Australian Broker 18.02

FEBRUARY 2021 ISSUE 18.02

Brokers, non-banks crucial to recovery Non-bank lenders and brokers are best placed to help COVID-affected customers, says La Trobe Financial /11

CAFBA focuses on education, diversity The peak body’s new board is keen to support and educate its expanding broker membership /18

Non-bank lenders backing SMEs As federal assistance for SMEs comes to an end, non-banks and the small business ombudsman want to provide help /22

ALSO IN THIS ISSUE…

ALF VASTA Fintech lender MoneyPlace is offering a fast, stress-free online approach to personal loans and is encouraging brokers to diversify into this space /14

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In the news Resimac Group completes asset finance expansion deal /05 Big deal Scott Roberts tackles a tight time frame on a complex commercial deal /21 In the hot seat Broking newcomer Sheena Briffa is already kicking plenty of goals /30

1/02/2021 9:14:32 AM

NEWS

IN THIS SECTION

Lenders Teachers Mutual seeks merger with Victorian credit union /04

Aggregators NMB enjoys best half-year results ever /06

Market Homeowners trust brokers over banks for refinances – study /10

Regulators AFCA increases compensation limits for complaints /12

Technology Brisbane fintech plans to shake up lending market /08

www.brokernews.com.au FEBRUARY 2021 EDITORIAL

SALES & MARKETING

Editor Antony Field

Publisher/Sales Manager Simon Kerslake

News Editor Madison Utley

GLOBAL WATCH What’s happening in the mortgage, broking and banking world in the United States and Canada? Here’s your snapshot of the news that matters most in North America

LACK OF NEW HOMES IN U.S. EXACERBATES AFFORDABILITY ISSUE lumber prices surging to levels never seen before, builder sentiment in the market for new single-family homes in the US dwindled in January, according to the National Association of Home Builders (NAHB). The latest NAHB/Wells Fargo Housing Market Index showed that builder confidence dropped three points to 83 in January. NAHB chairman Chuck Fowke said that, despite the strong housing demand and low mortgage rates, the lack of new homes on the market continues to exacerbate affordability problems.

“Builders are grappling with supply-side constraints related to lumber and other material costs, a lack of affordable lots and labour shortages that delay delivery times and put upward pressure on home prices. They are also concerned about a changing regulatory environment,” Fowke said.

WITH

Production Editor Roslyn Meredith

ART & PRODUCTION

Global Head of Media Marketing Lisa Narroway

CORPORATE

Designer Cess Rodriguez

Chief Executive Officer Mike Shipley

Production Manager Alicia Chin

Chief Operating Officer George Walmsley

Traffic Coordinator Kristine Jamir

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

EDITORIAL ENQUIRIES

Madison Utley +61 2 8437 4700 madison.utley@keymedia.com

SUBSCRIPTION ENQUIRIES

SUBDUED SPENDING WILL DELAY CANADA’S RECOVERY, SAYS BANK Bank of Canada has projected that Canada’s return to strong economic growth will come after a protracted recovery, with subdued spending due to COVID-19 mobility restrictions likely to be followed by a healthy rebound once measures are eased. In its latest Monetary Policy Report, Canada’s central bank said it was expecting growth to hover around 4% this year and approach 5% in 2022, before moderating in the neighbourhood of 2.5% by 2023. Markets should expect an early speed bump, however: the central bank is predicting negative growth during the first quarter. Fortunately, the federal government’s roll-out of its COVID-19 vaccination program “has pulled forward the timeline for achieving broad immunity and improved the outlook for growth in the medium term”, the bank said.

THE

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ADVERTISING ENQUIRIES

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

RECORD-LOW 30-YEAR INTEREST RATE DRIVES UP REFINANCES activity in the US is still going strong thanks to low interest rates, REFINANCE according to the December Origination Insight Report from ICE Mortgage Technology. With interest rates down to their lowest level, the share of refinances remained high at the end of 2020. Of the total closed loans, refinances accounted for 60%, while purchase loans remained at 39% in December. The share of conventional loans dropped one percentage point month-over-month, representing 81% of all closed loans.

The 30-year note rate across all loan types stayed below 3% for the second consecutive month. Average interest rates for Federal Housing Administration and conventional loans dipped to 2.94% and 2.96%, respectively. The note rate on Veterans Affairs loans also fell in December, down to 2.66%.

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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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1/02/2021 11:23:46 AM

NEWS

LENDERS TOP 10 MUTUALS BY TOTAL ASSETS — FY2020

PEPPER TO SPONSOR HAWKS NBL BASKETBALL TEAM

Source: KPMG Mutuals Industry Review 2020

has announced a partnership with the Wollongong-based Hawks basketball club. The non-bank lender will be the Hawks’ principal sponsor for the 2021 NBL competition because the club’s ambitions align with Pepper’s mission “to help people succeed”. Pepper Money Australia and New Zealand CEO Mario Rehayem said, “This partnership, along with our shared values with the Hawks, will allow us to champion people that are traditionally underserved.”

CUA

$19.50bn

Newcastle Permanent

$11.10bn

Heritage Bank

$10.74bn

PEPPER MONEY

lender Plenti has posted loan originations of $130.9m for the quarter ending 31 December 2020 – a 58% rise from the prior corresponding period and a 22% jump from the previous quarter.

It is the sixth straight time Plenti has attained record monthly loan originations. Over the quarter, Plenti’s total loan portfolio increased to $508m, which was 46% above prospectus forecast. It also maintained a solid credit performance over the quarter, with annualised net losses of 0.82%.

“The mutual industry was formed to look after the members, and if we are able to help more Australian essential workers through mergers, we are open to these discussions” Steve James CEO, Teachers Mutual Bank

2% h 6% h 7% h

People’s Choice Credit Union

$9.45bn

Teachers Mutual

$8.14bn

Greater Bank

$7.52bn

5% h

Bank Australia

$7.20bn

14% h

Beyond Bank

$7.07bn

14% h

IMB Bank

$6.79bn

P&N Bank

$6.18bn

PLENTI ACHIEVES RECORD QUARTER FOR LOANS NON-BANK

12% h

1% h

12% h 45% h

TEACHERS MUTUAL SEEKS MERGER WITH CREDIT UNION Teachers Mutual Bank has unveiled plans to pursue another merger, this time with Victoria’s Pulse Credit Union, as the trend for consolidation in the mutual sector continues Mutual Bank Limited and Victoria-based Pulse Credit Union Limited have signed a memorandum of understanding and are now working towards joining forces.

Due diligence will be carried out before seeking the approval of APRA and Pulse Credit Union’s membership.

This is the second merger Teachers Mutual has recently sought – in August, it announced it was working on a merger with Victoria’s Firefighters Credit Co-operative Limited.

According to Pulse CEO TEACHERS

Stuart Neave, the tumult of the last 12 months – digital disruption, reduced margins, increased regulatory change and COVID-19 – led the board to seek out opportunities to scale up to ensure it could continue supporting its members.

Teachers Mutual was seen as the natural fit, with both groups providing essential workers with a high calibre of service.

“We have chosen Teachers Mutual Bank Limited as our preferred partner as we are united by our support for the healthcare and education industries, our dedication to members and strong values,” Neave said.

“We believe the proposed merger with one of the largest mutual banks in Australia will provide a greater opportunity to enhance member value through improved product and service offerings.”

Teachers Mutual CEO Steve James spoke of economies of scale.

“The disruptive economic conditions of 2020 demonstrated why size and scale matters in the mutual sector. In order to remain competitive and provide members with outstanding value, we must continue to invest in technology and in our people,” James said.

As James sees it, the industry can expect further consolidation in the mutual sector.

“The mutual industry was formed to look after the members, and if we are able to help more Australian essential workers through mergers, we are open to these discussions,” he said.

The Teachers Mutual board will remain unchanged.

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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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1/02/2021 11:23:57 AM

INDUSTRY UPDATE

RESIMAC GROUP FINALISES ‘MILESTONE’ ASSET FINANCE DEAL Resimac Group’s expansion into asset finance has come to fruition now that it has taken full ownership of IA Group. The non-bank residential mortgage lender is targeting the consumer and SME markets

IA Group was set up 20 years ago and offers a range of lending products, including asset finance, secured business loans, personal loans, bridging loans and car loans.

It has now been renamed Resimac Asset Finance after Resimac Group assumed 100% control on 1 February. It joins other wholly owned subsidiaries in the Resimac Group, including Resimac, Resimac NZ and homeloans.com.au.

Resimac Group CEO Scott McWilliam said the acquisition enabled the non-bank lender to offer a full suite of lending products to consumers and commercial borrowers.

“This is an important milestone for Resimac Group,” he said. “Over the last 35 years, we have built a successful business originating secured lending assets that are readily securitisable. Launching Resimac Asset Finance is a natural progression that enables us to take advantage of adjacent opportunities as we further diversify our products and asset classes.”

Resimac Group acquired a 60% controlling stake in IA Group on 1 January 2020 and entered into an option agreement for the remaining 40%, which it has now taken up.

“The flexibility and breadth of their product range is attractive to us,” McWilliam said.

Over the last 12 months, Resimac Group had assessed the small asset finance business.

“It’s given us even more comfort in terms of the acquisition and this being the right entry point for us,” he said. “We’ve seen enough to know we like it, we like the business, we like its credit discipline, we like its infrastructure, we like its distribution platform, we like the effectiveness of its funding program.”

SYDNEY-BASED

Scott McWilliam, CEO, Resimac Group

“This is a great opportunity for Resimac to distribute credit into the market and get it to the people that need it” McWilliam said there were a lot of synergies, and it was about taking advantage of the funding and distribution infrastructure already in place at Resimac Group “by offering more products to existing audiences but also to new audiences”.

Resimac Asset Finance, led by general manager Michael Moloney, is particularly

targeting “deep and mature” consumer and SME markets, such as automotive and business-critical equipment loans.

“As the economy recovers from the impact of COVID, there will be a need for small business to invest in itself, and to do that it generally needs to borrow,” said McWilliam.

