynn is concerned about BID’s effect on competition. If brokers are accredited with 35 lenders, they need to understand all the loan products, which could number in the hundreds, if not thousands. “I would hate to see a world where brokers trim their product offering to just a handful of banks – this would stifle competition.” In his nearly 20 years as a mortgage broker, O’Flynn has never heard of a broker recommending a lender simply to make an extra buck. “The conflict priority rule is reasonable and affords adequate protection from this occurring.” Oxygen Home Loans acting general manager Catherine McFarlane “The government is trying to protect consumers, which is important,”
says Catherine McFarlane. “All brokers should already be putting their customers’ interest ahead of their own, and our brokers do the right thing by their clients without this legislation.” BID is a good thing if it creates an environment that makes it difficult to put a broker’s own interest ahead of the consumer, as it will increase the quality of mortgage advice, she says. “BID will also reinforce the value of using a mortgage broker and allow us to further differentiate ourselves from the lenders, increasing our market share in the long term.” McFarlane says BID has increased
foot and introduced changes to its system well before it was required, giving our brokers ample time to be compliant. I am confident there will be no further impact to workload or business come 1 January 2021.” Most mortgage brokers already do the right thing by their clients, McFarlane says. “Our brokers are driven by a desire to help their clients, above and beyond any differing remuneration. Declaring known conflicts, incentives and commissions has always been a part of our process. “BID is just another way to empower the client with information to make an educated decision. The
“BID will also reinforce the value of using a mortgage broker and allow us to further differentiate ourselves from the lenders” Catherine McFarlane, acting general manager, Oxygen Home Loans the detail required and changed the delivery of information, but this protects the broker as well as the client. “It is also a valuable tool to educate clients through the process, empowering them to make their own choices and take ownership of their financial situation. Brokers will need to ensure absolutely everything is documented: the process, notes, conversations.” Oxygen has been implementing changes for most of 2020 to ensure its brokers are ready, through file reviews and regular industry training. “AFG has been on the front
challenge I see is declaring those conflicts that may not be known.” Astute Melbourne City South and Gippsland managing director Josh Egan “The new BID rule is aimed at ensuring that the prioritising of the consumer’s best interest is dictated in legislation, and that everyone in the industry is meeting the same obligations across the board,” says Josh Egan. While the industry has always kept the consumer’s best interest at the forefront, he says BID formalises the requirement that brokers understand
that the consumer is the priority. “The customer is clear that I am operating in their best interest, and they have legislation protecting their rights.” Egan says BID has not changed the way he operates. “We have had a very strong compliance process for a number of years, with a focus on providing our clients with multiple comparisons and a record of the recommendation we have provided, and, most importantly, what we have based that recommendation on based on their needs and circumstances. “A big component of what we already do is the education piece to help a client understand why a preference they have may or may not be in their best interest.” Egan envisages a smooth transition to BID at Astute. “Not much will change ... as within our client-documented process this is something we have followed for the better part of three years at Astute – we always operate in the best interest of the client.” Egan says BID requires brokers not to make recommendations that would favour the broker financially or in any other respect at the consumer’s expense. However, he adds that if the recommendation does prioritise the customer’s best interest and at the same time provides a higher revenue stream to the broker, as long as the client’s best interest is documented and demonstrated and potential conflict declared, it still meets BID requirements. AB
CONFLICT PRIORITY RULE
You must not recommend a product or service of a related party that would create extra revenue for yourself, your credit licensee or another related party, unless doing so would also be in the consumer’s best interest Source: ASIC Regulatory Guide 273
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PEOPLE
Have an interesting deal? Have a particularly difficult or interesting deal? Why not share it with us? Email:
antony.field@keymedia.com
BIG DEAL Andrew Algie, director of property and finance firm Addisons Advisory Group, had to act fast and do a detailed investigation to help two brothers who had signed a contract to rebuild a duplex but whose loan approval had fallen over THE FACTS
Clients Two brothers and their wives
Loan size and term $1,458,000 over 30 years
Goal To secure a loan for a duplex knock-down and rebuild
Location Sutherland Shire, Sydney
Clients become aware of Addisons’ business and services in many ways. In this instance, the clients found out about us through word of mouth, from one of our existing long-term clients. Two twin brothers who were living in the same property wanted to do a knock-down and rebuild of a duplex. They had been trying to get finance for over nine months and only had another three months to obtain finance approval or potentially lose their $25,000 deposit and face litigation from their builder. There was a non-completion clause in their contract that would have cost them over $100,000. They were discussing the frustration of sourcing a loan with a friend who had experienced a similar situation – before turning to Addisons for assistance. The brothers have now started the construction of their duplex and are glad that they contacted Addisons to assist them. They had previously received conditional approvals from two major lenders, both of which fell over at the last hurdle on final review of the loan. They had two big issues that we needed to work through:
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Aggregator Connective
The clients were living together in one house, so along with the financial pressure and potential penalties they were facing, there was the added pressure of their living situation. The dream homes they were hoping to build were quickly turning into a nightmare.
