JANUARY 2021 ISSUE 18.01
Key ingredients for business success Focusing on the elements you can control, rather than what you can’t, is vital to success in business /13
Industry views on stamp duty reform Brokers and real estate experts comment on the proposed NSW annual property tax /18
Looking to a brighter year ahead 2021 will provide growth and opportunity for both brokers and lenders, say key industry figures /22
ALSO IN THIS ISSUE…
JAMES BOYLE Liberty Financial Group is confident of further success in 2021 after listing on the stock exchange and launching new products last year /14
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Big deal Michael Hughson finds a solution to a client’s bad debts /21 Opinion Why brokers should market themselves in the community and online /25 In the hot seat How Andrew Loucas made the move from banking to broking /30
18/01/2021 10:01:04 AM
NEWS
IN THIS SECTION
Lenders Open borders key to SME recovery – ScotPac study /04
Aggregators Top five tips for brokers to succeed in 2021 /06
Market Strong housing market set to continue /10
Industry bodies MFAA launches 2021 Excellence Awards /12
Technology Cloud-based platform powers MoneyPlace credit decisions /08
www.brokernews.com.au JANUARY 2021 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
SLOW VACCINE ROLL-OUT A RISK TO CANADA RECOVERY, SAYS BANK slow pace of Canada’s COVID-19 vaccine deployment poses a significant risk to the nation’s economic recovery, according to the Bank of Montreal. The Toronto-based bank estimated that, as of 4 January, only 0.32% of Canadians had been inoculated. This was considerably lower than the rate seen in other developed economies, like the US and UK, which had already administered vaccines to roughly 1.4% of their populations. BMO chief economist Doug Porter said that while it was early in the vaccination process, the trend was a worrying one. Canada had so far administered 40,000 vaccine shots per week. BMO said this would have to reach 550,000 doses per week for the government to meet its pledge of inoculating 60% of the population by September. THE
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SPLIT VIEWS ON EFFECTS OF DEMOCRAT WIN ON PROPERTY MARKET is divided over what the Democrats’ victory in the Senate and House of Representatives will mean for the US housing market. President-elect Joe Biden’s agenda includes a stimulus package, infrastructure spending and more affordable housing. “More spending is inflationary and higher inflation generally means higher bond yields. Higher bond yields mean higher mortgage rates,” said William Raveis Mortgage executive mortgage banker Melissa Cohn. Rich Schulhoff, CEO of Brooklyn MLS, disagrees. “I really believe that the only thing that will affect the real estate industry, at least for the first six or seven months of 2021, is going to be how much the pandemic is placed under control. I don’t know if putting $2,000 in anyone’s pocket is going to make that much of a difference.” OPINION
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U.S. SEEKS TO PROSECUTE MEN OVER ALLEGED MORTGAGE SCAM US government is pursuing three New York men who allegedly purchased homes at THE depressed prices at the expense of a taxpayer-funded program, the US Attorney for the Eastern District of New York has announced. The complaint alleges that the defendants – Iskyo Aronov, Ron Borovinsky and Michael Konstantinovskiy – ran a wide-ranging mortgage scheme to defraud the Federal Housing Administration of the US Department of Housing and Urban Development (HUD). Between 2013 and 2016, Aronov and his co-conspirators engaged in the “short sales” of nine homes in Brooklyn and one in Queens Village, acquiring the properties at depressed prices through HUD’s pre-foreclosure sale program. Under a company called My Ideal Property Group, the men pushed the scam to homeowners who were behind on their mortgage payments or facing foreclosure.
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This magazine is printed on paper produced from 1OO% sustainable forestry, grown and managed specifically for the paper pulp industry Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Australian Broker magazine can accept no responsibility for loss. Australian Broker is the most-often read industry publication, according to independent research carried out by the Ehrenberg-Bass Institute for Marketing Science at the University of South Australia in December 2008. The research also found that brokers rate Australian Broker as the best for both news content and feature articles, followed by sister publication MPA. Overall, on all categories, Australian Broker ranks top followed by MPA. The results were based on a sample of 405 respondents who were the subject of telephone interviews.
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18/01/2021 8:17:44 AM
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18/01/2021 8:18:02 AM
NEWS
LENDERS SMEs RELYING MORE ON BROKERS FOR ADVICE
POSITIVE YEAR AHEAD FOR ECONOMY, SAYS CBA
Source: ScotPac SME Growth Index
entered 2021 with a positive economic and market outlook, according to CommBank chief economist Stephen Halmarick, and has done a “better job than just about any other nation in controlling the spread of the virus”. This, combined with the fiscal and monetary policy support of the RBA and the role played by Australian banks, meant the economic impact of COVID-19 was less severe in this country than in many others and “less severe than initially expected”, he said. AUSTRALIA
53%
of SMEs relied more on their key adviser during the pandemic
63%
BETTER CHOICE SLASHES HOME LOAN RATES lender Better Choice Home Loans has opened the new year by providing out-of-cycle rate reductions on some of its home loan products. Better Choice executive director Allan Savins said the rate cuts had been implemented across many of the lender’s prime, alt-doc and specialist portfolios, and apply to loan applications from 1 January. The reductions range from 0.3% to more than 1%, with Better Choice’s Platinum Prime Variable principal and interest home loan rates slashed by 1.13% to 3.59%.
of SMEs leaned on their key adviser to assist them in cutting costs
82%
of SMEs said using an adviser had a positive impact on their business
35%
of SMEs sought advice on accessing government stimulus
NON-BANK
“We see it time and time again; businesses with a trusted broker in their corner have a much better chance of success” Craig Michie Senior executive, ScotPac
OPEN BORDERS WILL BE KEY TO RECOVERY, SAY SMES Survey of small business owners shows that they see open borders as crucial to economic recovery, and are also relying more on brokers for advice SME owners have named open borders as the top factor needed for the economy to rebound from the COVID-19 recession. In the latest ScotPac SME Growth Index research, which polled 1,252 owners or senior leaders of SMEs across Australia, open borders was nominated by 64% of respondents as their most-needed recovery factor. The SME survey is conducted twice a year by East & Partners on behalf AUSTRALIAN
of ScotPac, Australia’s largest non-bank SME lender. ScotPac CEO Jon Sutton said the call for open borders was consistent across small business respondents, no matter their state, business size or industry sector. “Given the COVID-19 spikes first in Victoria, then South Australia and now NSW, and the varied way the states are dealing with border closures, it’s clear that the small business sector sees a unified approach as the way out of trading difficulties caused by the pandemic,” Sutton said. A further 25% of small businesses
went beyond the survey response options and wrote that their biggest recovery factor would be reducing state power and giving the federal government greater control over open borders. The research also showed that a majority of SMEs have relied more heavily on their key financial adviser than ever before – and “overwhelmingly” reported that doing so had had a positive impact. Nearly 54% said they had turned more regularly to their advisers, such as their broker, reaching out 13.3 times each quarter. Eight in 10 (82%) SMEs who sought advice from trusted advisers said it had had a positive impact on operations. “We see it time and time again; businesses with a trusted broker in their corner have a much better chance of success,” said ScotPac senior executive Craig Michie.
Faster than banks Cheaper than caveats Difficult loans • When banks can’t help •
For quick solutions call today
Catherine Willoughby
Adelaide 08 8408 0800 | Melbourne 03 9225 5189 | Sydney 02 9239 3144
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Australian Credit Licence No. 385467
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18/01/2021 8:18:32 AM
NEWS
A G G R E G AT O R S BRAND-NEW LOOK FOR AGGREGATOR FINSURE its 10th anniversary, aggregator Finsure has rolled out new branding to better reflect its identity and “multi-awardwinning service proposition”. Finsure CEO John Kolenda said the updated branding and logo would more accurately represent its commitment to providing “cutting-edge broker support solutions”. He said, “Finsure has always had a fresh and vibrant approach to delivering mortgage broking aggregation services. We wanted to leverage off that ethos and modernise our look across all aspects of the business to reflect this approach.” MARKING
PURPLE CIRCLE BREAKS LOAN SETTLEMENT RECORD
CONNECTIVE UNVEILS TOP TIPS FOR BROKERS IN 2021 An aggregator has distilled its predictions for the industry into five top tips for mortgage brokers looking to thrive in 2021 brokers to succeed this year, Connective executive director Mark Haron says they will need to foster “more regular and deeper connections” with customers, supported by technology that captures and leverages their information. Offering its “most important” tips for 2021, Connective says brokers should: • strengthen their connection with clients – don’t slip into transactional relationships • use technology to strengthen their connection with customers and maximise the commercial benefits • remain prepared for change; seek, listen to and learn from multiple sources • never underestimate the value FOR
Commercial Loans
they deliver to customers – and understand how to differentiate themselves • document how they act in their customers’ best interests “The best brokers were galvanised by the challenges of 2020,” Haron said. “They responded by reaching out to customers, guiding them through incredibly complex and tough situations and cementing their role as a trusted adviser, and they did all this while still preparing for BID and adapting to a changing landscape. “We’re confident brokers can continue to experience healthy growth in 2021 if they embrace the right technology that gives them more data-driven customer
insights, stay in front of regulatory changes and be conscious of macro-economic trends, and embrace the opportunities that come from changes. “Above all else, brokers need to remain empathetic and continue to educate and support their customers.” Haron said brokers achieving their highest-ever market share of 60.1% in the July to September quarter showed how successfully they rose to the “challenge that was 2020”. “As the country and industry navigates a phase of recovery, not just from COVID-19 but also from royal commissions and the fatigue of preparing for a changing regulatory landscape, brokers have an opportunity to rebuild and differentiate themselves,” he said. “Brokers need to hold onto to these connections and keep up the check-ins with customers, but they also need to be able to capture every conversation and every detail in a way that adds commercial value.”
aggregator Purple Circle Financial Services is celebrating as its loan settlement figures continue to show unprecedented growth, including a 51.06% increase in settlements in October, breaking its previous record in August. Purple Circle also saw a 52.8% increase in settlements from the previous financial year. “It hasn’t hurt our profile being awarded 2020 Boutique Aggregator of the Year, but seriously, this is a fantastic result considering the backdrop we are in,” said Purple Circle COO Frank Paratore. BOUTIQUE
“Finsure has always had a fresh and vibrant approach to delivering aggregation services. We wanted to leverage off that ethos and modernise our look”
1st mortgage, 2nd mortgage and caveat loans
All states and territories, including regional & rural areas
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Accessible Staff
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18/01/2021 8:19:28 AM
J00070
If you or your business continued to demonstrate exceptional customer service, professionalism, ethics, growth and innovation in 2020, then enter the
MFAA Excellence Awards for the chance to be recognised. INDIVIDUAL AWARDS / COMPANY AWARDS / LENDER AWARDS 24 AWARDS TO ENTER OR VOTE FOR
Entries in the MFAA Excellence Awards are judged based on merit, excellence and professionalism, not just volume and revenue, providing an unparalleled opportunity for brokers and businesses of all sizes and experience to be recognised.