“What’s also encouraging is that the federal government is very, very focused on getting credit to small business.

“Small business is a big part of the Australian market.

It’s so important that lenders again lend credit out in the market, not just in the resi space – it’s just as important for small business.

“We see this as a great opportunity for Resimac to help to distribute credit into the market and get it to the people that need it.”

Diversification is a key strategy for the continued growth of Resimac Group, McWilliam said, with Resimac Asset Finance playing a major role going forward.

“We have been able to grow that book by a healthy percentage, but it’s coming off a low base,” he said.

“While IA Group is already profitable today, our objective is for it to be a significant contributor to the group’s profitability within the next five years.”

McWilliam said the acquisition had not resulted in any staff cuts.

“If anything, we will be acquiring further talent in the market to help drive the growth strategy.”

The launch of Resimac Asset Finance comes after a period of strong performance by Resimac Group. In FY20, it reported a normalised net profit after tax of $55.7m, up 79% from the previous financial year.

The ASX-listed Resimac Group, named Non-Bank of the Year at the Australian Mortgage Awards 2020, services more than 50,000 customers. It has a loan book of about $13bn and has issued in excess of $30bn worth of mortgage-backed securities to date. Resimac Group works with a network of more than 12,000 broker partners. AB

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1/02/2021 2:17:14 PM

NEWS

A G G R E G AT O R S AFG APPOINTS NEW SALES MANAGER has announced the appointment of Adam Barker as state sales manager for Queensland and the NT. In his new role, Barker will work closely with AFG national manager for strategic partners and recruitment Them Lam in supporting the aggregator’s strategic partners in the two states. He will also take charge of recruiting new brokers and broker businesses. “We believe Adam is the perfect fit for the role and the right person to head up this important part of the business. I am very confident Adam will make his mark on the role,” Lam said.

AFG

PLATFORM FINANCE CRM SETS BROKERS UP FOR BID

NMB CELEBRATES BEST HALF-YEAR AS BROKERS FLOCK TO JOIN GROUP Despite the pandemic, Melbourne aggregator nMB has just enjoyed its best half-yearly results, reflecting the record number of brokers and loan writers it’s recruited National Mortgage Brokers is celebrating after completing a “ripping half-year, the best in our 19 years of operations”, said managing director Gerald Foley.

Melbourne-based nMB recorded settlement growth of 16.5% for the last half-year and annual loan book growth of 8%.

“It’s certainly our most productive half-year of recruitment of new broker businesses and new loan writers,” Foley (pictured) said.

“Our recruitment efforts of the last couple of years have seen good-quality brokers joining our group, who have been able to add their settlement volume to our numbers.

AGGREGATOR

Commercial Loans

“We’ve also seen some really strong improvement in some of the brokers that have been with us for a period of time, and are now starting to see some good results come through.”

New broker recruitment for the half-year saw 37 new mortgage broker agreements (or businesses) and 65 loan writer appointments, bringing the total number of broker agreements to 255 and loan writers at nMB to 491.

Foley said during COVID-19 nMB had learnt a lot about how to engage with people using digital means, including meeting, training and onboarding brokers in Victoria and across Australia.

“We were really happy to hit those strong numbers in such a

difficult time,” he said.

“There were many brokers who found that our more hands-on approach to working with our brokers sat comfortably.” nMB’s philosophy is about “taking brokers on the broker-to-broker business journey”, Foley said. “We believe there’s five parts to building a successful broker business – people, planning, process, partners and premises.”

The sales team is also growing with the recent addition of another partnership manager in Victoria, Anthony Wickremasinghe.

A further partnership manager for NSW/ACT will soon be appointed.

Foley said digital engagement would continue in 2021, saving both brokers and customers time.

He also hoped lender turnaround times would improve this year.

“It’s not a good enough experience for brokers or their customers to be waiting sometimes into weeks for an answer on a loan application,” he said.

group supplying aggregation services centred on asset finance has designed a CRM specifically for mortgage brokers looking to diversify into the space. Platform Finance’s new CRM – Platform Connect – has BID requirements built into the workflow, along with a quoting and lodgement system designed for mortgage brokers. Platform Finance CEO Brad Crinion said the group had been working hard both internally and with external partners to ensure the new system would provide the necessary level of support to be BID compliant.

A

“Our recruitment efforts have seen good-quality brokers joining our group, who have been able to add their settlement volume to our numbers”

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1/02/2021 11:41:20 AM

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1/02/2021 11:24:51 AM

NEWS

TECHNOLOGY

HERITAGE ONLINE TOOL WILL CUT PROCESSING TIMES has teamed up with global IT firm Experian to roll out a new credit decisioning platform over the next 12 months that will significantly speed up loan processing times. Heritage Bank CEO Peter Lock said the tool would allow it to cut the average assessment time for standard home and personal loan applications from “about five business days to roughly one business day” through auto-approvals for eligible loans. Borrowers will also be able to submit loan applications and supporting documents online for faster processing.

HERITAGE BANK

SPATE OF NEW FINTECH LENDERS JOINING MARKET welcomed many new fintechs last year, particularly in the areas of lending and cryptocurrency, according to KPMG’s latest market snapshot. Over the past 12 months, 104 new fintechs joined KPMG’s list – 26 of these were lenders.

KPMG national fintech lead Daniel Teper said increased digitisation and new consumer behaviours shaped by COVID had created opportunities for innovation. “The overall impressive net growth in the number of fintechs illustrates both the robust market dynamics and a strong support for the fintech sector in Australia.”

AUSTRALIA

“For too long Australians have had to jump through hoops in order to secure a loan, whether it be for personal or business purposes” Brodie Haupt Co-founder, WLTH

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BRISBANE FINTECH LAUNCHES INTO RESIDENTIAL, COMMERCIAL LOANS New digital lender WLTH plans to shake up the Australian loan market with its user-friendly technology and then do the same with the payments sector fintech WLTH has entered the Australian residential and commercial lending space with the launch of its mortgage offering.

The digital lending and payments provider announced its official launch in January, rolling out its variable loan product with a rate of 2.09% for owner-occupied residential properties. It will be available for new purchases and refinances.

The launch was part of the company’s initial plan to offer residential, commercial and self-managed superannuation fund lending solutions before breaking into the digital payments sector sometime this year.

Interested borrowers can use BRISBANE-BASED

WLTH’s Lending Loop platform, which takes customers through a five-step digital application process to apply for a low-rate property loan or refinance an existing loan. Borrowers can also access lending specialists through the platform.

WLTH was founded by serial entrepreneurs Brodie Haupt (pictured), Drew Haupt, Darren Hodgkin and John Kerr in 2019.

The company aims to write $1.23bn worth of residential and commercial loans by the end of financial year 2022, bringing to the market a focus on techcentric products, feature-laden transactional accounts, a powerful payments app, a high-value loyalty system and a pipeline.

Brodie Haupt said the company was established with the aim of addressing the need for “improved and higher-value financial experiences” in a market dominated by slow-moving banks and inefficient business systems.

“For too long Australians have had to jump through hoops in order to secure a loan, whether it be for personal or business purposes,” he said.

“With tenuous paper-centric application processes and a lack of user-friendly tech products to manage and interact with their financial institution, we strongly believe WLTH is in a unique position to bring an improved and higher-value experience to market.”

Haupt said for this reason WLTH did not call itself a bank.

“Our competitive differentiation lies in being able to provide financial services that meet the needs of Australians, without the bureaucracy, limitations and legacy systems of the big four.”

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1/02/2021 9:39:51 AMPM 16/10/2017 2:07:04

NEWS

MARKET HOMEBUILDER EXTENSION BOOSTS NEW HOME SALES in the timeline of the HomeBuilder grant, giving people longer to commence building, boosted new home sales activity over the last month of 2020, according to the latest figures from the Housing Industry Association.

Over December, home sales increased by 91.8%, making it the second-strongest month for new homes in the 20-year history of the HIA sales report, behind only the level of sales activity recorded in March 2001. Annually, new home sales increased by 32.5%.

CHANGES

AUSTRALIANS SAVE BILLIONS DURING PANDEMIC have stockpiled more

AUSTRALIANS than $200bn in

HOMEOWNERS TRUST BROKERS OVER BANKS FOR REFINANCING – STUDY Brokers are trusted by homeowners for their ability to compare loan rates and features when they are considering refinancing, a new study reveals majority of Australian homeowners trust mortgage brokers more than they trust banks when it comes to refinancing, according to a new survey by Mortgage Choice.

The survey, which gathered responses from 1,023 homeowners across Australia, showed that around two in five respondents were either in the process of refinancing or were considering switching to a new loan. Among this group, around 94% said they trusted mortgage brokers when it came to loan recommendations when refinancing.

More than half (53%) are worried that they might not get the best deal when speaking THE

directly to their bank, while 49% said they felt that banks didn’t always have their best interests in mind.

Mortgage Choice CEO Susan Mitchell (pictured) said that while banks could provide borrowers with information on their own deals and offerings, they did not have an in-depth understanding of competitors’ products.

“Mortgage brokers not only provide a broad selection of loans across a variety of lenders, they also take the time to explain why a particular loan is being recommended. This is very reassuring for consumers and demonstrates that mortgage brokers work in the homeowners’

savings as a cushion against the financial uncertainty brought about COVID-19, according to new Treasury figures. The analysis revealed that Australian households have amassed more than $112bn, while businesses, excluding financial institutions, have stashed away another $104bn in deposits in preparation for a pandemic-fuelled recession.

According to the federal government, the balance sheet is an indication that it is the right time to start withdrawing the stimulus measures.

best interests at all times,” she said.

For 55% of respondents, the biggest advantage of working with a mortgage broker is that they are able to compare loan rates and features. About 45% said brokers streamlined the refinancing process, saving them time and preventing any hassle.

“That is why I urge borrowers in the market for a better deal to engage the help of an experienced mortgage broker to learn what other options they have,” Mitchell said.

The Mortgage Choice study also revealed that the pandemic has accelerated the desire among young Australians to buy their own home, and that nearly 45% feel optimistic about achieving their homeownership goals.