THE SCENARIO
• Servicing – both brothers had their own investment properties and associated loans that they had held for many years. • Equity – they already owed about $500,000 on the proposed property and had a build contract of just under $1m, which would have taken their LVR to nearly 100% based on the duplexes being valued on one title – which is how banks usually value these properties (rather than as separate titles as these clients had intended).
Lender CBA
THE SOLUTION
This was a complex scenario. We needed to identify how we could improve the
• Equity – because the clients’ mother lived with them and planned to continue to do so, we were able to identify the substantial benefit of using her house as additional security, and she agreed to be a guarantor for the additional loan. We educate our clients about the options that may suit their unique set of circumstances – the potential benefits and the risks. By providing these clients with detailed information, they were able to make an informed decision and fulfil their financial potential. After a family discussion, the solutions we proposed were agreed upon, and they were thankful that we took the time to provide these options that they did not know were possible. This is the point of difference Addisons offers: we have the expertise required to understand more complex transactions. THE TAKEAWAYS
Our philosophy is to work closely with our clients to devise personalised finance solutions. We don’t take a deal on face value and instead gain an in-depth understanding of our clients and their financial situation in order to capitalise on the advantages they may have.
We educate our clients about the options that may suit their unique set of circumstances – the potential benefits and the risks clients’ servicing and access to equity and do so in the short time frame available before penalties would be imposed. During the fact-finding process, our focus at Addisons is to really get to know the client and their situation in order to best meet their needs and financial situation. We discovered that their 78-year-old mother was living with them and that she also owned a property. Then we investigated their investment loans and the remaining loan terms and came up with the following solutions: Andrew Algie Director, Addisons Advisory Group
• Servicing – refinancing their existing investment loans and amortising these over 30 years would reduce their monthly commitments on these loans and make serviceability possible.
We also pride ourselves on having a strong understanding of lenders’ requirements, and it is through this solid base of knowledge that we can effectively tailor finance to our clients and their unique situations. These clients had been through a stressful experience with lenders and came to us feeling a bit jaded by the process. It was also clear that the other major lenders hadn’t taken the time to identify potential solutions and had made assumptions about the clients and their situation. After dealing with the Addisons team, the clients were able to avoid financial hardship and have since shared their story with friends, who have also contacted us to assist them with finance. For us, this is the best compliment we can receive. AB
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FE AT URES
BROKER PROFILES
BROKERS SHARE KEYS TO SUCCESS
Award-winning Melbourne brokers Belinda Gibson and Greg Pierlot have shown their ability to thrive in a struggling economy. They talk to Australian Broker about their achievements and views on the industry
the economic firestorm of COVID-19, 2020 has been a stellar year for Belinda Gibson, director of TM Finance Group, and Greg Pierlot, principal broker at The 500 Group. These brokers have continued to enjoy success, finding ways to grow their client base and communicate effectively with customers and business partners during Victoria’s lockdown. Their efforts have paid off: Pierlot was named La Trobe Financial Broker of the Year – Commercial at the 2020 Australian Mortgage Awards, while Gibson’s TM Finance Group won the Brokerage of the Year – Diversification award. Gibson and Pierlot both began their careers in banking. Pierlot spent 28 years in major banks, as a business development manager at NAB and a senior relationship manager at Westpac, before joining The 500 Group as a commercial finance broker in 2013. Gibson entered the broking industry in 2014, founding TM Finance Group after leaving her job as a commercial relationship manager at Westpac. “This role and 14 years of experience in lending gave me the skill set to build relationships and write loans for a huge variety of businesses and commercial lending needs, from invoice financing through to commercial property development,” Gibson says. “At the time I didn’t know a lot about being a broker – aggregators, accreditations, commissions were all new to me. But I knew credit, how to write a business submission, and about consumer credit and DESPITE
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equipment finance. I also knew that what one lender may not have the appetite for another would.” When founding her business, which covers commercial and equipment finance as well as residential, Gibson says she focused on her beliefs and values – service,
all about learning policy and processes: “leveraging of the right BDMs, attending training sessions, asking questions”. “Be memorable to your customer for the right reasons; be patient, learn, practise and build your confidence,” she says.