TO FIND OUT MORE, ENTER OR NOMINATE VISIT:
awards.mfaa.com.au
Terms and conditions: Visit awards.mfaa.com.au for full terms and conditions. Entry in MFAA Excellence Awards, and voting in Lender Awards, is open to MFAA members only. The MFAA Excellence Awards are independently audited by Hall Chadwick.
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18/01/2021 8:19:38 AM 9/12/20 9:51 am
NEWS
TECHNOLOGY
LENDI, AUSSIE ENTER AGREEMENT TO MERGE home loan platform Lendi and Aussie Home Loans have entered into an agreement to merge, marrying the former’s digital technology with the latter’s “iconic brand” and significant broker and franchisee network. The aim is to “create a market leader in the Australian home loan market” while also delivering benefits for customers and brokers, including a greater choice of lenders. Completion of the transaction is subject to ACCC approval and other customary conditions and is expected to occur by mid-2021. ONLINE
MORE AUSTRALIANS OPEN TO USING DIGITAL BANKS
MONEYPLACE CHOOSES CLOUD-BASED TECH FOR CREDIT DECISIONS
study shows that COVID-19 has pushed more Australians (61%) to say now is a good time for disruptors to “shake things up” in the banking industry. The Way We Bank study from consultancy Nature found that more than a third of Australians are regularly reviewing the market for alternative financial products, paving the way for growth in the fintech space. More than 80% of Aussies aged under 55 are open to using a digital-only lender or neobank for at least one product.
Fintech personal lender MoneyPlace’s decision to use Experian’s new cloud-based decisioning platform to improve and automate customer decisions is paying dividends
A
“We needed an enterprise-grade decisioning solution that was agile and flexible enough to allow us to run multiple scorecards across multiple lenders” Stuart Stoyan CEO, MoneyPlace
8
lender currently averaging turnaround times – from receipt of application through to funding – of about four hours says it is powering its credit decisioning with Experian’s new cloud-native decisioning platform, PowerCurve Customer Acquisition. Personal lender MoneyPlace attributed its pursuit of the partnership to the desire to grow its white-labelled “lending as a service” solution, currently used by lenders such as Liberty Financial Group. “We needed an enterprise-grade decisioning solution that was agile and flexible enough to allow us to run multiple scorecards across multiple lenders, and Experian’s PowerCurve Customer Acquisition solution hit the A
mark,” said MoneyPlace CEO Stuart Stoyan. “In short, we want to help our customers better serve their consumers, and upgrading and automating our system with Experian was the first step.” Experian’s latest Global Insights research has confirmed the trend that quickly took shape at the start of the pandemic: using technology to improve and automate customer decisions has become a necessity for just about every major Australian industry, including financial services. The research showed that, in a pre-COVID-19 world, business and policy rules, along with decision management, were most commonly relied upon to assess customer creditworthiness. Now, however,
artificial intelligence has become the leading approach. “By combining customer data at the point of application with internal, fraud and multi-bureau credit data, our solution helps MoneyPlace make more informed decisions in real time based on a comprehensive view of the customer, while helping reduce their technology overheads,” said Experian Australia and New Zealand general manager of decisioning and analytics Mathew Demetriou. “Responsible lending continues to be an increasingly complex space for businesses to navigate, and it’s essential for lenders to maintain compliance while also ensuring a high level of customer service to remain competitive,” he said. “A cloud-native approach to decisioning enables lenders to service more customers responsibly and at speed.” MoneyPlace is the first to market in Australia with the PowerCurve Customer Acquisition solution.
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NEWS
MARKET NEW HOUSING APPROVALS CONTINUE TO RISE number of building approvals for private houses and renovations continued its upsurge for the fifth consecutive month in November, reaching a level not seen since December 1999, according to ABS figures. Approvals for private dwellings increased 6.1% in November, led by Queensland at 17%, followed by WA at 7.5%, SA at 2.8%, Victoria at 1.5% and NSW at 0.7%. ABS data showed that while approvals for private houses had risen 40% since June, those for dwellings that were not houses fell by 3.9%. THE
PROPERTY LISTINGS DROP IN DECEMBER listings fell in the
STRONG PROPERTY MARKET ON THE MARCH IN 2021 Government moves to contain the pandemic, alongside record-low interest rates, helped maintain a rising property market in 2020, and this looks set to continue housing market finished 2020 on a growth track, indicating a robust start to 2021, according to recent CoreLogic data. CoreLogic’s national home value index rose by 1% in December, the third consecutive month-on-month rise, following a 2.1% decline between April and September. Dwelling values finished the year 3% higher, with regional housing values climbing 6.9%, a capital gain rate more than three times higher than that of the combined capitals, where home values jumped 2%. CoreLogic research director Tim Lawless said that while 2020 was characterised by a slight drop in values due to COVID-19, there AUSTRALIA’S
was “unprecedented volatility in the transaction space”. Residential sales plummeted by 40% in March and April but finished the year almost 8% higher than the year before, as buyer numbers surged in the second half. “Housing values showed remarkable resilience, falling by only -2.1% before rebounding with strength throughout the final quarter of 2020.” Lawless said the market’s strong performance was not surprising given the “rapid and substantial monetary and fiscal response” from the federal and state governments. “Record-low interest rates played a key role in supporting housing market activity, along with a spectacular rise in consumer confidence as
PROPERTY Christmas season – a
COVID-related restrictions were lifted and forecasts for economic conditions turned out to be overly pessimistic.” Lawless said the government’s measures to curb virus transmission had been crucial to Australia’s economic and housing market resilience. CoreLogic data showed an increase in demand for lifestyle properties and lower-density housing options, especially in regional areas, as remote working became more prevalent. The total number of residential dwellings advertised for sale remained “persistently low” throughout 2020. Total listings peaked at the end of November with 165,000 properties for sale – 18% lower than in the same period of 2019 and 22% below the five-year average. There were also 21% fewer properties for sale at the end of last year than in 2019. “With homebuyers outnumbering sellers, most areas around the country represent a seller’s market,” Lawless said.
trend across all of Australia’s capital cities, SQM Research shows. The number of properties for sale declined 7.9% on a monthly basis in December and slid 5.8% from the same period last year. In Sydney, listings fell by 18.3%, while they dropped by 17% in Canberra and 11.5% in Melbourne. SQM Research managing director Louis Christopher said listings generally decreased towards the end of the year, but the market was unusually busy, reflecting a degree of catch-up from earlier property inspection restrictions.
“Record-low interest rates played a key role in supporting housing market activity, along with a spectacular rise in consumer confidence as COVID restrictions were lifted” Tim Lawless Research director, CoreLogic
AUSTRALIAN HOME VALUES STILL CLIMBING Source: CoreLogic
NATIONAL HOME VALUE INDEX RESULTS AS AT 31 DECEMBER 2020 Change in dwelling values City
10
Month
Quarter
Annual
Total return
Sydney
0.7%
1.3%
2.7%
5.3%
Median value $871,749
Melbourne
1.0%
1.5%
-1.3%
1.9%
$682,197
Brisbane
1.1%
2.1%
3.6%
7.6%
$521,686
Adelaide
1.1%
3.6%
5.9%
10.1%
$468,544
Perth
1.1%
2.8%
1.9%
6.4%
$471,310
Hobart
0.7%
3.2%
6.1%
11.4%
$513,552
Darwin
2.3%
5.5%
9.0%
15.0%
$416,183
Canberra
0.6%
3.5%
7.5%
12.5%
$678,765
Combined capitals
0.9%
1.8%
2.0%
5.3%
$651,983
Combined regional
1.6%
4.0%
6.9%
11.8%
$420,502
National
1.0%
2.3%
3.0%
6.6%
$574,872
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18/01/2021 8:21:23 AM
Mortgage Brokers – it’s time to decide! Are you a sheep or are you a salmon?
Purple Circle Financial Services
Australia’s broker-owned ‘Boutique Aggregator of the Year’! In this tumultuous season of aggregator takeovers and mergers it’s easy to become lost and lonely in the crowd when you’re suddenly part of a massive-amalgamated group! Were you asked for your vote? Were you consulted? Did you have any idea this was going to happen? The sheep mentality is this; Join the masses, follow the crowd, fully conform and lose your individuality. The salmon mentality is this; Swim upstream, fight the good fight, and then…spawn, reproduce, grow!
Purple Circle Financial Services will allow you to be the best salmon you can be... Independent and broker-owned (shares are earned by brokers after achieving agreed volume targets), Purple Circle operates by a culture of mutuality and co-operation. Brokers are empowered to vote and make a difference on important company decisions. The company’s mantra, ‘Empowering Brokers’ is far removed from major aggregators’ mantras of ‘Show me the money!’. You don’t have to follow the masses… Stop. Turn around. Claim your ground. Be the salmon and your true self with Purple
1300 366 406
Circle Financial Services.