It showed that young people are committed to saving and buying a home sooner, with 60% saying they are reducing their spending and 43.4% applying for government grants for first home buyers.

“I urge borrowers in the market for a better deal to engage the help of an experienced mortgage broker to learn what other options they have” Susan Mitchell CEO, Mortgage Choice

BIG GROWTH IN NATIONAL HOME LOAN VALUES Source: MFAA Industry Intelligence Service Report, 10th Edition

VALUE OF HOME LOANS SETTLED BY BROKERS, PER SIX-MONTH PERIOD $100bn

$80bn

$60bn

$86.4bn

Apr 18–Sep 18

Oct 18–Mar 19

Apr 19–Sep 19

$98.7bn

$87.6bn

Oct 16–Mar 17

$97.9bn

Apr 16–Sep 16

$97.6bn

$94.6bn

Oct 15–Mar 16

$100.0bn

$94.5bn

$20bn

$92.0bn

$40bn

$0bn

10

Apr 17–Sep 17

Oct 17–Mar 18

Oct 19–Mar 20

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1/02/2021 11:43:08 AM

BUSINESS UPDATE

BROKERS, NON-BANKS CRITICAL TO COVID-19 RECOVERY many, the simple turning of the calendar, fireworks, a celebration with friends, and some best-laid plans and resolutions were all that was needed to put 2020 behind them – sure that 2021 would be much brighter and more prosperous.

However, regrettably, there is a strong possibility that many will in fact require a greater level of assistance, empathy and understanding, particularly in relation to their finances.

We expect the COVID-19 recovery to be non-linear and that reverberations will play out for at least the next 24 months, with residual impacts on individuals and businesses, and economies still evolving and highly uncertain.

What we do know is that the appropriate provision of credit to the broader economy will be a key and critical lifeblood throughout the recovery phase.

We also know that Australians are incredibly resilient; however, sometimes they do need help through difficult periods.

This is where we anticipate a further increase in demand for near prime non-bank loan funding, sourced by brokers who have the access, knowledge and experience to assist.

Borrowers who have been impacted by COVID-19 already, along with those who are yet to fully experience its impact (which may emerge over time as Government assistance and stimulus ends) will require the support of brokers and lenders who will need to take the time to fully understand their unique circumstances in order to navigate a path down the financial road ahead.

Brokers and non-bank financial institutions (NBFIs) are in a terrific position to serve this segment of the market and will be critical to assisting with the recovery.

employment as a result of COVID-19. It may not have caused credit impairment immediately, as they may hold cash reserves (we know that many Australians are well ahead on their loans), but a sudden change in employment or a need for multiple casual sources will mean they are determined to be ‘near prime’ – but certainly not impaired.

So, as we have said, perversely, COVID-19 will see an increase in near prime customers and underscore the importance of and need to service this segment of the market.

We highly recommend brokers deal with lenders that have long track records of operating in the near prime space. There are four or five NBFIs that have been appropriately lending in this space for decades and that possess the knowledge and experience to appropriately assist brokers and their clients.

FOR

Brokers guide the path to solutions We think the broker industry will receive a major boost on the back of COVID-19 in 2021 and beyond, as we know that where there is confusion and complexity, there is opportunity – and that environment has always provided

Building clients for life Our experience tells us that people never forget those who help them, or stand by them in a time of need, and near prime borrowers fit that mould.

For brokers, helping near prime borrowers is a great way to build loyalty and trust, creating clients for life.

Cory Bannister, Senior Vice President – Chief Lending Officer, La Trobe Financial

tailwinds for brokers. Similarly, these same tailwinds relating to complexity and confusion have always been supportive for NBFIs. There are literally thousands of loan products in the market.

A customer cannot be expected to navigate their way through the myriad of loan products – particularly in the fast-changing environment we now face – whereas brokers can use their technology, knowledge and experience to distil these options quickly and appropriately to assist customers.

As a result, we expect to see broker share holding above 60% and targeting the 70% milestone.

Non-banks provide critical solutions for recovery NBFIs are ideally suited to providing credit to creditworthy

applicants appropriately throughout this period, thanks to the custom nature of their credit assessments and willingness to take the time to fully understand the customer’s unique position and provide an appropriate tailored solution to meet the customer’s objectives and requirements. Thematically, we think it’s unlikely the major banks will reverse their long-term ‘simplification’ trend focusing on super prime home loan borrowers in any case.

It still remains that near prime is not always associated with impaired credit.

In fact, the events of 2020 associated with the pandemic perversely highlight this point.

Regrettably, many people will have experienced a loss of, or interruption to, their

Seven decades of experience As Australia’s longest-standing non-bank of size with seven decades of experience in building and innovating finance products, and now with $12bn worth of assets under management, La Trobe Financial has the heft and scale to be regularly considered in the top two choices by brokers across Australia.

Our unmatched broad product range and flexible, customised assessment methodology, along with our incredibly deep experience in dealing with ‘credit events’ such as COVID-19, means we have become even more important to brokers.

La Trobe Financial will continue to be a reliable and committed partner to our brokers and borrowers throughout this period, and our team are ready and willing to assist. AB

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1/02/2021 11:25:47 AM

NEWS

R E G U L AT O R S

ACCC AMENDS CDR RULES TO BENEFIT BUSINESSES ACCC has amended the Consumer Data Right rules for open banking, expanding the types of consumers who can use the CDR to include more business customers.

From 1 November 2021, the major banks will enable these customers to share their data with accredited data recipients when shopping around for better services. “This significant package of amendments is designed to encourage participation in the Consumer Data Right by expanding its benefits to more businesses, including companies and partnerships,” ACCC Commissioner Sarah Court said.

THE

XINJA BANK RETURNS DEPOSITS TO CUSTOMERS has acknowledged the completion of Xinja Bank’s return of deposits process. This was the first time an Australian authorised deposit-taking institution had returned deposits to its customers.

Xinja began returning deposits to its customers on 16 December, after announcing it intended to cease being a bank and hand its ADI licence back to APRA. Xinja had 37,884 customers with 54,357 individual deposits worth more than $25m. Xinja last month completed the process by voluntarily transferring the remaining 4,176 accounts to NAB. APRA

“This significant package of [CDR rule] amendments is designed to encourage participation in the Consumer Data Right by expanding its benefits to more businesses” Sarah Court Commissioner, ACCC

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AFCA INCREASES ITS COMPENSATION LIMITS FOR COMPLAINTS Financial complaints body AFCA has updated the monetary value of its compensation limits for claims made about loans, credit facilities and guarantors Australian Financial Complaints Authority has made changes to its compensation limits for financial loss complaints.

The adjusted monetary limits, which came into effect on 1 January, include the maximum value of a claim for compensation AFCA can consider; the maximum size of a credit facility AFCA can consider a complaint about; and the maximum amount AFCA can award a consumer or small business for complaints about banking and finance, general insurance, life insurance and investments, and advice.

For claims arising from a credit facility provided to a small THE

business or primary producer by a borrower of a small business loan, the compensation limit has increased from $1m to $1.085m per claim, while those made by a borrower of a primary producer loan rose from $2m to $2.17m per claim.

The monetary limit for claims arising from a credit facility provided to a small business or primary producer by a guarantor to set aside a guarantee supported by security over other security for a small business loan has also increased from $1m to $1.085m. For a primary producer, the amount went up from $2m to $2.17m.

The credit facilities must not exceed $5.425m for these types of claims.

For claims arising from a credit facility provided to someone other than a small business or primary producer by a borrower, the compensation limit has been raised from $500,000 to $542,000 per claim.

The limit for claims arising from a credit facility provided to someone other than a small business or primary producer by a guarantor to set aside a guarantee supported by security over other security has also increased from $500,000 to $542,000 per claim.

“The changes are set out in the AFCA rules, which require AFCA to adjust its monetary limits on 1 January 2021, and then every three years thereafter,” AFCA CEO David Locke (pictured) said.

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1/02/2021 11:26:09 AMam 9/12/20 9:51

FE AT URES

COVER STORY

BROKERS FIND THE PLACE FOR PERSONAL LOANS

Some brokers don’t offer personal loans, claiming they’re costly and cumbersome, but fintech lender MoneyPlace is determined to change their minds with fast funding and a simple online process

MONEYPLACE LOANS: FACTS AND BENEFITS Most common loan purposes, 2020

34%

Debt consolidation

23%

Used car

13%

Home improvement (including gap funding)

Average loan size

$23,349 Borrower savings

Customers save an average of $5,654 over the life of a MoneyPlace loan compared to a loan from a big four bank

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head of broker sales Alf Vasta is keen to dispel brokers’ myths about personal loans and educate them on how to expand into this space.

He spoke to Australian Broker about how the nimble, tech-driven lender is transforming the personal loan market. Brokers Mhairi MacLeod of Astute Ability Finance Group and Albert Lee of LendConnect also shared their views on MoneyPlace and the benefits of diversifying into personal loans.

Vasta says MoneyPlace was founded in 2014 by Stuart Stoyan and “we wrote our first loan in 2016”.

“We provide unsecured personal loans from $5,000 to $60,000 for any legal purpose. Importantly, we provide borrowers with a personalised interest rate, so customers who have good credit get rewarded with a market-leading interest rate.”

As an online business, MoneyPlace prides itself on efficiency.

“In fact we recently funded a loan in 34 minutes from time of application to the funds hitting the customer’s account,” Vasta says.

“This process efficiency and strong automation helped us to be the leading personal loan provider throughout 2020.”

MoneyPlace is a member of the Liberty Group and works closely with Liberty to bring personal loans to brokers and their customers.

Vasta says common objections from brokers about personal loans include that they are “too expensive, time-consuming, paper-driven, not rewarding, and the purposes are limited”.

“The MoneyPlace proposition is the complete opposite – we have the lowest unsecured rate in the MONEYPLACE

market, completely online. Loans are funded typically in four hours from a broker submitting an application to money going into the customer’s account, and we fund loans for any legal purpose.”