“Every approval, every settlement is an achievement and a success, as there is a person or a business that this impacts” Belinda Gibson, director, TM Finance Group integrity and community – principles she adheres to today. “I next focused on growing an independent, stable, successful team and business – and that I am incredibly proud of.” For brokers who are interested in diversifying, Gibson says it’s
Pierlot says that even while working in banking he was always passionate about business. “I admired business owners enormously and wished to leave the comfort of a well-paid career to do what they do. I knew that business owners had many sleepless nights,
but what inspired me was the way they would quickly adapt, innovate and change to ensure they survived and then thrived in the face of events that were often outside their control.” This resilience and ability to adapt when times get tough, particularly during the pandemic, is a common theme for both Pierlot and Gibson. “COVID-19 is a great example of the way adaptability and innovation can be achieved, even when forced upon the business owner, and it can be exciting,” Pierlot says. The pandemic forced The 500 Group to review its operating model, finding ways to work remotely while continuing to support its brokers and clients; using technology to stay connected and improve productivity; and setting aside time each week as a team to review performance and address operational issues. “Each week we also dedicate half a day specifically to strategy and innovation,” says Pierlot. “We engaged an innovation specialist to help guide us through the process and these sessions. Through this and constant communication via Zoom, we have been able to keep the team focused and highly engaged.” Gibson says running a diversified business is a continuous journey of learning, growing and developing skills not only as a broker but as business director. “What I did see during the pandemic was leadership, from brokers, their staff and BDMs on the front foot to support their clients, their clients’ businesses, their staff and their colleagues,” says Gibson. “I consider myself lucky that I can call some incredible brokers in this industry my friends, colleagues and business partners. Having their support and being able to share information, experiences or even see
TOP TIPS FOR BROKERS WANTING TO DIVERSIFY
Belinda Gibson: Educate yourself: learn the policy and processes, attend training sessions, ask questions Rely on the right BDMs Be patient, learn, practise and build your confidence Greg Pierlot: Accept that you will have a significant learning curve Partner with an experienced commercial broker Build your knowledge and skills
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Belinda Gibson, director, TM Finance Group
a friendly face on Zoom, particularly during March and April, was something I will always value.” TM Finance Group called all its customers to check on their wellbeing and determine if they had been affected by the pandemic and needed help. “This was tough on everyone. Some of the stories we heard will stay with us for a long time. It was important to let customers know we are here to help if they need it,” says Gibson. Celebrating achievement is also important to Pierlot and Gibson. They are thrilled by their honours at the AMAs but also by their day-to-day successes. Pierlot highlights The 500 Group’s refining of its value proposition for customers, referral partners and bankers. “Whilst at one level the broker value proposition is self-evident, what we offer as an industry extends way beyond providing choice and a great deal for borrowers. Being able to clearly articulate this is important and very powerful,” he says. Pierlot also points to the brokerage’s well-received Loan and Bankability Assessment program, which enables it to advise business owners on where they stand with the banks and improve their access to finance. “This has significantly reduced the time needed to assess a borrower’s position, highlight potential issues to be addressed and then submit the application to bankers in a format that reduces their assessment time.” The next step is to take it online as part of a fully integrated commercial broking solution.
Greg Pierlot, principal broker, The 500 Group
Gibson is proud of the way TM Finance Group has supported its clients through the pandemic. “Every approval, every settlement is an achievement and a success, as there is a person or a business that this impacts,” she says. “A first home buyer is always special, businesses buying commercial property, and saving people thousands of dollars when they refinance – it makes a real difference to those clients.” The 500 Group focuses on commercial and equipment finance. Pierlot says the key difference from
seeking to diversify need to accept that there will be a significant learning curve, and they should partner with an experienced commercial broker to deliver a quality client experience while they build their knowledge and skills. Change is a constant in the finance world, and Gibson and Pierlot have their own views on ways to improve the industry. Gibson says it now takes a lot longer to write a loan than ever before, and TM Finance Group uses technology as much as possible for loan assessment, such as
“COVID-19 is a great example of the way adaptability and innovation can be achieved, even when forced upon the business owner, and it can be exciting” Greg Pierlot, principal broker, The 500 Group residential loans is the complexity and variables that need to be considered for each finance request. “This complexity requires a broker to understand the financials of a business and trace the flow of funds, particularly where multiple entities are involved,” he says. “The analysis also needs to focus on material movements in the company balance sheet, as well as the servicing of the borrower’s total debt position.” Pierlot says brokers who are
bankstatements.com.au, DocuSign and Trello for pipeline/workflow management. “I’d love to see banks embrace technology more,” she says. “Every bank has a different VOI process to achieve the same outcome. “The eDoc process is incredible and so fast. It’s simply not efficient to be posting loan contracts when we have the technology to improve the end-to-end customer experience.” Pierlot says there is an urgent
need for a single fully integrated, user-friendly system for commercial, mortgage and equipment finance broking, one with a central database and CRM, sales and marketing, data collection, document and communications management, job tracking and employee management. “Whilst some moves have been made in this direction, the solutions appear to be principally focused on residential broking. Currently there is too much double handling and a lack of automation that impacts industry productivity, profitability and growth,” he says. Pierlot and Gibson are excited about the future. “If September, October and November’s activity is anything to go off, I think we’ll be needing another team member very soon,” Gibson says. “Early this year there were glum forecasts for property. Customers and agents are telling me the opposite. There are towns in Gippsland where you can no longer buy any titled land; it’s all been snapped up by people wanting access to the builders grant.” Pierlot says, “Whilst COVID-19 has had a devastating impact ... we are already seeing increased demand from clients for finance as we move out of lockdown. “We are excited by the new initiatives being implemented to help automate and further improve the client experience. “We are also seeing new lenders in the market that are leveraging technology to offer borrowers more choice, flexible loan products, and all in very fast time.” AB www.brokernews.com.au
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23/11/2020 12:35:12 PM
PEOPLE
Do you have a question for our broker mentors? Email your question to:
antony.field@keymedia.com
BROKER ON BROKER
Stephen McClatchie is the managing director of Loans Australia, a Melbourne brokerage that provides ‘investment grade’ portfolio finance strategy solutions. It won two excellence awards at the Australian Mortgage Awards: one for McClatchie in the Broker of the Year – Productivity category and another for Brokerage of the Year (6–20 staff). McClatchie shares his views on adapting to the best interests duty
With the best interests duty set to roll out on 1 January 2021, are brokers ready for this? brokers I’ve spoken to A Most are not ready and do not understand the best interests duty. Brokers are waiting for direction from their aggregator to fully understand how BID will be implemented into their workflows. Whilst brokers believe they already act in the best interest of their clients, the legislation is very grey on how to prove this. Many brokers are used to dealing with only two to three main lenders, and under BID this is not in the best interests of clients. If brokers have 25 lenders on their panel, they must have clear reasons and documentation as to why lenders are included or not included in a scenario.