enquiries@purplecfs.com.au
purplecfs.com.au
Australian Credit Licence No. 486112
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18/01/2021 8:21:37 AM
NEWS
INDUSTRY BODIES
SCHOOL BANKING PROGRAMS UNDER FIRE has released a “damning school banking report” concluding that providers couldn’t prove their programs help children develop long-term savings habits. Children were also exposed to sophisticated marketing tactics, with an undisclosed objective of customer acquisition. Ratecity.com.au said state governments needed to “kick banks out” of primary schools. “There are cash incentives for schools that sign students up … schools should be a safe environment where kids aren’t exposed to financial marketing,” said RateCity research director Sally Tindall. ASIC
ASIC SLAPS BROKER WITH FIVE-YEAR BAN has banned a Sydney mortgage broker from engaging in credit activities over the next five years due to several violations of the NCCP Act. ASIC found that Astna Shirtika Sahay, based in Mascot, had allowed her father, Shiv Prakash Sahay – who was permanently banned by ASIC in 2015 – to engage in credit activities using her and her company’s credit representative authority and ANZ accreditation. She has the right to appeal to the Administrative Appeals Tribunal. ASIC
“There are cash incentives for schools that sign students up to [banking programs]. Schools should be a safe environment where kids aren’t exposed to financial marketing” Sally Tindall Research director, RateCity.com.au
12
CELEBRATING DIVERSITY, INCLUSION IN FINANCE INDUSTRY The MFAA is urging brokers, lenders and BDMs to submit nominations for its 2021 Excellence Awards, which include two new categories MFAA is calling for entries for its 2021 Excellence Awards. These celebrate the work of the industry’s best brokers, businesses and industry professionals, recognising their customer service, professionalism, innovation and ethics across 24 categories at state and national levels. The awards portal at awards.mfaa.com.au is now open and accepting submissions, including for two new national awards that recognise outstanding MFAA member commitment to diversity and inclusion. To add to its efforts to enhance industry diversity and inclusiveness through its community initiatives, the MFAA says it wants to acknowledge those who “walk the talk” when it THE
comes to diversity and inclusion. The association’s Diversity Champion Award recognises individuals who show a willingness to advocate on behalf of minority groups to improve outcomes on equality, and who support company or industry initiatives that promote greater diversity and inclusion. The Diversity and Inclusion Program Award is for industry programs or initiatives that promote diversity and inclusion through awareness-raising, advocacy, training and development. “After a year that tested the resilience of our industry, it is terrific to be able to acknowledge the achievements of our members and the wonderful work they do helping
Australians realise their dreams,” said MFAA head of education Dan Walsh. “In addition to the many challenges of 2020, the past 12 months have also presented valuable opportunities for our industry, as our members were called upon like never before to provide assistance and support for their customers.” Walsh said that in rising to the challenges of 2020 “our members showed professionalism and commitment, while demonstrating the true value of their outstanding service both to customers and the economy more broadly”. “The recognition of both being an Excellence Award finalist or a winner is a real business builder,” he said. Submissions for the 2021 MFAA State Excellence Awards close on 9 February at 12pm AEDT, while submissions for the national awards close on 9 March at 12pm AEDT. Go to awards.mfaa.com.au to submit your nominations.
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18/01/2021 12:14:53 PM
FE AT URES
BUSINESS INSIGHT
FINDING THE RIGHT INGREDIENTS FOR SUCCESS Entrepreneur and corporate consultant Jessica Emily founded Moonshot You, a mindset and management consulting firm specialising in the performance of individuals and organisations. She explains how brokers can reach their targets in a tough business environment the pressure of reaching your targets is mounting, global pandemics are happening and everything we know has changed, how do you still achieve your targets each quarter? 2020 was a year of letting go what we thought we knew, how we liked to operate, and our former way of being. We had no choice but to let go of our old way of operating and what was familiar to us. For some in the industry this worked really well, and for others it didn’t. Now, with 2021 fresh on our doorsteps, we have a new slate with new opportunities. To stay ahead of the curve in 2021, we know we still need to reach our targets and be sharper than ever, regardless of whatever may come our way. So, how can you thrive in an environment that isn’t geared for your success? What would be the winning ingredient for success? Throughout 2020, I worked with a number of mortgage and finance brokers to help them shift their thinking and reframe their approach to business in order to thrive and reach their targets. One of the mortgage brokers I worked with was Isabelle, an enthusiastic, young and driven broker based in Texas, US. Isabelle had set her benchmark very high at the start of the year, and while she was a good performer, she found she just wasn’t reaching her targets. Now, as astute sales and business operators know, you can never confuse activity with accomplishment. The results will speak for themselves, especially when the time comes to pay the bills. The biggest indicator that Isabelle needed to try a different approach was when, after a particularly challenging month, she found herself aggressively letting loose on WHEN
her loan officers, threatening her assistant and disrupting her home life by taking her stress out on her kids. We’ve all been there when the pressure is mounting, but this is often an indication that something’s not working as well as it could be. In working with Isabelle, we found that there were many moving parts to her role, as a lot of the processes, procedures and approvals required the involvement of other people, leaving very little control in her hands. The desire to control everything, or as much as possible, is often what can send us crazy when things don’t go according to plan. This was the most common theme I noticed when working with people last year: their desire to control as much as possible. In 2020, what we thought we could control was essentially taken away from us, and we had no choice but to find another way to operate. The winning secret to reaching your targets is to focus on what you
Jessica Emily, founder, Moonshot You
survivor Victor Frankl describes this very well in his book Man’s Search for Meaning. He states that there is time between the stimulus (what triggers us) and our response.
Regardless of what’s happening around you, it’s imperative to stay focused on what’s within your control can control. Regardless of what’s happening around you, this is imperative. Doing so will give you a sharp, laser-like focus on what to do next. We still have to pay our bills, make our targets and get new clients, but what happens when we try to control everything but realise that the only thing we can control is ourselves? That’s right: our thoughts, reactions and emotions are all within our control. Not anyone else’s. Holocaust
That time in between is entirely within our control; the choice is ours. By placing your attention and effort on what you can control, you can make an even bigger difference and determine the outcome. Working with Isabelle over the course of six months, I focused on helping her shift her thinking to reframe what she could control, regardless of the external chaos. The results she achieved were amazing. She grew her business by
67% in just three months, created better relationships with her key stakeholders, and as a result managed to secure faster processing times for her loans because of her relationships. She now has the personal awareness needed to understand when she might be acting or thinking in a way that is not within her control. She simply says to herself: “If it’s not within your control, why bother worrying about it?” Isabelle completely recreated her relationship with control by establishing the difference between what was within her control and what was outside of it. We created a clear understanding of how to let go of things that we want to control but can’t, and that managing the client’s expectations is the most important thing. The next time you are feeling the pressure, stop, take a minute, and think: what can I control in this situation? AB www.brokernews.com.au
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FE AT URES
SPECIAL REPORT
LIBERTY RELISHES FREEDOM TO GROW
After a hectic 2020 featuring the coronavirus, new products and a public listing, non-bank lender Liberty is set to build on its successes over the coming year
LIBERTY: THE NUMBERS
More than 600,000 customers helped by Liberty
More than $30bn in funds advanced
23 years in operation
NPS score of 46
14
no doubt 2020 was a momentous year for Liberty Financial Group. Not only did the non-bank lender move quickly to help customers who were struggling through COVID-19, but it also launched two new business lending products for SMEs and created a new position of national sales manager to further support its broker channel. In addition, Liberty rolled out digital verification of identity options to improve the customer experience and help brokers keep up with increased demand. But the biggest development came on 15 December when Liberty listed on the Australian Stock Exchange at a share price of $6, with a market capitalisation of about $2bn. Since then, the price has risen steadily, with Liberty shares edging towards $8 at the time of publication. Building on solid loan growth and its partnership with fintech personal loans specialist MoneyPlace, Liberty is confident about further gains in 2021. Reflecting on 2020, CEO James Boyle says Liberty demonstrated its reliability and strength as well as its unwavering dedication to the financial wellbeing of its business partners and customers. “This year has highlighted the importance of connections and community,” Boyle says. “I’m grateful for the community of business partners and Liberty team members. Our partners and our team have worked tirelessly to support customers through the challenges and opportunities this year has brought. “We have been true to our purpose of helping people get and stay financial.” THERE’S
From the rapid implementation of new technology, such as digital VOI, to the launch of bespoke solutions for SMEs, Liberty has “gone the extra mile to ensure smooth continuity of service to brokers and customers alike”, Boyle says. Melbourne-based Liberty offers home, car, business, SMSF and personal loans, and has advanced more than $30bn in funds to more than 600,000 customers. When it comes to its IPO, Boyle says Liberty has always been guided by what is best for its business partners and customers. “If we get this right, the rest will take care of itself. “Our listing on the Australian Stock Exchange is no different,
with the same approach that makes us one of Australia’s top lenders,” he says. “I’m excited about the new opportunities that lie ahead and am pleased to invite and welcome any new shareholders to join us on this meaningful journey.” Reflecting on Liberty’s growth over the past 23 years to become Australia’s only non-bank with an investment-grade rating, Boyle says the focus remains on “helping people from all walks of life to get financial”, whether they are prime, near prime or custom borrowers. “Our flexible approach to lending has led us to help more than 600,000 customers. “From our roots in residential
“Even though we know there will continue to be ups and downs, brokers can always count on Liberty doing its best” in that Liberty’s access to equity capital markets will expand and strengthen our ability to serve brokers and customers. “Combined with our strong debt markets capabilities, we are well positioned to advance our agenda of industry innovation and support.” Boyle says that as a listed company Liberty will retain all the unique and free-thinking aspects of its offering that brokers have come to love and expect – personalised service, access to underwriters and swift turnaround times. “Our new shareholders join us with the confidence that we will continue to do business as usual,
mortgages, we’ve grown organically, innovating to meet the needs of customers. Today, we offer a broad range of solutions for a wide range of customers, including those who are not well served by traditional financial institutions.” Liberty believes in providing personalised service, with a team based in Australia to help more Australians with their needs. The Liberty Financial Group also extends to New Zealand, with local advisers and service staff available to support Kiwi customers. Boyle says Liberty has expanded over the years beyond residential mortgages into adjacent markets,
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In partnership with
including motor finance, commercial mortgages, personal loans, business loans, SMSF loans, broking services and general insurance. “Our consistent organic growth has been bolstered by strategic partnerships and acquisitions, including nMB, ALI and MoneyPlace in the past three years.” As Liberty has expanded, Boyle says, so too has its ability to support business partners with a wider range of solutions and services. Liberty’s “consistently strong” financial performance, which saw it continue to write loans through the GFC and the peak of the pandemic, is due to the lender’s customer focus,