Vasta says the lender constantly makes changes to enhance its proposition and make it simple for brokers and customers, including taking on board feedback from brokers.

“The system for both broker and client is all online, and the time to lodge an application through the MoneyPlace portal on average is less than five minutes.

“The reason why our brokers like dealing with us is they have direct access to all our lending specialists,

personal loans can convert more of your core business, whether it is residential or asset loans, but also create new opportunities with clients and professional connections,” Vasta says. “[Diversification] not only puts the client in a better position, whether it is debt consolidation or gap funding, but it also helps the broker form even stronger relationships with their client.”

MoneyPlace offers a wide range of loans: for debt consolidation and gap funding; loans for medical and cosmetic products, recreation products and assets such as cars, boats and trailers; loans for solar panels, renovations and more.

“Our motto is as long as it is a

“We have really pushed the message out that personal loans can convert more of your core business but also create new opportunities” Alf Vasta, head of broker sales, MoneyPlace the people approving the loans.”

With the personal loan space dominated by the banks, Vasta says the most exciting aspect of MoneyPlace is bringing personal loans to the broker market.

“If you remember how 20-plus years ago the mortgage space was dominated by banks. Today around 60% of mortgages are from brokers.

“We hope to replicate this in personal loans, one broker at a time.”

Broker awareness of personal loans has grown in the last two years.

“We have really pushed the message out to the market that

legal purpose and the transaction makes sense, we will be able to help your client,” Vasta says.

He adds that during COVID-19 the most common loan purpose has been debt consolidation as customers get their finances in order.

“On average, a borrower saves $5,654 on a personal loan with MoneyPlace compared to having a loan with a big four bank. Through COVID we saw brokers help their customers to get into a lot stronger financial position by reducing interest and also extending loan terms to reduce monthly repayments.”

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In partnership with

Vasta says there have been some COVID-19-specific trends in loan purpose too, with a large number of pets having been funded, especially dogs, as more and more people work from home.

“We also funded a horse float and recently a funeral plot.”

There has been a big increase in gap finance and debt consolidation loans because they provide both brokers and clients with certainty.

Loans for recreation products have also increased, including for bikes, campervans, trailers and older cars.

“At MoneyPlace we offer up to seven-year loan terms with no exit penalties, no early repayment and no

“not running the gauntlet of whether the valuation will stack up” – as well as a quick start to renovations.

“You are also more likely to get a higher property valuation once the renovations are completed,” he says.

Gap funding loans help clients enter the property market sooner, Vasta adds.

“We often see clients with good income and strong employment fall short on the funds to complete because of where current rent prices are at. By offering a MoneyPlace personal loan the broker can help their clients borrow for the stamp duty, legal costs or even funds to complete.”

“The system for both broker and client is all online, and the time to lodge an application through the MoneyPlace portal on average is less than five minutes” Alf Vasta, head of broker sales, MoneyPlace monthly fees. This allows clients to use structured payment strategy and improve their cash flow.

“We often see this as a direct benefit to the customer as we consolidate multiple credit cards, other personal loans and even tax debt. Brokers can confidently get clients on to a structured payment to help them down the track, especially if they are looking at a future property purchase.”

With more people wanting to renovate their homes, there’s a desire for quick finance, but Vasta says brokers often tell them that lenders’ service-level agreements for residential loans can be up to 20 working days and much longer for top-ups.

“Usually when clients are looking for top-ups, especially for renovations, they want the funding pretty quickly. Many customers also don’t want to go through a mortgage refi for the sake of an additional $50,000 to $60,000.”

Vasta says brokers can use a MoneyPlace loan to fund renovations within 24 hours. Once the renovations are complete, brokers can lodge the top-up as there are no exit penalties or monthly fees.

The benefits for brokers include

The lender also helps clients who have shortfalls in valuation which push the LVR above 80%.

Rather than pay lenders mortgage insurance at a high premium and have a higher interest rate with an LVR above 80%, clients can take out a personal loan to keep the LVR at 80%, avoid paying the LMI premium and have a lower mortgage rate.

Vasta says the client can pay out the MoneyPlace loan at any stage without penalty, such as a few years later when they refinance their mortgage.

He is urging brokers to introduce personal loans into their portfolio, with benefits including increasing revenue streams, working directly with clients to provide transactional or holistic solutions, and placing clients in a better financial position.

“It not only creates additional revenue streams but also allows a broker to convert more of their core business,” Vasta says.

“I often tell brokers, if they are stuck with a transaction, can a personal loan help?”

By not offering personal loans, brokers risk losing clients to competitors, he says.

“We constantly see brokers come

Alf Vasta, head of broker sales, MoneyPlace

to us retrospectively, saying ‘I just lost this client so now I want to get informed about personal loans’.

“My recommendation is for brokers to take action now.”

Vasta says MoneyPlace has been educating brokers about the personal loan market and the services the lender provides – from BDM support to its head office broker support team and direct access to decision-makers.

“We run many face-to-face sessions with brokers and regular virtual sessions and webinars to help brokers grow their client base and convert more of their core business. We also have marketing support to help brokers market to their client base.”

Mhairi MacLeod is the founder and principal of asset finance brokerage Astute Ability Finance Group on the NSW Central Coast.

She has been broking personal loans for 22 years and MoneyPlace has been on her lenders panel for the past two years.

MacLeod says many brokers think personal loans are arduous and time-consuming, but diversifying

is not only good for their business, “it’s fabulous for their clients”.

“I think personal loan lending is going to get a lot stronger over the coming 18 months, due to people wanting to look at debt consolidation,” she says.

MacLeod praised MoneyPlace’s lending policies, technology and platform.

“It’s straightforward, it’s clear; you’ve got clear pathways to BDMs, you can always get hold of someone.

“It’s not all robotic and online.

You actually get to speak to real humans that make real decisions and make common-sense decisions.”

MacLeod says a $26,000 MoneyPlace loan for one of her clients was recently funded in less than 48 hours.

“That’s not only service on behalf of the broker delivering to the client but it’s more exceptional service from the lender to the broker. This customer was stoked. Not taking away from major banks, but their time delays are 10 days or more.”

MacLeod says brokers should www.brokernews.com.au

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MONEYPLACE LOAN FEATURES

Loan amount

$5,000—$60,000

Security

Unsecured

Loan term

3, 5 or 7 years

Fixed or variable rate

Fixed

Repayments

Weekly, fortnightly or monthly

Interest rate range

6—26%

Fees

One-time establishment fee, no monthly fees, no early repayment fees

16

Mhairi MacLeod, founder and principal, Astute Ability Finance Group

consider their clients’ other needs, as people are taking out loans for debt consolidation and home office space or education courses to change careers.

“This is where brokers can actually utilise this personal loan space and still have the ability to provide a good service,” she says.

“The customer experience is awesome when you can use lenders that have this technology.”

MacLeod says MoneyPlace’s support is amazing – she and her

Albert Lee, director, LendConnect

they thought about it and worked with MoneyPlace BDMs, they would see it’s streamlined and not time-consuming.

“I think brokers just really need to give it a shot.”

Albert Lee is director of Sydney personal loan brokerage LendConnect, which assists brokers who refer clients for personal loans.

He says MoneyPlace has reinvigorated how personal loans should be transacted.

“They have a streamlined process

“MoneyPlace has a streamlined process with an accurate upfront quoting tool to provide clear transparency of what a potential customer can qualify for” Albert Lee, director, LendConnect team got to meet its BDMs and loan assessors.

“They walked us through every part of their product and the customer experience.

“I think that’s really important when you are choosing a lender of any kind – it’s understanding what the experience looks like for the customer after you’ve settled the deal.

MoneyPlace have demonstrated that really, really well to me as broker.”

MacLeod says she gets many loan referrals from other brokers, but if

with an accurate upfront quoting tool to provide clear transparency of what a potential customer can qualify for prior to applying.

“The partnership and support with open lines of communication has definitely empowered brokers like us with the ability to have a positive outcome for each of our clients and referrers.”

LendConnect’s experience with MoneyPlace has been fantastic, Lee says, especially its approval turnaround times, streamlined

technology and communication.

“Approvals are always obtained within two hours, and we have a dedicated credit analyst to partner with us to ensure the client obtains the best outcome,” he says.

“Communication and transparency are key values at LendConnect which are aligned to the team at MoneyPlace. Alf and his team provide a hands-on approach with partners and a focus on achieving the goals of referrers alike.”

Lee says brokers who do not offer personal loans run a real risk of their clients looking elsewhere for finance, damaging their income stream and client relationships.

“Clients could connect with their own bank to obtain the personal loan they require. This will provide the bank with the opportunity to cross-sell a mortgage directly.”

Lee says that as a specialised personal loan business LendConnect spends time with each client to understand their personal loan needs, and it uses its experience to connect clients with the best loan offer.

“When a broker is unfamiliar with the process or not specialised in personal loans and attempts to transact directly with a lender, it may become strenuous,” he says.

“This will often lead to a negative client experience and harm the client-broker relationship.”

Lee says brokers can be assured that a loan obtained via LendConnect will be efficient, transparent and executed with ease. AB

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PROFESSIONAL DE VELOPMENT

EDUCATION, DIVERSITY DRIVE CAFBA It’s an exciting time for the Commercial & Asset Finance Brokers Association, with new board leaders, a growing membership, and a strong focus on education and diversity that will benefit the entire industry

has emerged from a

CAFBA tumultuous year with a

fresh outlook and a determination to expand its horizons.

Membership stands at more than 1,000. It has grown over the past year, with full membership up 22%, while individual broker membership grew 11%, according to CAFBA’s annual review for 2019–2020.

Over the last three years, female membership has risen from 8% to 27% on the back of its Women in Leadership Scholarship Program and Women’s Networking Forum.

Two of CAFBA’s “founding fathers”, president David Gandolfo and company secretary Terry Moody, both honorary life members, have stepped down from the board.

They will continue to serve the association – Gandolfo as chair of the CAFBA Advocacy Committee and Moody as head of the CAFBA Education Council.