Q
Under BID, brokers are Q obliged to educate their clients. What education strategies are you putting in place to do this? starts by A Education understanding a client’s position and what they want to achieve. This forms the basis of any client recommendations. Educating the client on the products is paramount. I am producing fact sheets and videos to explain the essential lending parameters, including products, policy features and costs. These will be made available to clients from the start.
Do you think BID will be achieved in its current regulatory framework? Most brokers do not have the A education and training to thoroughly communicate and understand the client’s goals and ensure deliverance of BID. We are now relying on our industry bodies and aggregators to ensure we fully understand and ask the appropriate questions to deliver what ASIC deems as best interest. My concern is that many brokers will be underprepared to operate under BID by January and that the media will highlight a few unfortunate circumstances. BID is a good idea, but it has come way too soon for the professional mortgage broker. BID principles are more aligned to financial planning or mortgage broking degree qualifications.
Q
How can a mortgage broker run a profitable business in this era of massive legislation and oversight? Brokers must focus on what A makes them money – speaking to clients, researching scenarios and presenting suitable options. They will need to rely heavily on their aggregator to understand new workflows and delivery. Solo brokers may consider joining larger groups and leveraging off their expertise and support staff. Brokers need to outsource everything that doesn’t include the upfront client session or they’re going to find themselves bogged down with admin. Brokers need to be experts in
Q
Stephen McClatchie, founder and managing director, Loans Australia
“Many brokers are used to dealing with only two to three main lenders, and under BID this is not in the best interests of clients” providing client solutions and must have other experts around to ensure they meet compliance obligations. I am introducing an upfront client
fee for new applications to help cover the costs of running a profitable business, and I encourage other brokers to look at this option. AB
PITSTOP MENTORING Are you new to the industry, or simply keen to learn from experienced brokers who have words of wisdom to share? This is your opportunity for pitstop mentoring! If you have a question you’d like a senior broker to answer, contact us and look out for an expert answer in a future issue.
24
www.brokernews.com.au
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23/11/2020 12:36:03 PM
FE AT URES
OPINION
PREPARE FOR POSITIVE CHANGE AHEAD The mortgage industry faces great change in a post-pandemic world. The federal government has introduced stimulus policies, and there’s a new regulatory environment. Clive Kirkpatrick, of new brokerage Award HomeLoans, asks if brokers are well prepared for change
is no doubt that the COVID-19 outbreak has had an unprecedented impact, but the Australian economy is already showing signs of early recovery. ANZ-Roy Morgan’s latest report shows that the Consumer Confidence Index is currently at its highest level since mid-March when the pandemic struck. The unemployment rate is also lower than forecast, and job advertisements continue to surge for the fifth month in a row. The mortgage industry has seen some interesting effects brought about by the pandemic. A recent CoreLogic report shows that house prices in Sydney have increased substantially in the last quarter. Additionally, anecdotal evidence shows properties sitting on the edge of or outside metropolitan areas have experienced significant growth. This may be a result of people moving out of the city, or looking to move out, due to more flexible working arrangements such as working from home. The federal government has implemented several assistance programs during this year’s tough economic situation. COVID-19 initiatives such as JobKeeper and JobSeeker have helped people through the core of the pandemic, with some of this money being moved into savings. Additionally, the tax cuts announced in the recent federal budget and backdated to 1 July 2020 have contributed to more cash in the pockets of Australians. The government has also introduced the HomeBuilder program, which offers a grant of $25,000, with a few qualifying criteria, to people who are planning to either develop a property or build a new property. The Reserve Bank of Australia has also dropped the cash rate again, from 0.25% to an all-time low of 0.10%. This will further reduce borrowing costs. The NSW government has provided several first home buyer assistance schemes to encourage growth in the market. A $10,000 grant is available to all first-time buyers. Stamp duty is also waived
for new properties worth up to $800,000, with reductions for those up to $1m. More small businesses have received assistance as well. Owners of businesses with an aggregate turnover of less than $500m can now claim for assets purchased for use in their businesses, such as motor vehicles, trucks, trailers, tools and fit-outs, under the instant asset write-off. This provides greater opportunities for brokers in equipment finance. All these incentives are designed to help stimulate the economy by making borrowing a little easier and encouraging
THERE
what is in their best interests. We have never had an operational disruption to back-office support, which enables all brokers to service our customers on a seven-days-a-week basis. With this infrastructure, we are confident we can adapt to all regulatory changes, such as BID when it comes into force in January. Apart from that, brokers will be supported from day one, being introduced to a well-structured onboarding and continuous training program provided by Award HomeLoans, lenders, aggregators and other professional bodies.