the first non-bank lender to sign up to the Financial Inclusion Action Plan (FIAP). The FIAP program, says Boyle, includes an agreed set of actions to support financial inclusion, wellbeing and resilience in Australia, and aligns closely with Liberty’s mission to help more people “get financial”. “Just as there is no one-size-fits-all approach to our loan solutions, a diverse workforce and partnerships with charity and community organisations help us better place ourselves in the customer’s shoes.” Liberty has also focused on small business customers, being one of the first non-bank lenders to join
“Our consistent organic growth has been bolstered by strategic partnerships and acquisitions, including nMB, ALI and MoneyPlace in the past three years” diversified business and capital management expertise. “We’ve maintained high levels of customer satisfaction, with a Net Promoter Score of 46. “We’ve also consistently held the capital generated by the business on balance sheet to make sure we are a sustainable business that can help business partners and customers through the cycle,” Boyle says. “That’s reflected by our investment-grade rating. “Even though we know there will continue to be ups and downs, brokers can always count on Liberty doing its best.” Diversification and providing flexible solutions for its customers are important at Liberty. “Right from day one, we’ve worked to break down barriers, support financial inclusion and create even more opportunities through diversification,” Boyle says. “We’ve taken steps to broaden our solutions to help more customers. So now we have one of the most diverse and inclusive financial product ranges in the market.” To provide even more support for its increased salesforce and team of BDMs, Boyle says Liberty also appointed a new national sales manager, Sof Tsialtas. Earlier in 2020, Liberty became
the federal government’s SME Guarantee Scheme by creating its Business Care solution. This has been extended with Liberty’s continued involvement in phase two of the scheme. Business Care provides an unsecured term loan of up to $250,000 for a maximum of three years, with the option to defer repayments for the first six months with interest capitalised. The SME Guarantee Scheme aims to help SMEs get through the impact of the pandemic by supporting up to $40bn worth of lending to SMEs, including sole traders and not-for-profits. “The SME Guarantee Scheme has provided much-needed support for many Australian businesses who needed to quickly adapt to changes in the market,” Boyle says. “We witnessed how vital this support has been to many local businesses.” Liberty also launched two of its own new business lending solutions for SMEs: Liberty Access and Liberty Mint. Liberty Access offers a flexible business line of credit up to $1m, while Liberty Mint provides secured business loans of up to $3m. “Adding to Liberty’s already strong suite of business lending solutions, these products ensure that Liberty is equipped to provide SMEs
James Boyle, CEO, Liberty
with competitive solutions for a variety of needs.” Many SMEs have been hit hard by the pandemic, Boyle says, with cash flow concerns a major issue. “We know that many SME borrowers need the help of a specialist lender that offers flexible support. We are supporting an increasing number of brokers to find new ways to help SME customers access the funds they need to rebuild and thrive.” Liberty also remains one of the few lenders to provide loans to self-managed super funds. Boyle says Liberty continues to see the value to customers and brokers in offering SMSF lending solutions. “As an area of lending that has been reasonably resilient amid the market fluctuations and challenges
of 2020, we will continue to support both brokers and borrowers in this space.” SMSF lending also provides a significant opportunity to diversify and strengthen a broker’s business, and Liberty is helping brokers and business partners add this valuable skill to their loan offering. The best interests duty came into effect on 1 January, requiring mortgage brokers to act in the bests interests of their customers. Liberty’s BDM team has been working closely with brokers to help them prepare for the new regulations and understand their responsibilities. Boyle says BID and the related ban on conflicted remuneration are significant changes, and there is a lot of information about the new rules available to brokers. www.brokernews.com.au
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A FREE-THINKING APPROACH
First non-bank to sign up to the Financial Inclusion Action Plan (FIAP) program
B-Corporation certified
Endorsed by Work180 for supporting women’s careers
James Boyle, CEO, Liberty
“We’re dedicated to providing the compliance support needed to help brokers meet their new obligations,” he says. When talking to brokers about Liberty’s lending solutions, Boyle says customers also want to know more about the interests of the businesses they are dealing with. “When a broker talks to a customer about Liberty products, they can also inform them of our turnaround times, custom approach to lending solutions, and our social responsibilities. “We know that customers want to work with companies who are serious about their wider corporate responsibilities, so our business partners can be confident with Liberty that they are working with a lender dedicated to its role in the broader community,” says Boyle. “Last year we became the first non-bank in Australia to become a B Corporation. B Corporations are businesses that commit to meet high standards of social and environmental performance along with their financial objectives,” he explains. Boyle says Liberty has supported the improvement of financial inclusion among Australians for 23 years. “We have pledged to continue to strive for improvements in areas such as sustainability. 16
“We’re committed to pursue not only an economic but also a socially responsible agenda – for our customers, our employees and our planet. Liberty’s accreditation as a certified B Corporation is consistent with these principles.” Looking to the year ahead, Boyle says brokers can certainly expect to hear more from and about Liberty.
awareness are also intended to help Liberty’s business partners. “We hope that this brand awareness boost will mean less time spent by brokers explaining who we are, and more time focusing on customers’ finance needs.” In 2021, Boyle says brokers can also expect to see continuing strong performance by personal loans
“We are supporting an increasing number of brokers to find new ways to help SME customers access the funds they need” “Just as we have done this year, investment in our brand and profile will continue as we expand our sponsorship and social media presence.” The Melbourne Renegades principal partnership Liberty signed on to for the 20/21 WBBL and BBL cricket season “was exciting for us, helping to strengthen our brand with a club whose values are very closely aligned”. “By doing so, we hope to connect with the many customers and small businesses who we can help with our free-thinking approach.” Efforts to increase consumer
partner MoneyPlace. “Entering the third party distribution channel for the first time in 2020, we’ve seen an incredible 82% increase in settlements in the past six months alone. “MoneyPlace has grown during the pandemic, bringing on more BDMs and lending specialists. “The bottom line is that we’re incredibly grateful for the support of our business partners, and we will continue to invest in the network that helps create shared success.” Boyle believes the federal government has done a world-class job in managing the health and
50:50 gender balance in team leadership roles
Commitment to LGBTQIA+ inclusion led by Liberty’s Pride Network
economic consequences of the global pandemic. “So provided the impact of the vaccine and our trade relations with China are positive, we think there’s a good basis for us to be optimistic about the Australian economy in 2021,” he says. “All that said, we appreciate there are many small businesses that have been and are continuing to be radically impacted by the pandemic, and we are hopeful that they will start to see customers return and business improve in line with these trends. “As for Liberty, we will continue as we have for 23 years – to focus on providing a broad range of innovative finance solutions so that our business partners can help more customers get and stay financial.” AB
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NE WS ANALYSIS
SHAKING UP STAMP DUTY
The NSW government wants to make homeownership more achievable by giving buyers the option to pay an annual property tax instead of stamp duty. We asked brokers and real estate experts for their thoughts
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Property tax – yes or no? Rowlands says the proposed changes to stamp duty would be a huge reform and would raise a lot of
as either way you will still pay for stamp duty – it’s not abolished. “Short-term holding will benefit from it as it alleviates an upfront cost,
“$34,000 is a lot of money for first-time buyers, so this would be removing a barrier to entering the property market” Trent Lee, CEO and founder, Mates Rates Mortgage Brokers questions as to the benefits. “Any tax reform has pros and cons – always,” she says. “I don’t know that it really will have a huge impact,
but it doesn’t negate the cost.” Rowlands says a longer delay in paying stamp duty will lead to a more expensive duty being paid if it goes the
full length of a long-term ownership. “I see it as a flawed system as it still isn’t clear how it would end up if multiple buyers continue to defer the payment. I don’t have a firm yes or no opinion made up as yet.” There are also questions about debt recovery. “How will they manage debt recovery if people just can’t afford it year-on-year? How will it be charged and debited? What penalties would apply if they can’t then pay it annually?” Rowland says. Lee says it will remove the need for buyers to pay stamp duty upfront, which averages about $34,000 in NSW – and “that is a lot of money to raise for first-time buyers in particular, so this would be removing a barrier for them to enter the property market”.
YEARS TO SAVE A 20% DEPOSIT ON AVERAGE NSW PROPERTY
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Approx. years to save deposit
no doubt that stamp duty is a big financial barrier to homeownership. According to the NSW Treasury, it can take 2.5 years for an average worker to save up enough money to cover stamp duty, adding $34,000 to the cost of buying an average home. NSW Treasury statistics also reveal that, since 1990, while average earnings in NSW have trebled and average house prices have increased five times, average stamp duty on dwellings has increased more than seven times. After many years of debate and numerous reports calling for change, the NSW government, led by Treasurer Dominic Perrottet, has decided to act, proposing an annual property tax as an alternative to upfront stamp duty. Property buyers will be given a choice: pay an annual property tax instead of stamp duty (and land tax where applicable), or pay one-off stamp duty. The annual property tax would be based on land value – a fixed amount plus a rate applied to the unimproved land value of an individual property, similar to council rates. Stamp duty concessions for first home buyers could be replaced with a grant of up to $25,000. The government has released a consultation paper and is seeking public feedback by 15 March. Australian Broker sought comment on the reforms from Katrina Rowlands, managing director of Wollongong-based Mortgage Success; Trent Lee, CEO and founder of Mates Rates Mortgage Brokers in Gosford; well-known real estate commentator and trainer Tom Panos, and Real Estate Institute of Australia CEO Anna Neelagama. THERE’S
16 14 12 10 8 6 4 2 0
1 1 1 90 9 92 93 94 95 96 97 98 99 00 0 02 03 04 05 06 07 08 09 10 01 12 13 14 15 16 17 18 19 20 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 2 20 20 20 20 20 20 20 20 20
Deposit
Deposit plus stamp duty Source: NSW Treasury consultation paper: Buying in NSW, Building a Future, November 2020
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they benefit from a proposed grant of $25,000, Rowlands says. Neelagama says the latest REIA Housing Affordability Report found that Australia recorded a 10-year high in affordability for first home buyers due to low interest rates and government stimulus, but spreading the tax out should further incentivise the market. “The data shows that providing fairer options works to keep the housing market stable rather than causing prices to inflate heavily.” From left: Katrina Rowlands, managing director, Mortgage Success; Trent Lee, CEO and founder, Mates Rates Mortgage Brokers; REIA CEO Anna Neelagama, and Tom Panos, real estate coach and commentator
He says the reform could also help stimulate the market overall by encouraging those looking to upgrade or downsize to another property to do so, as they won’t have to factor in the cost of stamp duty. Panos says upfront stamp duty is a major prohibitor because it stops some potential first home buyers from purchasing or delays them from entering the market. “Anything’s that going to take away that friction point is going to be a very positive move for the whole industry, and that industry is real estate agents, mortgage brokers and all the associated services involved when people buy and sell property,” he says. “Quite often I’m auctioning properties on the weekend and people are saying to me, ‘I still have to pay $150,000 for the stamp duty’, so it’s a sizeable amount,” Panos says. “It doesn’t matter how affluent you are or how much disposable income you have, $150,000 after paying tax – you’ve got to earn a big salary to pay that.” Neelagama says efforts to reform stamp duty are welcomed, but any net benefits won’t occur unless they are applied across the entire country. “Taxes are one of the factors that determine investment in housing and thus housing supply and housing affordability,” she says. “The changes to tax on stamp duty will bring economic and social benefits, including assisting affordability by reducing the initial transaction cost of a property and allowing those who need it most to opt for a smaller annual tax. “While providing the option to spread out the tax is welcomed, the taxes themselves remain high.”