The board changes include new president Matthew Atkin, vice president Domenic Lo Surdo, company secretary Ian Elkner and treasurer Sharon Piening. There are also two new faces on the board – Rebecca Mansfield and Max McFarlane.

Australian Broker caught up with Atkin, Piening and Mansfield to discuss their new roles and how CAFBA is educating commercial finance brokers and promoting diversity.

Atkin, the managing director of Melbourne equipment finance brokerage Atlas Broker, has been CAFBA vice president for three years and became president last November. He says he joined the 18

board in 2015 because he had always been impressed by the calibre of its people and thought it was an “an enormous opportunity to get involved”.

“It has been a tremendous experience so far, and I am proud of what the various boards have achieved,” Atkin says. “I am very humbled to have been appointed

He says the board hopes to have its next three-year plan completed by late February, and this will have a big focus on education.

“We believe that education will be key to maintaining our high standards and ensures good customer outcomes.

“I also believe a good education pathway will enable us to attract

“We believe that education will be key to maintaining our high standards and ensures good customer outcomes” Matthew Atkin, president, CAFBA as president and understand the importance of the position to the continued success of CAFBA.” Atkin says it is an exciting time for CAFBA as “the baton is handed to the next generation”.

“At 46, I feel I am well positioned to help connect with the issues facing the more experienced members as well as the new ones starting out,” he says.

“I am very lucky to have a strong vice president in Domenic Lo Surdo and CEO in David Gill, who, along with the rest of the board, will work tirelessly to achieve our objectives over the next few years.”

Atkin says he wants to build on the hard work of three very successful CAFBA presidents over the last 10 years – Gandolfo, Moody and Mark Rayson.

top talent from a diverse range of backgrounds to the industry.”

The CAFBA Education Council was set up in October to oversee the “structure, content and delivery of education” in the commercial finance sector. It is made up of representatives from the foundation partners – leading financiers in commercial finance – and has teamed up with the Institute of Strategic Management to deliver the education courses.

CAFBA’s research shows that an expanded professional education program can attract a new generation of Gen Ys and millennials for whom a credential is a necessary first step to a structured career path.

The council already offers the Certificate IV in Financial Services

(FNS41815): Specialising in Commercial & Asset Finance as well as the Diploma of Financial Services (FNS51815): Complex Issues in Commercial Lending.

It will also roll out an Australian version of the Certified Lease and Finance Professional (CFLP) designation, the only leasing industry certification in the world, something Atkin is “very excited” about.

“The education council and the creation of its course content is a major priority,” Atkin says.

“We must continue to be progressive in our thinking and encourage the professionalisation of our industry.”

Atkin says he will also work with Gandolfo and the advocacy committee to engage both sides of politics, as well as the regulators and funders.

“We have had tremendous success with this over the years and understand it is an important voice for our members,” he says.

CAFBA’s membership growth can be attributed to several factors, Atkin says.

“I believe CAFBA is highly regarded by many people in the industry. Three years ago we set out our strategic objectives, and we have achieved nearly all of them.

“This involved expanding to be the voice of commercial brokers as well as asset finance brokers, decreasing the gender gap through initiatives such as the Women in Leadership courses, and many others.

“We have worked closely with our members, funders, politicians

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From left: Matthew Atkin, president, CAFBA; Sharon Piening, treasurer, CAFBA; and Rebecca Mansfield, board member, CAFBA

and the various regulatory bodies to ensure our members’ voices are heard. This has assisted in getting the right outcomes for their clients. I think the market values this.”

Atkin says the courses and education council have also “assisted those with aspirations to diversify to do so, as well as providing a career path for new entrants to the industry”.

“All of these factors have shown

more diverse group of people.”

Atkin says 2021 will be challenging for the industry.

“I think there is going to be enormous opportunity for those who are going to look for it, but it will not be easy.

“The back end of 2020 saw many of the funders’ response times blow out for a host of reasons, and many of the equipment suppliers can’t get stock from overseas. This has led to a backlog in approvals and

“I am passionate about diversity and the need for more women to be given the opportunity to take on leadership roles”

CAFBA BOARD

President: Matthew Atkin (Atlas Broker) Vice president: Domenic Lo Surdo (Stamford Capital) Company secretary: Ian Elkner (Centrepoint Finance) Treasurer: Sharon Piening (The 500 Group) Board members: Neil Ferguson (Ledge Finance) George Karam (BF Money) Renee Tocco (Loanezi) Mike Steel (RLA Finance Australia) Max McFarlane (Skyward Financial) Rebecca Mansfield (Loan Market)

Sharon Piening, treasurer, CAFBA that CAFBA is a progressive organisation that gets things done.

I think this resonates with brokers.”

CAFBA also wants its membership to reflect the clients its members serve.

“We have made some significant steps forward with our growth in female members, and the CLYP [Commercial Lending Young Professionals Group] is creating terrific networks for younger brokers,” Atkin says.

“We need to continue to build on this success. We now need to look at ways of attracting people to our industry from different ethnic backgrounds as the industry will get stronger with involvement from a

settlements, which I think we will start to see moving through from February onwards.”

Provided there are no major COVID outbreaks, Atkin believes there will be very strong settlements in asset finance in May and June due to the “accelerated depreciation/asset write-off ”.

He expects to see a return of many streamlined lending products, which will help turnaround times.

“Brokers will need to continue to help funders deal with arrears and as the JobKeeper program winds up.”

Brokers will also need to keep up to date with lenders’ products to ensure their clients can access the money they need.

Atkin says the trend of brokers diversifying away from consumer lending and into commercial will continue in 2021, but due to the differences between the two it will be important to help brokers get the right education and experience.

Sharon Piening New CAFBA treasurer Sharon Piening is an asset finance broker with more than 20 years’ experience and a director at Melbourne brokerage The 500 Group.

She joined the CAFBA board in late 2019.

“It has been a rewarding experience, and I feel privileged to have the opportunity to work with

other amazing business owners and thought leaders,” Piening says. “[As treasurer] I look to maintain a strong balance sheet and good governance so that we can continue to support, and advocate, on behalf of our members and their clients.”

Piening says pathways and support for aspiring female brokers need to be created, and this prompted her to join the 12-month advanced section of the Women in Leadership Scholarship program, which she is due to complete next month.

“I believe taking on the scholarship program will provide me with the skills to facilitate this change.”

Piening says the program content www.brokernews.com.au

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is highly relevant to her role, with specific topics, lessons and training helping to improve her leadership. “[It] has enhanced my business knowledge and capability to help me deliver better outcomes for clients and my team,” she says.

“The coaching and facilitators are amazing. They created a comfortable and supportive environment, which in turn meant participants were highly engaged and actively involved.”

Piening wants more women to join the scholarship program and networking forums.

“I would say go for it. The tools in

membership over the next two years, a goal she says is achievable.

“I am passionate about diversity and the need for more women to be given the opportunity to take on leadership roles within our industry. I believe it is critical for CAFBA to promote both gender and ethnic diversity in our industry so that we are more reflective of the Australian community.”

Rebecca Mansfield New CAFBA board member Rebecca Mansfield, 30, is a relative newcomer to the industry. She has been a broker at Loan Market in

“I hope my involvement at board level will help other young people want to start their career in commercial and asset finance” Rebecca Mansfield, board member, CAFBA this program are designed to stretch you beyond your comfort zone.

It challenges you to develop your critical thinking abilities and unlock your full potential. “[At the forums] we welcome not only female brokers but also female support staff and female staff from the lenders so women in the industry can form their own networks and relationships.

“The aim is to help women be cognisant of the career pathways available in commercial and asset finance, to feel supported and encouraged to take the next step in their career journey.”

Piening says it is critical that CAFBA continues to educate its members and those new to commercial finance, given the evolving nature of the industry and customer and lender expectations.

She wants to double female 20

Sydney for three years, starting out in residential and diversifying into commercial.

Mansfield says she joined CAFBA to “ensure I was making the transition the right way by getting all the necessary education and qualifications”.

“CAFBA really supported this through their Cert IV in Commercial & Asset Finance Brokers course,” she says.

“I also saw joining CAFBA as a way to network with other brokers and to build relationships with lending partners. I’ve realised that relationships are so important in this industry.”

As a board member, Mansfield wants to work on ways to “encourage younger brokers to enter this wonderful industry”.

“I’m very big on education and providing the right support,

CAFBA EDUCATION COUNCIL

Courses: Certificate IV in Financial Services (FNS41815): Specialising in Commercial & Asset Finance Diploma of Financial Services (FNS51815): Complex Issues in Commercial Lending An Australianised version of the US Certified Lease and Finance Professional course Foundation partners: CAFBA, FAST, CommBank, NAB, Westpac, ScotPac, AFG, Get Capital, Flexi Commercial, Macquarie Bank, the Australian Finance Industry Association Strategic partners: ANZ, BOQ, Classic Funding, Zip, NFC Aggregation, Pepper Group Industry partners: PLAN, Judo Program delivery: Institute of Strategic Management The council is chaired by CAFBA patron Terry Moody, with vice chair Rob Ryan, head of FAST NSW/ACT and Qld.

which I know is a massive focus of CAFBA’s,” Mansfield says.

“I hope my involvement at board level will help other young people want to start their career in commercial and asset finance.

“Our clients are so diverse, so it’s important CAFBA recognises this to make sure they are adequately supporting clients with a variety of needs. We would be missing a trick if we didn’t foster diversity.”

Mansfield will start the advanced leadership scholarship program next month.

“I contacted a few women who had previously undertaken the course to learn about their experience. All the feedback was incredibly positive,” she says.

“I’m really looking forward to networking with other women in leadership positions, especially from other industries, as I think we can learn so much about other ways of doing things from outside our industry.

“Secondly, the course content is so timely for where my business is at. I’ve just started building my team, so the modules regarding empowering teams and leadership mindset will really assist me on this journey.”

Mansfield has also attended the women’s networking forums in Sydney.