BID will put brokers in an even better position when it comes to helping their customers, and will be a big boost to growth in their market share
Clive Kirkpatrick CEO, Award HomeLoans
an increase in investment. Through these initiatives, Australians can fund their first home or investment property more easily. Best interest duty regulations start on 1 January 2021. BID will put brokers in an even better position when it comes to helping customers, and will be a big boost to growth in their market share. A broker can tell customers that they are legally bound to have their best interest as the prime goal, but if that customer goes to a bank they do not have the same protection. This opens up even more opportunities for brokers to help more customers with their broader financial needs. Award HomeLoans expands the broker opportunity further. It leverages off the success of the Award Mortgage business and its infrastructure. What is unique about Award HomeLoans is that it has invested quite heavily in back-office facilities, and these will enable brokers to spend more time with their customers to determine
Importantly for brokers, there is a solid and active referral system, including cooperation with developers and real estate agents who can supply quality leads for Award brokers. The Award HomeLoans proposition allows the broker to invest in their own business, employ a team to grow the business, and leverage the strong infrastructure that has been created. This would be a wonderful opportunity for brokers working for other brokers, or bank loan writers looking for the next step. In summary, a number of government initiatives have been announced that provide more opportunities for Australians and encourage them to start investing in the real estate market or their businesses. This is an opportune time for people to start seriously thinking about how they can take advantage of such schemes to create a more financially stable future for themselves and to help rebuild the Australian economy. AB www.brokernews.com.au
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23/11/2020 12:36:43 PM
DATA
QUEENSLAND
ACT SPOTLIGHT
First home buyer activity in the housing market is at its highest level in 11 years New loan commitments from first home buyers increased by 70% year-over-year in September, reaching their highest level since June 2009. Over the month, FHBs comprised 41% of new loan commitments for the purchase of dwellings. Adam Empringham, sales director at Image Property, said one indication of strong buyer interest was the increase in the non-renewal of rental leases. “We have had about 30 tenants indicate to us that they wouldn’t be renewing their leases in the past few months because they intend to buy their first home instead. This is far more than what is usually recorded,” he said. Empringham said measures by the federal and state governments to spur housing market activity are encouraging the interest of would-be buyers. “We have a number of government grants and concessions for first-time buyers, which is bringing forward their property ownership plans. All in all, market conditions across the southeast are strong,” he said. Area
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
rent
yield
$410
3.9%
Metro (H)
$550,000
0.9%
1.9%
Metro (U)
$390,000
0.0%
0.3%
$380
5.1%
Country (H)
$450,000
0.6%
1.2%
$400
4.6%
Country (U)
$380,000
1.3%
2.4%
$350
4.8%
TASMANIA
The state has promised $16.8m in funding to extend the Safe Space program The Tasmania government has announced funding that will enable its Safe Space housing program to run through to June 2022 in Burnie, Launceston and Hobart. Over $6m of a total of $16.8bn will be used to deliver general health and mental health support to people experiencing homelessness. The program forms part of the state’s construction blitz, which involves $3.1bn worth of construction and investment. Housing Minister Roger Jaensch said, “This commitment will continue to ensure that Tasmanians who are sleeping rough can access a safe overnight refuge and the supports they need to access other health and housing services,” he said. Pattie Chugg, CEO of Shelter Tas, said it was crucial for the economy and the public good to invest in social housing. “The best way to address the housing crisis, homelessness and housing hardship is to increase the supply of social housing which sets rents as a proportion of household income and therefore remains affordable in the long term,” she said. Area
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
rent
yield
Metro (H)
$515,000
2.5%
9.1%
$450
4.5%
Metro (U)
$388,500
0.2%
5.0%
$395
5.1%
Country (H)
$340,000
1.5%
9.7%
$330
5.0%
Country (U)
$274,000
1.8%
5.7%
$280
5.2%
26
DEMAND LIFTS IN PRESTIGE MARKET Canberra’s prestige residential market has been experiencing robust demand over the past two years has been strong interest in Canberra’s prestige market followed a lengthy period of stable prices, says Sandra Howells, local property valuer at Herron Todd White. “Underpinned by low interest rates, stable and strong local economic factors, high average disposable incomes and limited supply, prestige house prices have seen strong growth,” she said. Forrest, Yarralumla, Old Deakin and Red Hill are the most popular suburbs in terms of prestige market demand. Stand-alone dwellings in the inner northern and inner southern suburbs are typically sold for around $4m, while units and townhouses go for around $3m. Early this year, Canberra saw its highest-ever sales transaction with the $8m sale of the 25 Mugga Way property, with a land area of 7,962sqm. Howell said the continued development of the Kingston Foreshore and the Lonsdale Street precincts in Braddon had been a strong driver of demand for higher-quality medium-density THERE
properties. The proximity to the CBD and water views are the two features most buyers consider before going with a purchase. “The prestige medium-density market has seen several high-quality developments reaching completion in 2020,” she said. Sapphire on the Kingston Foreshore and Estate on State Circle in Forrest are two notable medium-density developments, with properties typically selling for $10,000–$15,000 per sqm. Canberra’s prestige rural residential areas have also seen their fair share of housing demand. Suburbs like Wallaroo, Springrange and Sutton have been performing well. Blocks range from around 5ha to 100ha and price points from $2m to $5m. “Participants and purchasers in the market segments listed generally include medical professionals and specialists, IT and high-level government consultants and property developers,” Howell said.