House prices Lee says an increase in property prices is a potential outcome of the reform, but house prices have already been rising during the COVID-19 pandemic. “Any changes the government makes, whether it be an exemption,
you will still need to factor putting that amount aside weekly or monthly to cover the annual cost. It may factor more in the first home buyer range of property than the second or third … those that have entered the market for a second or third time may be in more of a position to pay
“[The reform] may encourage shorterterm holds as it lessens the burden of moving, and transaction numbers may increase for the broker industry” Katrina Rowlands, managing director, Mortgage Success bonus or in this case a deferral or deferment of stamp duty, will provide an additional catalyst to price increases,” he says. “There could also be an impact on the rental market as more tenants are able to purchase their homes rather than rent, which could see a negative impact on rental income.” Panos says people will move more frequently because they will have a lower barrier to selling and buying, but it is not clear if the property tax will affect house prices because there are so many variables. “Property tax is not the biggest driver – the biggest driving factor is interest rates.” He adds that property listings and volumes are way down, and this has caused price growth. Rowlands says the property tax is just a different way of paying stamp duty. “I don’t see this as a real game changer in values, to be honest, as
it upfront and be done with it.” First home buyers may be incentivised to enter the market if the tax is an annual small payment and
Housing supply; downsizing Panos says the tax will bring about a more fluid property market. “It’s another barrier which is slightly removed which is going to allow people to make decisions to move,” he says. “You might find people instead of doing renovations saying let’s not renovate, let’s just actually upgrade.” Panos says his biggest issue with the property tax is getting clarity as to when it will come in and what exactly it will entail. “Because a lot of people often procrastinate. They’ll hold off and say, I’ll wait to when the legislation goes in. The anticipation of it actually stops people making decisions.” Lee says there is still a good supply of new housing coming onto the market thanks to stimulus measures such as HomeBuilder. “I don’t think downsizing decisions are driven by the cost of stamp duty,” he says. Neelagama believes the property tax will benefit first-time owneroccupiers, who can delay an upfront payment while also stimulating the
OWNER-OCCUPIED SHARE OF NSW HOMES 72% 70%
70%
68% 66% 64%
64%
62% 60% 1 95 96 97 98 00 -0 03 04 06 08 10 –12 –14 –16 –18 4– 95– 96– 97– 99- 00 02– 03– 05– 07– 09– 011 13 15 017 9 2 20 20 2 19 19 19 19 19 20 20 20 20 20 20 Source: NSW Treasury consultation paper: Buying in NSW, Building a Future, November 2020
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market, particularly those wanting to downsize but who have been discouraged by large stamp duty taxes. But Rowlands is not so convinced the tax will lead to more downsizing, because she says people in that situation usually have a reason to lessen their financial burden and have planned on the equity to buy the home outright or at a lower lending end amount. “So to then create another annual fee for the stamp duty rather than complete the payment at the changeover seems to contradict why most people downsize,” she says. “They downsize to remove financial commitment as a rule.” Benefit for brokers Brokers, says Lee, will always benefit from more property sales, and making it easier to purchase property will likely increase sales. “The ongoing property tax will need to be factored into the loan servicing, which the brokers should be taking into consideration when assisting their clients.” The reforms may assist the first home buyer to engage sooner in the market and therefore boost the housing market, Rowlands says. “New buyers enter and second home buyers move on and out to new areas or up in price. This also will always then help brokers as the market expands. It may encourage shorter-term holds as it lessens the burden of moving in some ways and, as such, transaction numbers may increase for the broker industry.” 20
Should NSW abolish stamp duty? It sounds fantastic when you hear it, says Panos. “That’s like saying, let’s get rid of tax. But there’s a model behind it. Where would you get the money to make up for it? There’s a whole ecosystem – people pay a tax for other services around the country.” Rowlands questions how the NSW government could remove stamp duty when it has a $16bn deficit. “And if they do, they will just replace it with another … it’s idealistic to think that, after the year we have had and the government spend to help us all survive, that now they can cut taxes.” Lee says the removal of stamp duty is unlikely, given the COVID-induced economic challenges at state and national levels.
and should be replaced with a more efficient way to raise revenue,” she says. “Property transactions across the board would no doubt improve with the removal of inefficient housing taxes.” Rowlands says her initial answer is no – each state needs to set its own recovery plan and identify the areas that need the most attention. “This is a larger question that covers one policy of tax reform.” Lee believes there is no one-sizefits-all option. “All the states and territories have vastly different property markets, and whilst state governments rely upon stamp duty as revenue to fund infrastructure projects, the need to regulate their revenue streams to do that will need to remain a local decision,” he says. AB
“They still require the revenue to pay for infrastructure, public transport and schools, etc,” he says. Offering the option of stamp duty or property tax would give buyers a choice, Lee says. “They may feel they have more financial freedom long-term by paying upfront stamp duty. But the property tax option gives those struggling to save for a deposit a pathway into the property market.” Should the property tax be rolled out nationally? Neelagama says housing is one of the most heavily taxed sectors of the Australian economy, so national reforms remain much-needed. “On a national level, stamp duty on conveyances is inconsistent with the needs of a modern tax system
STAMP DUTY, PROPERTY PRICES AND EARNINGS OVER TIME 800 700 600 500 400 300 200 100 0 0
9 19
92 19
4
9 19
6
9 19
Average duty
8
9 19
0
0 20
02 20
4
0 20
6
0 20
8
0 20
Average property price
10 20
2
1 20
14 20
16 20
8
1 20
20 20
Average earnings
Source: NSW Treasury consultation paper: Buying in NSW, Building a Future, Nov 2020
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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 Arthurmac & Co senior mortgage consultant Michael Hughson used his many years of experience in specialist lending to assist a client who had gone through a separation and needed to consolidate debts, one of which was incurred by her ex-husband THE FACTS
Client Self-employed female with two children and recently separated
Loan size and term $455,000 over 40 years
Goal Location To pay off existing Philip Island, home loan, business Victoria debts and bad debts incurred by ex-husband
Lender Pepper Money
Aggregator Connective
business increased and showed strong growth. Given the time needed for the resolution of the caveat, the original application and valuation expired. Once the caveat payout negotiation was resolved, our client was then able to provide updated business statements showing the ongoing and continuance of income, along with a full new application being submitted. Working with Pepper Money and the client, we were able to get the loan settled, and the client was back to one, more manageable repayment. She was very grateful and appreciated all of the assistance. THE TAKEAWAYS
servicing the required loan amount over a traditional loan term of 30 years. However, because the client was only 30 years old, Pepper Money was able to consider her for a loan term of over 40 years. This enabled the repayments to be lower and allowed the client to borrow sufficiently to consolidate all of her debts into one. Our client is self-employed as a hairdresser and also runs an online business distributing goods from her hairdressing services. The loan was formally approved and ready for
THE SCENARIO
This was an existing client of Arthurmac who we had assisted previously via our private mortgage fund. We had originally assisted the client with a second mortgage of $100,000 to clear an earlier business debt. This was then reduced to $40,000 via a debt reduction with the assistance of the client’s parents. The first mortgage of $320,000 remained. The client had just gone through a messy separation from her husband that had caused her some stress, and she came back to us as she needed to get her finances back in order and to consolidate her debts into one loan. Our client was looking to consolidate her existing first mortgage, the second mortgage, another personal loan and another caveat that was the result of her ex-husband not paying a debt. (Our client was actually unaware of this debt being there until a title search was done, and then had to arrange additional borrowings to clear this facility as part of the settlement.)