“Running your own business is lonely at times, and it’s great to be surrounded by other motivating women,” she says. AB

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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 Scott Roberts, director of Queensland-based specialist commercial finance broker IBN Direct, called on his 35 years of experience in the industry to help a client with a complex and challenging commercial property purchase involving a tight time frame and council planning issues THE FACTS

Client Male, aged 42

Loan size and term $1.4m; 6 months with a 3-month option

Goal Location To settle commercial Southeast property and allow Queensland purchaser time to make refinance bankable

Aggregator None

property to him and thought this might pique his interest.

It did. The purchaser was excited to act on the property, but only days prior had settled a new commercial purchase that left him enthusiastic but short on cash.

He approached a few people in his network to put the word out. Within two days, a new external silent cash investor was brought on in exchange for a

THE SCENARIO

We recently assisted a client with an off-market commercial property purchase in Southeast Queensland. The proposal came with some unique challenges to be taken into consideration when placing the deal.

The security property was an industrial warehouse that was zoned mediumimpact industry. The vendors were under pressure to sell due to LVR policy changes at their bank.

The property also had issues related to informal and undocumented lease arrangements, and unresolved town planning-related issues with the local council regarding road widening at the front. In its favour, the property was prime for a subdivision or revamp, or both – something that helped get the deal across the line.

Given the pressure from their bank, the vendors didn’t have the time to list and market with a real estate agent. Instead, they contacted local real estate and property buyers’ agents and requested they reach out to their networks to find a purchaser.

The short time frame also meant that a valuation was unlikely to be completed, significantly impacting the future purchaser’s ability to conduct full and thorough due diligence.

It was apparent that this was not going to be a typical bank deal; either a cashed-up purchaser had to be found or specialist lending would be required.

Luckily, one of the agents knew someone in the market for commercial property.

He had recently sold a commercial

Lender Private panel lender

A short-term loan was the preferred option for the purchaser. It allowed him the opportunity to settle the loan quickly while giving a little breathing room to formalise the leases in preparation for refinancing to his bank.

Our specialist lender saw the value in the site, without the valuation, and appreciated that a quick settlement was required.

The property is now fully leased and returning 8%. Negotiations with the council have also been completed, and a positive outcome has been arranged for all parties regarding the road widening, further enhancing the bankability of the deal.

Our ability to truly understand the deal, the goals and the timeline of the borrower ensured that we were best placed to assist with placing the deal.

The lender provided a short-term facility of $1.4m over six months with a three-month option at 11% per annum.

THE TAKEAWAYS

A deal like this comes with a raft of challenges. Knowing and understanding these challenges from the outset enabled us to structure a deal that provided the

This was not a typical bank deal; either a cashed-up purchaser had to be found or specialist lending would be required separately titled, newly created lot to be established within the property.

Given the limited due diligence time frame, the purchaser made an offer to the vendor that was reflective of his risk.

THE SOLUTION

Scott Roberts Director, IBN Direct

As we workshopped the deal, the potential to resettle the leases became apparent, as did the opportunity to negotiate with the council regarding the road widening.

This allowed the purchaser to proceed in a structured manner, maximising the potential of the site and creating a more valuable and bank-attractive asset for the future refinance.

We structured the facility to include a prepaid interest and fees allowance within the loan to allow the purchaser to focus his efforts and cash on obtaining the required development application.

purchaser with the means to facilitate their project. The purchaser needed to find a silent partner to invest the shortfall.

They had concerns over the state of communications with the council regarding the road widening. It was the middle of 2020, COVID-19 was in full force, and banks weren’t interested in lending for commercial property. The short time frame the vendor required for settlement meant that full due diligence could not be completed.

A deal like this only works when all parties are collaborating. When everyone is clear on the outcome and the role they play in achieving that outcome, they can bring their full set of skills to the table and work together to problem-solve, tap into each other’s networks and find the right solution for the client.

We are delighted to have been a part of the team on this deal. AB www.brokernews.com.au

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21

1/02/2021 9:00:32 AM

FE AT URES

NE WS ANALYSIS

SOLUTIONS FOR STRUGGLING SMES

Australia’s small business ombudsman is calling for a federal government-backed loan scheme to help SMEs survive the next 12 months as JobKeeper and rent relief come to an end. Non-bank lenders are also offering support with SME resources and products

Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, says access to finance in the year ahead could mean the difference between life and death for many small businesses.

She says SMEs will have to deal with government support measures being withdrawn, rent relief ending, banks continuing their onerous credit assessment processes, and the effects of lockdowns and border closures.

“Unfortunately, it’s a perfect-storm scenario. especially for those small businesses that haven’t been able to fully recover from the COVID crisis,” says Carnell.

“Access to credit will be critical to keeping those otherwise-viable small businesses afloat, particularly THE

over the coming months as support measures are phased out and the bills start flowing in again.”

Carnell is urging the federal

loan when their turnover reaches a designated level.

The loan would be capped at a percentage of the business’s annual

“Small businesses can be reassured that dedicated lenders such as OnDeck are available that take a very different approach to SME finance” Cameron Poolman, CEO, OnDeck government to fund a revenuecontingent loan program for small businesses (similar to HECS), requiring borrowers to repay the

revenue. Applicants would need to satisfy a viability test conducted by an accredited adviser to be eligible.

“Sudden lockdowns and border

BUSINESS OPERATING CONDITIONS DETERIORATING 1 MARCH—26 AUGUST 2020, BY INDUSTRY % decrease in employees paid since 1 Mar 20

% decrease in weekly emailed invoices since 1 Mar 20

Arts and recreation services Education and training Accommodation and food services Rental, hiring and real estate services Administrative and support services Information media and telecommunications Healthcare and social assistance Transport, postal and warehousing Financial and insurance services Professional, scientific and technical services Manufacturing Retail trade Electricity, gas, water and waste services Construction Agriculture, forestry and fishing 0%

5%

10%

15%

20%

25%

30%

35%

40%

Source: MYOB Small Business Health Index August 2020; ASBFEO

22

closures have heavily impacted small businesses in recent weeks.

It’s no wonder they are scared to take on additional bank debt given conditions can deteriorate so rapidly,” Carnell says.

“The fallout of insufficient working capital could be devastating, not only for small business owners and their staff but for the broader economy.”

ASIC data shows external administrator appointments were up by 23% in December, and economists predict the number of businesses entering voluntary administration to rise this year.

Carnell says a revenue-contingent loan scheme would give small businesses the confidence they need to seek funding so they can survive and employ again.

“It’s essential to Australia’s economic recovery,” she says.

Non-bank lenders OnDeck and Prospa specialise in funding SMEs. They appreciate the difficulties small businesses face when trying to access credit, and have designed products and procedures to meet their needs.

OnDeck CEO Cameron Poolman says the lender support measures are aimed at helping the small business community.

“It’s great to see the ombudsman considering initiatives that make it easier for SMEs to access capital,” Poolman says. “We would be interested in knowing more about how such a scheme would work.”

It’s OnDeck’s view that tailored financial support should remain for those industries heavily reliant on the international sector, such as tourism and education, which continue to be hard hit by the pandemic.

Prospa chief revenue officer Beau Bertoli agrees. He says

www.brokernews.com.au

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1/02/2021 10:02:36 AM

From left: Kate Carnell, Australian Small Business and Family Enterprise Ombudsman; Cameron Poolman, CEO, OnDeck; and Beau Bertoli, chief revenue officer, Prospa

government support such as JobKeeper was key at the height of the pandemic and has been tapered and managed effectively to help small businesses in need.

“Most of the leading indicators for the economic recovery are now trending positive. We saw GDP growth of 3.3%, businesses are paying bills faster, and economists are reporting the jobs market is looking good, indicating that extending JobKeeper further is no longer a requirement.

“That said, there are certain sectors that continue to be hit really hard, such as tourism and entertainment, and we support more targeted support for those businesses,” Bertoli says.

Support for struggling SMEs In the absence of further support, SMEs need to look at ways to adapt where possible, Poolman says.

“OnDeck’s free online COVID Resource Hub has plenty of real-life studies that show how businesses have pivoted into new revenue opportunities or different product lines during the pandemic or used technology to adapt.”

Poolman says OnDeck has taken a very proactive stance during the pandemic, reaching out to customers with practical support.

“When hard lockdowns were first announced in March 2020, we experienced a rise in the number of customers experiencing a cash flow squeeze. However, we maintained constant communication with these businesses and provided bespoke support to each enterprise.

“We are currently back to normal delinquency levels, and in the final quarter of 2020 we saw an increase

of almost 90% in loan applications over the previous quarter.”

Bertoli says throughout 2020 Prospa offered relief packages to COVID-impacted customers, including partial and full deferrals, “working with our partners to provide the best support we could”.

“While there are still many small businesses doing it tough, we’re now seeing most small business customers recover faster and more strongly than anticipated,” he says.

“They’ve made it through a

He says traditional banks are not the only source of finance available to SMEs. “Small businesses can be reassured that dedicated lenders such as OnDeck are available that take a very different approach to SME finance.”

OnDeck offers short-term unsecured business loans ranging from $10,000 to $250,000.

“Our simple online loan application process, which requires six months of bank statements, is

“Prospa is 100% dedicated to small business – we understand the pain points, the short-notice opportunities, and the need for speed and service” Beau Bertoli, chief revenue officer, Prospa recession and likely the toughest trading conditions they’ll ever face, and with the economy rebounding, customers are starting to think about what’s next.”

How non-banks differ from banks Poolman says the ombudsman is accurate in saying that “banks are continuing to subject small business borrowers to onerous credit assessment processes”.

“OnDeck’s own research confirms that one in four SMEs get knocked back by the banks for commercial finance.

“Even among those that do get the green light for bank funding, 27% of SMEs have experienced negative impacts from a drawn-out application and approval process.

fast and efficient, and we can have funds to the business in as little as 24 hours,” Poolman says.

“Alternatively, SMEs can speak to their broker about an OnDeck loan.”

He says OnDeck also takes a forward-looking, data-driven approach to credit assessment using its proprietary credit-scoring methodology, OnDeck Score® – unlike banks, which make lending decisions based on past results.