CANBERRA HOUSING MARKET INDICATORS — NOVEMBER 2020 Source: CoreLogic
Houses
$725,000
5.7%
$580
4.3%
Median price
Annual growth
Weekly median rent
Gross rental yield
Units
$445,000
4.7%
$480
5.6%
Median price
Annual growth
Weekly median rent
Gross rental yield
SUBURB TO WATCH: CAMPBELL Median price (houses) $1,227,500
Median price (units) $515,000
12-month growth -4%
12-month growth 0%
3-year growth Average annual growth 5%
Gross rental yield
4.7%
3%
Average annual growth Weekly advertised rent
Gross rental yield
9%
$598
6%
www.brokernews.com.au
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23/11/2020 12:37:29 PM
WESTERN AUSTRALIA
Sales activity saw a marginal decrease during the first week of November The Real Estate Institute of WA (REIWA) recorded 910 property transactions in Perth in the week ending 8 November – a 1% decline from 933 in the last week of October but a nearly 45% jump from 628 in same period last year. Houses made up the majority of sales, with 624 sold, a drop of 7% from the previous week. REIWA also reported a total of 155 apartment units and 131 lots of vacant land sold, an increase of 5% and 25%, respectively. Scarborough, Morley, Ellenbrook and Bassendean were the top-selling suburbs north of the Swan River, while Como, Canning Vale, Byford and Spearwood posted the highest sales in the south of the city. In terms of stock, the WA capital registered 10,221 properties for sale from 2 to 8 November, a 1% rise week-on-week but a 28% decline year-on-year. Total house listings were at 5,086, a 2% uptick from the previous week. Unit listings increased 1% to 2,552, while vacant land stock dropped 1% to 2,583. Area
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
rent
yield
Metro (H)
$477,000
0.0%
-1.0%
$370
4.1%
Metro (U)
$363,000
-0.7%
-2.7%
$340
4.8%
Country (H)
$357,500
4.3%
4.6%
$350
5.4%
Country (U)
$175,000
-2.3%
-9.1%
$300
8.0%
VICTORIA
Victoria is to spend $5.3bn on building more than 12,000 social housing homes
HIGHEST-YIELD SUBURBS IN AUSTRALIAN CAPITAL TERRITORY Suburb
House
Gross rental yield
Median price
Quarterly growth
12-month growth
Average annual growth
DICKSON
U
7%
$405,000
-16%
-8%
0.7%
LYONS
U
7%
$277,500
-1%
-31%
2.8%
CHIFLEY
U
7%
$300,000
0%
-5%
3.1%
CRACE
U
7%
$367,500
-7%
15%
-6.2%
CITY
U
7%
$503,000
-1%
8%
1%
LYNEHAM
U
6%
$385,000
0%
-3%
-0.2%
PHILLIP
U
6%
$363,750
7%
-5%
-0.4%
FORREST
U
6%
$530,000
-1%
-11%
-0.7%
KINGSTON
U
6%
$548,500
0%
2%
1.7%
DENMAN PROSPECT
H
5%
$902,000
4%
16%
20.7%
Victoria is funding a social housing project that will span metro and regional Victoria and support around 10,000 jobs per year over the next four years. Around 25% of a $5.3bn investment will be allocated to regional Victoria. “This unprecedented housing blitz will deliver new homes and jobs across Melbourne and regional Victoria. We’re delivering the biggest investment in social housing Victoria has ever seen,” said Richard Wynne, the state’s housing minister. The funding aims to deliver 9,300 new social housing homes, including the replacement of 1,100 old public housing units. An additional 2,900 new affordable and low-cost homes will also be built to help low-to-moderate income earners live closer to where they work and provide options for private rentals. The project is expected to increase the state’s social housing supply by 10%. It is also projected to boost Victoria’s economic recovery, generating an estimated $6.7bn in economic activity and supporting a peak of more than 18,000 jobs. Area
Metro (H)
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
$725,000
0.7%
rent
yield
5.7%
$430
3.0%
Metro (U)
$585,000
0.9%
7.3%
$420
3.7%
Country (H)
$400,000
1.8%
6.5%
$350
4.7%
Country (U)
$312,000
1.7%
9.3%
$290
4.9%
www.brokernews.com.au
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23/11/2020 12:37:48 PM
DATA
NORTHERN TERRITORY