We are a very solution-driven business, ensuring there is a benefit to the borrower from each loan we do
THE SOLUTION
Having worked on the specialist lending side of things for almost 20 years, we were able to gather all of the required information and present to the lender the benefits of the new loan to the client. Given that the client was not required to be registered for GST when the original application was undertaken, the income declared from her self-employed businesses was not meeting her requirements in relation to
At Arthurmac, we understand that each deal and client is different, and it is about obtaining all of the information from the client and sourcing the most appropriate solution and lender to meet each client’s individual situation. We are a very solution-driven business, ensuring there is a benefit to the borrower from each loan we do, whether it be a home loan, car loan or private mortgage facility. As silly as it sounds, during an initial discussion/consultation we always request the client to be upfront and tell us everything, as this will enable the best outcome for the client. With ongoing and
Michael Hughson Senior mortgage consultant, Arthurmac & Co
settlement when the caveat was discovered, which meant the settlement required removal of the caveat. The client was in discussion with her solicitors, and the caveat then went from $30,000 owing to $90,000 (including fees and penalty interest) required to pay it out, which meant we had a shortfall and were not able to settle. She then had to go, via her solicitors, to arrange and negotiate this back down to the original amount of $30,000. It was during this period of negotiations that COVID-19 hit and the client’s hairdressing business slowed down. However, being in a regional area, she was still able to work under certain criteria, and her online distribution
open communication with this client during the process, a successful outcome was achieved. This honesty and openness allows us to provide everything upfront to the lender and makes for a smoother assessment of the application with no, or not as many, hidden surprises. This loan also showed the power of perseverance, as the whole process took about nine months from the commencement of the application to settlement. Given the timing of this application, our follow-up process was very important, as well as obtaining regular updates from the client so we could provide this information back to the lender and solicitors. AB www.brokernews.com.au
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YE AR AHE AD
BRIGHTER 2021 TO BRING GROWTH, OPPORTUNITY With 2020 now in the rear-view mirror, what will 2021 bring for the finance industry? Australian Broker asked brokers Tracy Kearey and Gerard Tiffen and Thinktank CEO Jonathan Street for their predictions
year left many people across the country reeling from coronavirus lockdowns, job losses and Australia’s first recession in nearly 30 years. Despite this, the nation has done remarkably well compared to the US and UK when it comes to avoiding high rates of COVID-19 transmission and deaths. The economy is starting to bounce back, with mortgage deferrals falling and job advertisements on the rise. The property market is thriving; prices are booming in the regions LAST
“With consumer confidence bouncing back and interest rates likely to remain low, now is a great time to borrow” Gerard Tiffen, managing director, Tiffen & Co and increases of up to 12% are predicted for the capital cities this year. Brokers and lenders are
also optimistic about 2021. Tracy Kearey is the managing director of Brisbane-based brokerage
CHANGE IN DWELLING VALUES ACROSS AUSTRALIA
Dec 2020 Sydney Melbourne Brisbane Adelaide Perth Hobart Darwin Canberra Regional NSW Regional Vic Regional Qld Regional SA Regional WA Regional Tas Regional NT Combined capitals Combined regionals Australia
0.7% 1.0% 1.1% 1.1% 1.1% 0.7% 2.3% 0.6% 1.7% 1.8% 1.4% 2.0% 1.2% 2.1% 3.2% 0.9% 1.6% 1.0%
Oct–Dec 2020 1.3% 1.5% 2.1% 3.6% 2.8%
Year to Dec 2020 2.7% -1.3% 3.6% 5.9% 1.9% 6.1% 9.0%
3.2% 5.5%
7.5%
3.5% 4.3%
8.3% 5.6% 6.9% 8.1%
3.7% 4.1% 2.6% 2.5% 4.4% 4.9% 1.8% 4.0% 2.3%
-3.7% 11.9% 3.5% 2.0% 6.9% 3.0% Source: CoreLogic
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Home Loan Connexion. She leads a team of more than 30 brokers offering services across all forms of finance, including property, personal, commercial and equipment. Kearey says 2021 will bring stability, opportunity and growth for the broking industry. “Technology and further automation will improve the service offered by brokers, which will in turn improve the customer experience, reducing time and resources for both the customer and broker,” she says. “There is an opportunity for the broker channel to assist a broader range of clients due to access to new lenders and products.” With lenders changing their policies very quickly in a “foreverchanging market”, Kearey says it is very difficult for consumers to deal directly with lenders. “If I were a borrower I would not apply for finance on my own, based on policy and understanding. You need to have an expert on your side when you are borrowing money.” Brokers recorded their highest market share ever of residential mortgages in the July to September 2020 quarter, at 60.1%. “We got so much momentum from the back end of last year,” Kearey says. “If it continues, I think [a higher share] will be sooner rather than later; we may see it in the first quarter. We could get to 70%, and it may go higher. We’ve now got BID, we’ve got open banking and we’ve got a lot more technology.” Award-winning Canberra broker Gerard Tiffen agrees that brokers will gain a greater market share in 2021. He is the managing director of Tiffen & Co, leading a team of 13 staff, with five brokers assisting clients with residential and
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Tracy Kearey, managing director, Home Loan Connexion
commercial loans, including first home buyers and investors. “I think customers in particular will continue to vote with their feet when it comes to us,” Tiffen says. “They want real impartial advice from successful brokers who will be around for years to come and care about them and outcomes. As long as we receive support from the lenders, growth is still achievable.” Tiffen feels confident and excited about the year ahead. “With consumer confidence bouncing back and interest rates low, and likely to remain low for a sustained period, now is a great time to borrow. There is a lot of state and federal government focus on stimulating the housing sector, and lenders seem willing to lend again. “I’m hoping the back office of a few lenders improves, as turnaround times have been very difficult to manage at times through 2020. I expect this will happen as resources are reallocated. It’s important that the borrower experience is similar, irrespective of whether a loan is presented to a lender through a branch or by a broker.” Kearey says an increasing public awareness of brokers has been driven by the royal commission, marketing from industry groups, as well as word-of-mouth client referrals. “The perception in the market has changed about who we are and what we offer. The level of professionalism has increased – we are seen as an expert in home lending for any type of property and asset,” she says. Tiffen says 2021 will be about “bedding in of some of the lessons learned from the past 12 months”. “The use of tech, particularly being
able to meet with customers using a combination of online and in-person, makes accessibility a lot easier than previously thought,” he says. “For the first time in Tiffen & Co’s 22-year journey, the customer mindset changed in 2020 from ‘I need to see you in person’ to ‘I just need to see you’. “We now conduct many customer interviews online. It’s a better experience for many borrowers, particularly those who we already have a relationship with. The ability to
Gerard Tiffen, managing director, Tiffen & Co
“It’s a delicate balance,” Kearey says. “Brokers will continue to gain market share as more banks close branches and borrowers look for a more personalised and tailored approach when it comes to their financial affairs.” Like Tiffen, Kearey also believes advances in technology will give brokers an advantage. “The reduction in paperwork that comes with positive credit reporting and open banking will certainly make it easier for customers to refinance
“There is an opportunity for the broker channel to assist a broader range of clients due to access to new lenders and products” Tracy Kearey, managing director, Home Loan Connexion find half or a full hour in the diary is easier if you can remove travel time.” Tiffen says technology is moving rapidly. “I am hoping lenders and regulators move in line with the tech and enable brokers and borrowers to tap into the new ways of doing business.” Australia’s economic recovery is difficult to predict, Kearey says, but she believes that the nation is in a great position globally. “We need to remember that the recession we have experienced was created by a health crisis, not a financial crisis.” But 31 March will be a crucial date. This is when JobKeeper payments, the JobSeeker supplement and HomeBuilder are all due to end, and it could hurt the economy.
when there are savings to be had.” Kearey says she works with a lot of property investors who haven’t been affected by COVID. “There are certainly people out there who have good employment, have probably got more savings in the bank now because they’re not travelling and spending like they used to, so they are investing in property.” Regulation is a key focus in 2021 – the best interests duty came into force on 1 January. But Tiffen says BID won’t have much impact on his business. “The requirements of BID reflect the way we approach every customer engagement today,” he says. “We seek to understand their needs, look at the available options and, if a first-time
borrower, explain how everything works and their obligations when borrowing money. “I’m hopeful – and expect – the winding back of responsible lending provisions gets through Parliament. The level of scrutiny required doesn’t reflect the reality at the moment. I know from my customer experiences they understand spending habits change when you take on new debt.” Kearey says the only significant change for brokers with BID “is the requirement to keep better records – most brokers were already acting in the best interest of the customer anyway”. “The changes to the responsible lending obligations and in particular the requirement to verify actual living expenses will make doing business easier,” she says. “Conflicted remuneration such as the volume bonus were removed by the Combined Industry Forum some time ago now.” Summing up the year ahead, Kearey says: “If it’s anything like the year just gone for loan writing, and with the cash rate set to remain at an all-time low for the next few years, I am extremely optimistic about the prospects.” But she believes continued government stimulus remains the key to consumer confidence and how the property market tracks, while low population and wage growth and high unemployment need to be closely monitored. “If we can keep COVID-19 at bay, implement a successful vaccination program and see Australia’s borders open to international visitors, our chances of getting back to some form of normality and achieving stability in our property market will be greater.” www.brokernews.com.au
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FE AT URES
Tiffen says coming off the back of a “very unusual 2020”, a sense of normal will return with a “very active buying and borrowing market”. “It’s good to see the amendments to responsible lending legislation are already before Parliament,” he says. “The current level of scrutiny is not warranted. It delays the process and, at times, precludes good borrowers from obtaining an approval. “With lending regulations back at a more reasonable level, consumer confidence high and interest rates low, I’m expecting more records for
will be the continued rapid digitisation of systems by all banks. “This will include having to manage an increased level of rigour via BID, and reliance upon electronic compliance and documentation systems,” Street says. Automation will enable quicker lodgement and turnaround times, and lenders will be able to spend more time with brokers and their clients to offer the best financial solutions, he says. “It will be important to balance digitisation with the human side of lending to help effectively
“Non-bank lenders are well positioned for growth, given our strong emphasis on ingenuity and a service proposition well balanced between borrowers and brokers” Jonathan Street, CEO, Thinktank Tiffen & Co in 2021. Can’t wait! Non-bank lender Thinktank is a specialist commercial, residential and SMSF property finance provider with more than 100 staff across Sydney, Melbourne and Brisbane. Thinktank CEO Jonathan Street says he has an optimistic view of lending in 2021. “This is based on continued growth through the presence of new lending opportunities supporting borrower needs across the financing needs of expansion, rationalisation and restructuring,” says Street. “One of the key sectors of activity will be in the non-bank space, with a greater focus on near prime residential, commercial and business lending.” This, he says, will lead to increasing competition between existing players and new entrants, with the cost of capital low and availability high. He believes another area of focus
guide borrowers, while the role of a broker in facilitating this cannot be underestimated.” Changes to responsible lending won’t necessarily lead to an easing in the supply of credit, Street says, but it should make it faster for consumers to access finance, with an improved application experience and approval times. While a stronger economy and favourable property market will provide more opportunities for lenders, market share will be driven by “service, innovative products, insights and genuinely understanding a broker’s and borrower’s business., he says. “For this reason, non-bank lenders are well positioned for growth, given our strong emphasis on ingenuity and a service proposition that is well balanced between borrowers and brokers.”
Jonathan Street, CEO, Thinktank
Street says there are opportunities for both brokers and lenders. Strongly performing businesses will require extra capital for expansion, while those that are struggling may need help restructuring debt or rationalising assets. Flexible and alternative lending solutions, such as alternative verification (mid-doc) products and SMSF, will be also be critical. Thinktank anticipates that the residential property market will steadily improve, coinciding with an economic uplift, particularly within the SMSF sector, but commercial property may take some time to reset.
“There will always be factors out of the control of a borrower or broker in regard to market conditions, lender product and policy movements, rates, external events – such as COVID-19 – government intervention, and the business and employment environment in general,” Street says. He believes the relationship between a broker and customer remains an essential and valuable one to be relied on in uncertain times. “Brokers who build and maintain these deep relationships will be highly sought after by customers to manage their financial requirements, be it for growth or stability,” he says. AB
NATIONAL EMPLOYMENT FIGURES, NOVEMBER 2020 Source: ABS; figures are seasonally adjusted
24
Oct-2020
Nov-2020
Monthly change
Monthly change
Yearly change
Yearly change
Employed people
12,770,700
12,860,700
90,000
0.7%
-83,100
-0.6%
Unemployed people
959,400
942,100
-17,300
-1.8%
240,700
34.3%
Unemployed rate
7.0%
6.8%
-0.2 pts
n.a.
1.7 pts
n.a.
Underemployment rate
10.4%
9.4%
-1.0 pts
n.a.
1.1 pts
n.a.
Participation rate
65.8%
66.1%
0.3 pts
n.a.
0.2 pts
n.a.