Bertoli says whether small businesses need a line of credit to support cash flow or a loan to invest in growth, it can be difficult for them to access capital from banks and other traditional lenders.

“Historically it hasn’t been easy, and COVID has made it even harder.

This is why raising awareness about

alternative funding solutions is so important. Most small businesses don’t realise there are excellent alternatives to the banks,” he says.

“Prospa is 100% dedicated to small business, so we understand the pain points, the short-notice opportunities, and the need for both speed and service when it comes to customer experience. Our application process takes 10 minutes, and we can provide a response and funding in just 24 hours.”

Banks typically require asset security upfront, says Bertoli, but this often isn’t an option for small business owners.

“At Prospa, we don’t require asset security upfront to access up to $100,000, and that solves a massive obstacle for a lot of small business owners out there.”

Bertoli says Prospa’s line of credit is a great option, offering flexible access to funds.

“It’s a cash flow safety net, and you only pay interest on the funds you use, while you use them.”

Open borders What do Prospa and OnDeck think about calls for a nationally consistent approach to Australia’s border closures?

“The more certainty small businesses can get in this environment, the more confidence they will have to invest in themselves, new jobs and the economy,” Bertoli says.

“Different states have different risk appetites and strategies, but this makes it extremely difficult for small businesses to navigate and plan ahead.

“A national policy on hotspot definitions and responses would help boost confidence and empower more small businesses – especially those in tourism – to start investing and hiring for the future.”

Poolman says a nationally agreed approach to border closures would certainly support SMEs, especially in tourism-driven industries.

“That said, governments are all dealing with an evolving situation, which can change overnight.

“By acting on health advice, state governments are at least making rapid decisions. These decisions may not always seem to work in favour of small businesses, but as we have seen overseas, a slow response doesn’t just impact the economy and ultimately businesses, it can also cost lives.” AB www.brokernews.com.au

22-23_AB1802_News Analysis_SUBBED.indd 23

23

1/02/2021 10:02:48 AM

PEOPLE

Do you have a question for our broker mentors?

Email your question to:

antony.field@keymedia.com

BROKER ON BROKER

Vivienne Than is a senior mortgage broker at Home Loan Experts who specialises in niche loans. Winner of an excellence award in the Broker of the Year – Productivity category at the Australian Mortgage Awards 2020, she shares her views on BID and property tax, as well as her advice for new brokers

The NSW government is proposing an annual property tax. How will this affect the property market?

It is expected to bring forward A demand as homebuyers won’t have to save as much. If supply levels don’t change, this will increase competition and put upward pressure on prices.

There will also likely be increased demand from interstate buyers looking to invest and first home buyers looking to buy above the concessional stamp duty property price threshold. A long-term outlook on the NSW property market remains uncertain as the government is taking a hit on its coffers.

Q

What’s the best way for brokers to ensure that they comply with the best interests duty?

By educating ourselves and A then our customers. The three tenets of BID – act in the best interest of the customer; resolve any conflict of interests in their favour; and the conflict remuneration rule – will differentiate us from the banks.

Our customers will know that when dealing with us we’re acting in their best interest. Brokers must also establish a strong compliance process. That means taking notes after each conversation, establishing a timeline showing how you went from point A to B, keeping a record of what was agreed to and why, and most

Q

importantly, getting confirmation of the client’s decisions via email and saving those within your CRMs. With so much competition in the broking industry, how does a broker stand out from the crowd?

Focus on a particular market A or niche. Great brokers aren’t all things to all people; the best tend to focus on a niche.

Understand that you cannot do everything yourself. Brokers who’ll be successful will likely be those that focus on being brokers, ie by making sure that most of your time is spent talking to prospective customers, while letting someone else manage the administration, marketing and compliance. Utilising these resources has allowed me to spend more one-on-one time with my customers. My customers never feel like I’m rushing. This has not only allowed me to submit and settle more loans but it has also created a better customer experience.

Q

What advice would you give new brokers?

Find the right mentor. You can A wrap your head around credit policies fairly quickly. However, you really need that ongoing support and advice to effectively work with all stakeholders, including advice on how to work with a client from a different background who has different needs; how to approach BDMs or the bank to ask for an

Q

Vivienne Than, senior mortgage broker, Home Loan Experts

“Find the right mentor. You really need that ongoing support and advice to effectively work with all stakeholders” exception to lending policy, and how to build and maintain a referral network to generate more leads.

I recommend that you attend personal development or networking

events and be proactive in approaching other brokers. Or you can join an established brokerage such as Home Loan Experts to accelerate your development. AB

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

24

www.brokernews.com.au

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1/02/2021 9:03:31 AM

FE AT URES

OPINION

‘BUY LOCAL’ TREND WILL BOOST SMALL BUSINESSES More consumers are backing Australian businesses, and the federal government is spending $1.5bn to support local manufacturing. Linden Toll, CEO of invoice finance provider Apricity Finance, urges SMEs to capitalise on this momentum some optimistic economic data from early December 2020 indicating that the COVID-19 recession is over, now is the time for Australian SMEs to prepare themselves to hit the ground running as the economy begins to rebuild.

The pandemic quickly exposed the vulnerabilities of Australia’s manufacturing sector, particularly its over-reliance on imported products and the weakness of its domestic supply chains. The sudden spotlight on the sector highlighted that where Australians choose to spend their money can have a profound impact on the nation’s economic future and self-sufficiency.

International border closures have led to a rise in demand for domestically sourced goods and services. Businesses have had to look inwards and be resourceful as they deal with long delays in their overseas supply chains.

SMEs have a unique opportunity to scale their businesses to meet this emerging demand, particularly as the nation comes to grips with the new ‘COVID normal’ of regular infection clusters and constantly changing social restrictions.

COVID-19 has also brought the importance of having essential medical supplies available, which are required to respond to illness and infection, to centre stage. Medical supplies used in Australia are mainly sourced through a tedious international supply chain, with about 68% coming from the US and Europe.

In response to the closed international borders, the federal government said it was working with local industry to increase domestic production of medical protective equipment, such as face masks, sanitiser, surgical goggles and gowns.

Further, the $1.5bn Modern Manufacturing Strategy announced by Treasurer Josh Frydenberg aims to strengthen supply lines for essential goods and help manufacturers upscale their businesses. While Australia needs to innovate and create new industries to recover from the pandemic, supporting existing domestic manufacturing through

the Modern Manufacturing Strategy can make the most of Australia’s skilled workforce, realising their capability and increasing output across sectors such as mining and infrastructure.

Positioning Australian manufacturing for sustainable competitiveness is a long-term vision, and the government’s strategy is a 10-year plan. Its bolstering of the local manufacturing industry will both assist with the economic recovery and provide opportunities for SMEs. Data from McKinsey & Company revealed that consumers, especially those less financially affected by the restrictions, actively switched their spending to

WITH

forecasts that business investment will increase by 3.1% and public spending by 7.8%. The job market is also showing positive signs of recovery, with 300,000 people expected to return to work and more than 270,000 to gain jobs in 2021.

These indicators, along with the government’s investment, present opportunities for businesses. SMEs need to be reviewing their business plans and growth strategies to maximise these opportunities.

SMEs are increasingly looking at non-bank alternatives in sourcing finance that better suits their business needs.

Invoice finance is one such option,

SMEs are increasingly looking at non-bank alternatives in sourcing finance that better suits their business needs

Linden Toll CEO, Apricity Finance

prioritise buying from local businesses and producers as a result of COVID-19.

Buying from local manufacturers also plays a role in creating jobs and boosting the economy at every level, from local to national. The nation will always require some products to be imported, but the federal government’s priority needs to move further towards local manufacturing.

It’s taken the pandemic for the government to realise that processes must be put in place to reflect what manufacturing will look like in the world moving forward.

When it comes to making the most of government initiatives and resources, and accessing available funding, we encourage SMEs to speak to their trusted advisers.

As brokers, you have a key role to play in guiding your clients through the evolving business environment, and cash flow management will be more important than ever in steering SMEs through the aftermath of the pandemic.

Australia is in a good position as the recovery begins. Recent data from Deloitte

allowing SMEs to leverage their invoices to access their own funds sooner, without taking on additional debt.

At Apricity Finance, we understand the challenges of running a small business and how flexible thinking can help SMEs achieve growth. With our invoice finance solution, SMEs can take control of their cash flow so they not only survive but thrive.

In 2020, millions of Australians had to deal with adversity, from droughts to floods, bushfires and a global pandemic.

At the same time, they responded with generosity to those in need and ingenuity in business thinking.

Fiscal policy will strengthen the domestic manufacturing industry and boost supply chains post pandemic (amid the China trade turmoil) – but that’s just the first step. As onshore manufacturing increases beyond 2021, so too will the ‘buy local’ mentality. This consumer trend will last long after the pandemic, particularly as COVID-19 has highlighted the importance of SMEs to the Australian economy. AB www.brokernews.com.au

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1/02/2021 10:04:02 AM

DATA

NEW SOUTH WALES

TAS SPOTLIGHT

While vacancies in Sydney’s inner ring are stabilising, the market is a ‘mixed bag’ According to the latest report from the Real Estate Institute of NSW (REINSW), overall vacancies in Sydney dropped to 3.3% in December as confidence returned in the city’s inner ring.

However, there was a slight increase in vacancies in the middle ring and regional areas.

While the job market strengthened in December, tenants will still face tough financial conditions as government assistance payments come to an end.

This could potentially affect vacancies in parts of the city and state.

Interestingly, there was a slowing of the exodus to regional areas, with some markets already recording rising vacancies. Wollongong, for instance, reported an increase in the vacancy rate to 2.5%. Illawarra also posted an uptick to 1.5%.