NT housing markets continue to recover, with gains in both sales and median prices According to the latest market report from the Real Estate Institute of the NT, sales of detached homes across Greater Darwin increased by 2.5% over the September quarter, pushing prices slightly upwards by 0.5% to a median of $480,000. Compared to last year, prices in the region during that period were 4.3% higher. Greater Darwin’s unit market was busier in the September quarter, reporting a 34.6% gain in sales. Unit prices increased by 7.1% to $300,000. Inner Darwin and Palmerston saw gains in both sales and median prices in the two housing segments. However, the median price of properties in some areas declined despite the strong turnout. For instance, median prices in Alice Springs declined by 4.6% to $450,000 for houses and 11% to $300,000 for units, despite 72.5% growth in detached home sales and 30% gain in unit sales. According to the report, this could be due to a larger number of sales occurring in the $350,000 to $450,000 bracket and below $350,000. Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
rent
yield
Metro (H)
$470,000
1.1%
-2.1%
$450
5.0%
Metro (U)
$277,500
-3.4%
-9.7%
$350
6.5%
Country (H)
$415,000
0.1%
-2.5%
$480
6.1%
Country (U)
$300,500
-0.2%
-2.0%
$370
6.4%
Total auctions
79
Cleared
40
Uncleared
4
Clearance rate
90.9%
PERTH Total auctions
26
Cleared
7
Uncleared
12
Clearance rate
36.8%
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
rent
yield
Houses
Units
Sydney Melbourne Brisbane
Adelaide
Perth
Darwin
$480,000
$672,000
$475,000
$435,100
$553,000
Hobart
$300,000
$0
$352,500
$100,000
$478,500
$200,000
$338,000
$300,000
$472,750
$500,000 $400,000
$380,000
$700,000 $600,000
$510,000
$800,000
$565,000
$900,000
$685,350
According to the latest market update from CoreLogic, the median dwelling value in Adelaide rose by 1.2% in October to $455,425, leading the overall growth in median values across the country. “Relatively low housing prices, an effective flattening of the virus curve and the stimulus of low interest rates are likely to be the main factors behind the growth in housing values, said Tim Lawless, head of research at CoreLogic. Every subregion of Adelaide reported gains in dwelling values over the previous three months. Onkaparinga registered the strongest quarterly growth at 5.4%. John Lindeman, a property market analyst, said Adelaide was among the capitals exhibiting good potential for investors who want to buy and hold. Furthermore, its median house price was relatively more affordable than in other capital cities, making it more attractive to investors. “It’s a property market that combines liveability and affordability with long-term growth consistency and price stability,” he said.
Canberra
CAPITAL CITY HOME VALUE CHANGES Capital city
Weekly change
Monthly change
Year-to-date change
12-month change
Sydney
0.1%
0.3%
1.7%
4.6%
Melbourne
0.2%
0.5%
-2.7%
0.0%
Brisbane
0.1%
0.5%
2.1%
3.3%
Adelaide
0.2%
0.9%
3.7%
4.6%
0.2%
0.7%
0.1%
0.4%
0.2%
0.4%
0.5%
2.7%
Metro (H)
$477,000
1.1%
3.3%
$380
4.2%
Metro (U)
$334,500
-1.9%
-3.6%
$330
5.2%
Perth
Country (H)
$270,000
0.0%
1.9%
$270
5.1%
Combined 5 capitals
Country (U)
$219,000
0.5%
1.7%
$210
5.1%
28
ADELAIDE
MEDIAN HOUSE AND UNIT PRICES
Adelaide’s housing market has clocked its largest monthly gain since 2008
Area
The combined capital city preliminary auction clearance rate for the week ending 15 November was 75.1%, compared to a preliminary clearance rate of 73.3% the previous week, revising down to 69% at final figures. There were 1,739 homes taken to auction, down from 1,757 auctions the week before. One year ago, 2,590 homes were taken to auction and 70.1% of reported auctions were successful. Melbourne hosted 603 auctions, down from 611 the previous week and 1,242 the same week last year. Of the 502 results collected so far, 73.5% were successful, increasing from the previous week’s preliminary clearance rate of 71.8%, revised down to 68% at final figures. In Sydney, 849 homes went to auction, compared to 851 over the previous week and 947 last year. The preliminary clearance rate was 76.6%, down from 78.6% the previous week, revised to 73.3% at final figures. Last year, 71.9% of reported auctions were successful.