Monthly hours worked in all jobs
1,709 million
1,752 million
43 million
2.5%
-22 million
-1.2%
www.brokernews.com.au
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FE AT URES
OPINION
MARKETING YOURSELF FOR SUCCESS As Australia continues to recover from the pandemic, Tate Zanner, founder of award-winning marketing agency Insil, says brokers who want to stand out from the crowd must have a strong presence in the local community
COVID-19 first reared its head back in March 2020, I personally heard from many mortgage brokers who reacted by temporarily withdrawing their marketing. They made the move that seemed easiest and simplest to them at the time: cutting down on what they were spending to acquire new clients. Now, in 2021, with things looking a little more stable in Australia at least, many mortgage brokers are scrambling to make up for lost time. As markets begin to recover and the property market shows some incredibly positive signs, many brokers are realising that their impulsive reaction in slowing down their marketing spend was a mistake. My advice to those brokers is to double down on their local marketing efforts and understand that in order to acquire a long-term, loyal customer, they must relearn that it’s OK to spend some money. Brokers are lucky to work in an industry that allows for a high lifetime client value. Clients pass down mortgage brokers between family members, often spanning generations and decades. With this in mind, it shouldn’t matter if you have to spend slightly more on acquisition costs, because over time that return on investment will be strong. Being a good mortgage broker is about building a strong positioning and awareness in the local community, but often this is easier said than done. Generally speaking, since brokers tend to work in their small geographic areas, it’s critical that they’re able to position themselves in their community as the go-to people for mortgage finance. In order to find high-intent leads, a strong local marketing strategy for mortgage brokers should involve a combination of online advertising via Facebook and Google, and physical advertising in the local area, including advertising in places such as train
stations and bus stops. By covering your bases in both the physical and online world, you’ll be in the best position to catch as many leads as possible. An ideal strategy would involve a blended approach in which physical ads point to your website, and online ads make it clear how customers can physically meet up with you. The ultimate aim is to be seen as an approachable, trusted part of the local community. However, instead of implementing a ‘spray and pray’ approach, mortgage brokers need to ensure they’re tracking
WHEN
people for a very low cost. Facebook’s location targeting options are second to none and can help keep your marketing hyper-local. However, again, it doesn’t make any sense to expect a sale immediately. Design your ad strategy with the intention of building a strong position in your local community’s mind, so that when you finally get to speak to them, you’ve already covered off a lot of objections and built a high level of trust. Call centres are another option to add to the mix, although when
It’s critical that [brokers] are able to position themselves in their community as the go-to people for mortgage finance
Tate Zanner Founder and head of growth, Insil
down those leads that are already further down the intent pyramid. The first 3% of people in your market are conscious that they have a problem, and they’re looking for a solution. The next 7% are conscious that they have a problem, but they’re not looking. It’s far better to spend more money tracking down that 3% than to spend even more on persuading those who aren’t currently open to the idea of hiring a broker. Google is absolutely brilliant for mortgage brokers in particular because potential clients are already in the high-intent phase. Nine times out of 10, Google Ads have a positive return on investment for this very reason. However, Google Ads aren’t always a quick fix, and it’s best to analyse their effectiveness over a longer period of time, perhaps even on an annual basis. This is because a lot of optimisation needs to be done before you’ll start seeing results. Facebook Ads are great for positioning and awareness, and you can reach a lot of
considering them brokers should constantly remind themselves that finance is personal, and almost all potential clients would be uncomfortable about discussing their home loan with someone from an overseas call centre. Again, this is where local reigns supreme, especially hyper-local centres that know the area inside out. Mortgage brokers themselves should also not be afraid to jump on the phone if they have the time to do so. Even though cold calls can feel uncomfortable, the personal touch will immediately help ease any tensions. As with anything, practice makes perfect. Home loans aren’t a quick decision. It’s not easy to switch a large part of your financial life over to a new person, and for this reason, any marketing should be approached with a long-term vision in mind. But by revealing their clear local knowledge and insight, brokers will be well on their way to a lifetime of marketing success. AB www.brokernews.com.au
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DATA
NORTHERN TERRITORY
QLD SPOTLIGHT
Darwin saw out 2020 with an unexpected spike in dwelling prices Terry Roth, director at Herron Todd White, said the substantial increase in demand and market activity in Darwin at the end of the year had led to price gains in some residential markets in Darwin. He said the government’s response to COVID-19 played an important role in spurring buyer activity. “This is most evident in the introduction of generous incentives, especially for first home builders who could be entitled to up to $55,000 in various programs to encourage them to commence building, with all the economic multiplier benefits that it generates,” Roth said. The impact was seen in some developments in Darwin where blocks were quickly snapped up by prospective buyers. “This level of demand would have been unthinkable 12 months ago when estate developers were deliberating on whether to hold off on more land releases: now there is a scramble to get land developed as soon as possible,” he said. However, some market segments, particularly the inner suburbs, did not see the same improvements, and still had an oversupply of units. Area
Metro (H)
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
rent
yield
$450
4.9%
$500,000
3.1%
0.0%
Metro (U)
$298,750
0.9%
-5.7%
$360
6.5%
Country (H)
$430,000
1.3%
0.2%
$490
6.1%
Country (U)
$279,000
-2.9%
-4.8%
$362
6.3%
TASMANIA
Hobart property still in demand despite the economic impacts of COVID-19 Rate reductions and housing packages broke the lull in Hobart from April to June, spurring activity throughout 2020. “We predicted the lower socio-economic areas to level out, but this couldn’t be further from the truth, with these areas outperforming higher-valued areas,” said Herron Todd White property valuer Stephan Ning Liu. Liu said the low-rate environment made it cheaper to buy than rent. He believes current lending conditions are spurring market activity, and not just in lower socio-economic areas. There are still highend property transactions, even if property sales in excess of $1.5m have slowed. Properties selling for up to $600,000 continue to see good demand. “What will 2021 brings for us in the south is anyone’s guess, but it would be fair enough to predict a steady market with possible increases due to the record-low interest rates, shortage of supply and many owner-occupiers and investors alike chomping at the bit to buy a safe piece of the Apple Isle property market,” Liu said. Area
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
rent
yield
Metro (H)
$530,000
2.1%
9.2%
$450
4.5%
Metro (U)
$405,275
1.3%
3.9%
$395
5.1%
Country (H)
$350,000
1.5%
8.6%
$330
5.0%
Country (U)
$277,000
1.8%
4.9%
$280
5.2%
26
BRIGHTER DAYS FOR BRISBANE Brisbane’s market is set to maintain its strong footing in 2021 as buyers snap up properties while stock remains low managing director of Streamline Property Buyers, Melinda Jennison, has reported that dwelling demand continues to rise in Brisbane due to interstate migration, broad stimulus measures and positive changes to market sentiment. “Tight levels of inventory combined with rising buyer numbers creates urgency amongst buyers, which in turn adds to the upward pressure on property prices,” she said. Jennison said first home buyer activity was one of the crucial things to watch out for this year, with the sector showing particular interest in dwellings at the sub-$500,000 price point. “We expect this to continue to be driven by low interest rates and the fact that it is often cheaper to own a home than to rent in many areas throughout Greater Brisbane,” she said. Investors are also likely to remain active in the coming months. High levels of interest in dwellings priced up to the mid-$700,000 range THE
can be seen. Brisbane’s attractive yields and the cheaper costs of borrowing are two factors that are likely to keep investors on their toes this year. Apollo Auctions director Justin Nickerson said it was important to closely watch Brisbane’s “outer inner-ring”, 3km to 5km from the CBD. “The sweet spot for Brisbane has always been the outer inner-ring. Suburbs in this region have grown steadily across the past four years, but does this growth continue or will people be looking for greater value further out?” he said. Image Property director of sales Adam Empringham said lifestyle properties, including those with water views, would continue to be in strong demand not only in Brisbane but also in Southeast Queensland. “The lifestyle market is also being driven by the interstate market [as it’s] very, very good value for money by comparison. So that’s going to be a key market to watch, especially on the Sunshine Coast,” he said.