$647,500
SOUTH AUSTRALIA
WEEK ENDING 15 NOVEMBER 2020
$830,000
Area
CAPITAL CITY AUCTION CLEARANCE RATES
*The monthly change is the change over the past 28 days
www.brokernews.com.au
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23/11/2020 12:38:14 PM
BRISBANE CANBERRA Total auctions
95
Cleared
70
Uncleared
8
Clearance rate
Total auctions
87
Cleared
26
Uncleared
23
Clearance rate
53.1%
89.7%
SYDNEY Total auctions
849
Cleared
533
Uncleared
163
Clearance rate
76.6%
TASMANIA
MELBOURNE Total auctions
603
Total auctions
0
Cleared
360
Cleared
0
Uncleared
133
Uncleared
0
Clearance rate
Clearance rate
73.5%
NEW SOUTH WALES
Area
n.a.
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
rent
yield
Sydney’s inner-city rental markets are still feeling the impacts of COVID According to the Real Estate Institute of NSW (REINSW), Sydney’s overall vacancy rate increased to 4.3% in October. This was due to the inner-ring region’s vacancy rate going back to its all-time high of 5.8%. “After a 0.6% drop in August, vacancies have again been on a steady rise in the inner city, indicating that the COVID-19 fallout is far from over for landlords,” said Tim McKibbin, CEO of the REINSW. The vacancy rate in the outer region also increased in October, from 2.1% to 2.6%. Only the middle ring bucked the uptrend, with its vacancy rate dropping from 5.5% to 4.9%. On the other hand, vacancies across regional NSW remained tight. “From the earliest stages of the onset of the COVID-19 pandemic, we saw tenants relinquishing their properties in favour of more affordable options in suburbs more distant from the popular metro hubs and, in fact, even further afield into regional areas,” McKibbin said.
Metro (H)
$925,000
1.2%
5.6%
$530
2.9%
Metro (U)
$712,000
1.1%
3.2%
$500
3.6%
Country (H)
$500,000
1.5%
5.5%
$400
4.2%
Country (U)
$435,000
1.7%
3.6%
$350
4.2%
Source: Except where otherwise stated, all data sourced from CoreLogic, November 2020
NICK YOUNG: TRAIL BOOK SALE EXPERT Sell your trail book in part, or in full. Release working capital. Keep your clients. 03 8508 6666 | 0417 392 132 | nyoung@trailhomes.com.au | trailhomes.com.au www.brokernews.com.au
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23/11/2020 12:38:39 PM
PEOPLE
IN THE HOT SEAT
Vow Financial NSW state manager Peter Bryant was named Bankwest Best Aggregator BDM at the 2020 Australian Mortgage Awards. He talks about his 38-year career in finance and how he helps brokers achieve success
What was your first job before you joined the finance industry? A My first job was working for David Jones packing grocery bags. I quickly learned that cartons of eggs go on top when packing bags. It taught me a lot about customer service and how little things can be big things that set you apart from your competitors who are offering the same product or service.
Q
How long have you been a BDM, and what led you to your current position? A I have been a BDM at Vow Financial for just over 13 years. I started at NAB as a junior clerk, working my way up to branch manager and then on to commercial lending before discovering the rewarding world of third party mortgage broking when I joined St. George Bank as a BDM in 2002. It was right at that time when mortgage brokers saw unbelievable growth within the market, which was extremely exciting, but this did not come without hard work and commitment. My prior career in banking gave me a better understanding of how the two could co-exist in the marketplace. I am so honoured to be recognised as Best Aggregator BDM. This achievement is more about the recognition of the hard work and dedication I have put into my role, but I could not have achieved this on my own. I thank the many people that I work with who have given me their support.
Q
How would you describe your role and the way it assists your aggregator business and the work of brokers? role has a strong focus on the establishment of relationships A My not only with my brokers but also our lender partners, with the end benefit to the customer always front of mind. It is this role that is so important in assisting our brokers in building strong and successful businesses. It drives a positive culture in our network that other brokers want to become part of, so it assists with recruitment in many ways. Education also forms a large part of my role, and it can take many shapes and forms. Lender product knowledge is one of the main areas, as many of our lender partners have a number of unique products and services, and without broker awareness these can lead to lost opportunities.
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Peter Bryant, NSW state manager, Vow Financial
What has surprised you most during your career in the finance industry? A How long it has taken this industry to adopt and apply technology. There are some great software platforms that aggregators are offering in the marketplace at the moment, but it has taken some time to get there.
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If you weren’t a BDM, what would your ideal career be? A I have always loved two things – food and providing a great customer experience. If I was not a BDM, then I could see myself owning and running either a restaurant or upmarket cafe. AB
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