BRISBANE’S DWELLING MARKET INDICATORS — DECEMBER 2020 Source: CoreLogic
Houses
4.6%
$576,338
4.1%
$8.5%
Annual growth
Median value
Gross yield
Total return
Units
0.6%
$390,785
5.1%
$4.3%
Annual growth
Median value
Gross yield
Total return
SUBURB TO WATCH: NORTH MACKAY Median price (houses) $299,250
Median price (units) $215,500
12-month growth 17%
12-month growth 27%
3-year growth Average annual growth 22%
Gross rental yield
-1.0%
6%
Average annual growth Weekly advertised rent
Gross rental yield
-4.9%
$290
7%
www.brokernews.com.au
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AUSTRALIAN CAPITAL TERRITORY
Canberra was a top performer in 2020, recovering fast from the pandemic Over the year to December 2020, dwelling prices in Canberra grew by 7.5%, the second-highest annual gain next to Darwin’s 9%, according to CoreLogic. Sandra Howells, property valuer at Herron Todd White, said Canberra was relatively insulated from the impacts of the COVID-19 outbreak. “Baited buyer demand began making itself known again at auctions and open homes, however housing stock levels of established properties remained down on levels prior to the pandemic,” she said. But stable employment conditions and increased competition among buyers for limited properties protected prices from falling. “In short, this return of demand and limited stock saw Canberra’s house prices remain unaffected by the economic impacts of the pandemic. The residential property market for houses remained steady and robust, with prices across Canberra’s suburbs not showing any drops in value and properties of unique offering in desirable suburbs fetching record prices.” However, market conditions for the unit market were not as good overall, Howells said. Area
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
rent
yield
Metro (H)
$740,000
4.5%
7.6%
$580
4.2%
Metro (U)
$459,500
1.4%
4.4%
$480
5.6%
VICTORIA
Prices could shoot up again in Melbourne as pent-up demand is released
HIGHEST-YIELD SUBURBS IN QUEENSLAND Suburb
House
Gross rental yield
Median price
Quarterly growth
12-month growth
Average annual growth
COLLINSVILLE
H
18%
$80,000
4%
13%
3.8%
POINT LOOKOUT
H
12%
$855,000
17%
-12%
4.4%
CLONCURRY
H
12%
$150,000
11%
3%
-2.1%
DYSART
H
12%
$112,500
10%
13%
4.9%
BLACKWATER
H
11%
$130,000
-12%
-15%
5.6%
DEPOT HILL
H
11%
$120,000
-4%
N/A
-2.5%
MONTO
H
11%
$89,000
2%
-23%
-4%
HERMIT PARK
U
10%
$132,500
6%
6%
-4.7%
WHITE ROCK
U
9%
$220,000
0%
0%
-1.3%
CAIRNS NORTH
U
8%
$217,750
-1%
-9%
-3.3%
Randolph Clements, managing director at Raine & Horne Victoria, said COVID-19 had led buyers to look to regional areas of the state. “However, the inner [city] suburbs that have been most impacted by the pandemic should start to bounce back later in 2021 and early 2022 as buyers return from regional Victoria as fears about future COVID-19 lockdowns abate as more vaccines are produced,” he said. Since restrictions eased in Melbourne, the local housing market has seen an “explosion” in pent-up demand, Clements said. “Vendors have been held back from having inspections, while buyers have been unable to attend open homes. It’s like we’ve been holding back a herd of stallions who, once released, took off.” Melbourne ended 2020 with 1% monthly growth in values but on an annual basis. Clements said some properties were now being sold for more than their asking prices just a few days after being listed. “This level of sales activity in Melbourne will continue in 2021, with average price growth of 8% to 10% a distinct possibility thanks to low-interest rates and stronger economic confidence,” he said. Area
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
1.4%
rent
yield
6.4%
$430
3.0%
Metro (H)
$735,000
Metro (U)
$580,000
0.7%
6.4%
$420
3.7%
Country (H)
$410,000
2.6%
6.8%
$350
4.6%
Country (U)
$310,000
1.7%
8.2%
$295
5.0%
www.brokernews.com.au
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DATA
WESTERN AUSTRALIA
Substantial growth in residential sales made for a busy end of the year in Perth Despite December being a traditionally quiet month for sales, activity in Perth increased by 42.5%, a substantial increase on a year prior, according the Real Estate Institute of Western Australia (REIWA). REIWA president Damian Collins said the increase in sales activity could indicate that buyers were taking advantage of the market conditions while they are unable to travel. “Agents on the ground have reported that good, quality stock is being snapped up fairly quickly, and with listings for sale decreasing 16.5% in December, it is only a matter of time before median prices start to increase,” he said. December median prices remained stable, sitting at $480,000. About 45 Perth suburbs reported an increase in median price. Kelmscott saw the largest increase in of 6.2% to $375,000. Collins said Perth remained favourable for buyers and investors even with the expected increase of up to 10% in median price this year. “I would advise those who are thinking about purchasing their first home, trading up or investing, to act soon before prices inevitably rise,” he said. Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
rent
yield
Metro (H)
$484,000
0.8%
-0.2%
$370
4.0%
Metro (U)
$372,500
0.5%
-0.5%
$340
4.8%
Country (H)
$365,000
6.1%
7.7%
$360
5.3%
Country (U)
$202,000
0.5%
-5.4%
$300
7.8%
Total auctions
96
Cleared
51
Uncleared
16
Clearance rate
76.1%
PERTH Total auctions
39
Cleared
14
Uncleared
10
Clearance rate
58.3%
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
rent
yield
Houses
Units
$0
Sydney Melbourne Brisbane
Adelaide
Perth
Hobart
Darwin
$522,650
$772,250
$567,500
$429,750
$590,000
$395,000
$100,000
$472,500
$200,000
$341,000
$300,000
$495,000
$500,000 $400,000
$415,750
$700,000 $600,000
$520,000
$800,000
$587,250
$900,000
$710,000
Adelaide reported 5% price growth in 2020 despite the impacts of COVID-19 on the real estate market. James Trimble, general manager at Raine & Horne in SA, said robust market conditions in the city and across the state would likely continue until early April, with inner-ring suburbs and the Adelaide Hills being the hotspot regions. “With more people now able to work from home as a consequence of COVID, owning a family home in the Hills district is significantly more appealing,” he said. Beachside suburbs such as Glenelg, Seacliff, Brighton, West Beach, Henley, and Grange are also expected to be popular. Trimble said the reopening of state borders would help boost demand. “Some people living in Sydney, Melbourne and Brisbane will recognise Adelaide’s real estate affordability and shift here to take advantage of our lifestyle and be mortgage-free. Likewise, we expect South Australians who have ridden the property wave well interstate to also return to their state of birth.”
Canberra
CAPITAL CITY HOME VALUE CHANGES Capital city
Weekly change
Monthly change
Year-to-date change
12-month change
Sydney
0.0%
0.4%
0.0%
2.3%
Melbourne
0.0%
0.7%
0.0%
-1.7%
Brisbane
0.1%
0.9%
0.2%
3.2%
Adelaide
0.1%
0.7%
0.1%
5.9%
0.2%
0.8%
0.3%
2.3%
0.0%
0.6%
0.0%
1.5%
Metro (H)
$490,000
2.2%
3.8%
$385
4.2%
Metro (U)
$350,000
0.0%
-0.9%
$330
5.0%
Perth
Country (H)
$279,000
0.0%
0.8%
$270
5.1%
Combined 5 capitals
Country (U)
$219,000
0.0%
0.9%
$210
5.1%
28
ADELAIDE
MEDIAN HOUSE AND UNIT PRICES
Strong market conditions are expected to spur buyer activity in the year ahead
Area
The combined capital city clearance rate fell to 69.9% in the last reporting period of December, despite auction activity ramping up with a total of 2,537 homes taken to auction, higher than the 2,085 auctioned in the previous week. This was still lower than the 2,804 auctions held over the same week in 2019. The preliminary clearance rate dipped from 75.1% to 74.6%. More than 1,000 homes were taken to auction across both Melbourne and Sydney over the week, the busiest week the cities have seen since early April. Melbourne hosted 1,131 auctions, up from 899 the previous week but lower than the 1,405 in 2019. The preliminary auction clearance rate was stable, with 73.5% of homes selling after a 73.6% preliminary result the previous week. Sydney held 1,006 auctions, up from 867 auctions the week before and higher than the 875 auctions in 2019. A preliminary auction clearance rate of 76.5% was achieved, down from the 80.1% preliminary result a year ago, which later revised down to 74.1%.
$649,000
SOUTH AUSTRALIA
WEEK ENDING 13 DECEMBER 2020
$833,000
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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BRISBANE CANBERRA Total auctions
113
Cleared
82
Uncleared
12
Clearance rate
Total auctions
149
Cleared
75
Uncleared
42
Clearance rate
64.1%
87.2%
SYDNEY Total auctions
1,006
Cleared
646
Uncleared
198
Clearance rate
76.5%
TASMANIA
MELBOURNE Total auctions
1,131
Total auctions
3
Cleared
710
Cleared
1
Uncleared
256
Uncleared
1
Clearance rate
Clearance rate
73.5%
n.a.
Note: A minimum sample size of 10 results is required to report a clearance rate.
NEW SOUTH WALES
Area
Median
Quarterly
12-month
Weekly
Gross
price
growth
growth
median
rental
rent
yield
The new year presents further opportunities for growth in regional NSW Angus Raine, executive chairperson of Raine & Horne, said 2020 had been a “watershed year” for regional NSW, which reported average growth of 7% as more Sydneysiders fled the city lockdowns to the Central and South Coasts and many regional towns and cities. He said the increased activity was not confined to big regional cities such as Wagga, Bathurst and Orange. For instance, homes in Boorowa, a small town 340km southwest of Sydney, sell for around $420,000, which is well above the asking price of $350,000. “While more listings might slow this level of growth slightly, I’m expecting markets in regional NSW to continue to roll through 2021 and well into 2022 as more city workers realise they can work remotely, still earn Sydney dollars but live regionally,” Raine said. According to CoreLogic data, regional NSW ended the year with an 8.3% annual gain in dwelling values. Regional NSW outperformed Sydney, which only posted a 2.7% growth in values.
Metro (H)
$950,000
1.2%
6.2%
$530
2.9%
Metro (U)
$712,000
0.7%
3.1%
$500
3.6%
Country (H)
$505,000
1.7%
6.0%
$400
4.2%
Country (U)
$439,000
1.2%
4.2%
$360
4.4%
Source: Except where otherwise stated, all data sourced from CoreLogic, December 2020
NICK YOUNG: TRAIL BOOK SALE EXPERT Sell your book. Keep your clients. Release working capital or start succession planning. 03 8508 6666 | 0417 392 132 | nyoung@trailhomes.com.au | trailhomes.com.au www.brokernews.com.au
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PEOPLE
Aggregator Finsure
IN THE HOT SEAT
Andrew Loucas, who works at Sydney neo brokerage Loan Base, has only been a broker since August 2019 but is already notching up impressive volumes and won an Adelaide Bank Young Gun of the Year – Independent excellence award at the Australian Mortgage Awards 2020
You became a broker in August 2019. How did that come about? For the 10 years prior to my role as a broker I had been A working in the banking industry, predominantly at UBank. I felt like it was time for a change and sought to forge a new path. Becoming a broker was attractive to me as I believed it would give me a greater sense of connection with my clients – we wouldn’t just have a one-off interaction via a call centre; instead I would get to build a client portfolio and help them achieve their own dreams. Loan Base is doing some very interesting things with tech in the broking space, so it seemed like a perfect fit.
Q
What do you enjoy most about your role? Andrew Loucas, senior mortgage broker, Loan Base A No two days are the same. Whether speaking with new prospective clients, looking after my portfolio or speaking with credit assessors, there’s always a new Q What is the most challenging part challenge. I’m also extremely passionate about property and of your job? love having the opportunity to educate my clients and help grow Lenders’ retention teams are quite challenging as they will often A go to great lengths to retain a client. This is why building a strong their property portfolios. I’m very much a people person and at my happiest when I have the opportunity to speak with people and rapport and connection with my clients is really important. When they connect with them on shared passions and interests. I believe my have a good relationship with me and can see all my hard work in empathy and passion illustrates to clients that I’m driven to help order to achieve a positive outcome, it makes declining the retention them improve their financial situation, and they appreciate and offer a bit easier. commend me for my persistence. What are your long-term goals as Q a broker? What is something that surprised you about Q the industry? I hope to one day be recognised as one of the top brokers in the A country, to build a loyal network of clients who refer friends and At UBank, incoming leads were highly motivated, knew which A product they wanted and were just wanting to confirm they family to me, and to foster and grow strong, enduring relationships with BDMs from key lender partners. Ultimately, I don’t treat this role qualified for the product. Many of the incoming leads brokers get as a job but as a calling. I find it truly rewarding to help clients achieve are colder and require more hand-holding to get to the point of their financial goals and to impart as much knowledge as possible in application. This has highlighted just how valuable things like my interactions with them. AB referrals and positive reviews can be.
Q
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