“It’s clearly a mixed bag with Sydney’s inner ring settling down while an exodus from the middle ring [is] continuing, which may see tenants either returning to more popular city areas or abandoning the city altogether,” said Tim McKibbin, CEO of REINSW. Area

Metro (H)

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

7.2%

rent

yield

$540

2.9%

$977,250

1.6%

Metro (U)

$722,450

0.0%

3.1%

$500

3.6%

Country (H)

$520,000

2.0%

6.4%

$400

4.2%

Country (U)

$450,000

2.3%

6.0%

$360

4.3%

SOUTH AUSTRALIA

Adelaide is now the most affordable city for house rentals, but vacancies are falling While house rents in Adelaide increased in December, the pace at which they grew was slower than in Perth, which previously had the cheapest house rents, according to Domain.

Over the month, house rents in Adelaide increased by 1.2% to $410, while rents in Perth rose by 6.3% to $420.

In terms of units, Adelaide remained the most affordable city, with median rents stabilising at $340 in December.

However, the gains in Adelaide’s house rents could reflect its already-competitive rental market, which is expected to tighten further as vacancy rates continue to shrink. In fact, Adelaide’s vacancy rate in December declined on an annual basis, down from 1.1% to 0.7%, according to the latest data from SQM Research.

“Rental supply has been limited in recent years as subdued investor activity and apartment construction were constrained compared to other cities,” the report said.

Area

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Metro (H)

$501,000

2.1%

3.2%

$390

4.1%

Metro (U)

$375,000

1.4%

3.2%

$335

4.7%

Country (H)

$283,750

1.1%

1.1%

$270

5.0%

Country (U)

$202,000

-2.4%

-4.7%

$210

5.3%

26

HIGHEST PROFITS IN HOBART Hobart continues to be the most profitable capital city in terms of dwelling sales, according to CoreLogic latest Pain and Gain Report, which captured market activity data during the September 2020 quarter, showed that 96.6% of dwelling sales in Hobart turned a profit. The city has retained the highest rate of profitability of all capitals since March 2018.

Units in Hobart reported a higher proportion of profit-making sales (97.1%) than houses (96.5%). However, in terms of capital growth, houses still performed better.

While the Sorell and Derwent Valley council regions saw 100% of properties sell for profit in the September quarter, the Hobart council region produced the best results for sellers. In fact, Hobart returned a median profit of $285,000, higher than Sorell’s $204,000 and Derwent Valley’s $141,250. Overall, values in Hobart ended the year at 6.1% annual growth, with a median price of $513,000.

In terms of rentals, separate reports from Domain and SQM Research showed that Hobart had the tightest rental conditions of CORELOGIC’S

all capital cities. In fact, Hobart maintained its 0.6% vacancy rate in December. Over the last quarter of the year, house rents increased by 2.2% to $460, while unit rents remained stable at $400.

The growth in house rents was a little reprieve from the steep double-digit annual increases that led to a record-high rent of $470 in March last year. Unit rents, on the other hand, were $20 lower than the record high in March.

However, it is interesting to note that Hobart is the only capital city to record lower house rents than in pre-pandemic March, and its unit rental market was the third hardest hit behind Sydney and Melbourne, according to Domain.

Still, despite the slowdown in price hikes, the Hobart market remains competitive for tenants.

Over the past five years, house and unit rents have reported steep respective gains of 35% and 43%. Domain predicts that vacancies are likely to remain low in this capital city, giving landlords strong grounds to raise rents.

HOBART HOUSING MARKET INDICATORS — JANUARY 2021 Source: CoreLogic

New listings (-23.7% y/y):

164

Total listings (-27.5% y/y): 631

Houses

118

$566,000

34 days

Private sales

Median price

Time on market

Units

35

$420,000

35 days

Private sales

Median price

Time on market

SUBURB TO WATCH: CLAREMONT Median price (houses) $400,000

Median price (units) $337,500

12-month growth 7%

12-month growth 7%

3-year growth Average annual growth 36%

Gross rental yield

4.9%

5%

Average annual growth Weekly advertised rent

Gross rental yield

5.8%

$350

5%

www.brokernews.com.au

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1/02/2021 10:05:27 AM

AUSTRALIAN CAPITAL TERRITORY

With record-high rents, Canberra’s rental market is expected to remain competitive According to a Domain report, house and unit rents in Canberra reached new record highs by the end of last year, jumping by 3.4% to $600 and 3.1% to $495, respectively.

The city is now the most expensive capital for rentals in Australia. This is the first time in 10 years that it has had the highest unit rents of all capitals.

While Canberra posted a monthly increase of 1.1% in vacancy rates in December, vacancies were still lower than last year’s 1.7%.

“Tenants will find securing a lease remains competitive, and some may have to resort to offering above advertised asking rents,” the report said. However, the city remains attractive to tenants and investors, given that it is relatively insulated from the impacts of COVID-19.

“The territory has fewer international arrivals relative to other cities impacting rental demand to a lesser extent. Having a strong public service employment base has meant minor job losses compared to that seen in the private sector,” the report said.

Area

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Metro (H)

$750,000

2.9%

7.5%

$580

4.2%

Metro (U)

$475,000

1.1%

4.7%

$480

5.5%

WESTERN AUSTRALIA

Suburbs in WA saw a significant jump in sales in a month that’s usually slow

HIGHEST-YIELD SUBURBS IN TASMANIA Suburb

House

Gross rental yield

Median price

Quarterly growth

12-month growth

Average annual growth

QUEENSTOWN

H

10%

$92,000

0%

19%

2.5%

ROSEBERY

H

10%

$95,000

11%

9%

3.2%

HADSPEN

U

10%

$160,500

-2%

-6%

-11.1%

ZEEHAN

H

9%

$125,000

-2%

38%

7.2%

WAVERLEY

H

8%

$202,500

-1%

1%

2.3%

HERDSMANS COVE

H

7%

$260,000

4%

16%

8.6%

ACTON

H

7%

$212,000

7%

18%

2.3%

Damian Collins, president of the Real Estate Institute of WA, said December had traditionally been known as one of the slower months for property sales.

“In 2020, this has not been the case and we have started to see a different trend emerge with sales activity in December increasing 42.5% compared to the previous year,” he said.

House sales during the month increased by 50.5% and unit sales by 51%. Land sales also grew by 4.3%. However, the growth in land sales, Collins said, was “not unusual”, considering the significant increase in the segment in mid-2020 due to several government grants.

Of all suburbs, Banksia Grove performed the best in terms of sales activity, recording 157% growth. It ended the year with a median sale price of $371,000.

This was closely followed by Fremantle with a 100% increase in sales and a median of $767,500. Erskine (38%), Yanchep (30%), and Mount Hawthorn (29%) also posted gains in sales activity.

Area

UPPER BURNIE

H

7%

$251,500

4%

5%

2.1%

GEORGE TOWN

H

7%

$205,000

3%

11%

2.4%

MAYFIELD

H

7%

$190,000

7%

4%

2%

Metro (H)

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

$500,000

1.3%

0.2%

rent

yield

$380

4.1%

Metro (U)

$372,500

0.7%

0.0%

$345

4.8%

Country (H)

$370,000

3.9%

7.7%

$360

5.3%

Country (U)

$235,000

5.0%

-0.9%

$310

7.7%

www.brokernews.com.au

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1/02/2021 10:05:35 AM

DATA

NORTHERN TERRITORY

Strong take-up of the BuildBonus grant has prompted an extension of its deadline The NT’s BuildBonus grant – launched in February 2019 and initially scheduled to end in December 2020 – has received 720 applications, with more than 550 approved. Roughly $11m in grants were paid to applicants from inception to the initial deadline, yielding over $220m in building activity and resulting in an extension of its application deadline to March.

Chief Minister Michael Gunner said the grant had helped many aspiring homeowners break into the real estate market. “People are choosing to stay longer in the Territory, and more people are moving [here] and choosing to call it home,” he said.

Gunner believes the grant has presented opportunities for tradies, and he expects they will see a greater flow of work due to its extension.

“The territory’s real estate market is booming for the first time in years, and we want to capitalise on this opportunity and make the territory the best place to build and own a home,” he said.

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Metro (H)

$500,000

2.1%

0.0%

$450

4.9%

Metro (U)

$295,000

1.8%

-3.3%

$370

6.6%

Country (H)

$435,000

3.3%

0.0%

$493

6.1%

Country (U)

$249,000

-4.0%

-4.8%

$370

6.4%

Total auctions (Dec qtr 2020)

1,014

Clearance rate

67.1%

Total auctions (Dec qtr 2019)

1,385

Clearance rate

57.4%

PERTH Total auctions (Dec qtr 2020) Clearance rate

245 50%

Total auctions (Dec qtr 2019) Clearance rate

517 39.5%

Houses

Units

Sydney

Melbourne Brisbane

Adelaide

Perth

Darwin

$511,500

$793,500

$570,000

$446,000

$560,000

Hobart

$285,000

$0

$385,000

$100,000

$470,000

$200,000

$362,500

$300,000

$508,000

$500,000 $400,000

$398,750

$700,000 $600,000

$511,500

$800,000

$570,000

$900,000

$693,500

According to the latest report from the Real Estate Institute of Victoria, median house prices in Melbourne have surpassed $900,000 for the first time, jumping by 9.5% to $941,000 over the December quarter.

Households found an opportunity during the lockdown to make some upgrades and renovations, boosting the value of their homes. This was apparent in the middle-ring suburbs of Melbourne, where prices increased by 8% on a quarterly basis to $1.06m. Units values in Melbourne also increased over the quarter, up by 2.5% to $639,500.

Regional Victoria also posted substantial growth figures, the highest since 2003. Dwelling values increased by 9.2% for houses and 3.5% for units.

The property sector reported a surge in activity during the December quarter, following the lifting of intensive lockdowns. Over the three-month period, around 29,500 transactions were recorded.

This exceeded the number reported in the first quarter of 2020.

Canberra

CAPITAL CITY HOME VALUE CHANGES Capital city

Weekly change

Monthly change

Year-to-date change

12-month change

Sydney

0.1%

0.2%

0.1%

2.1%

Melbourne

0.2%

0.3%

0.3%

-2.0%

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Brisbane

0.3%

0.8%

0.6%

3.9%

Adelaide

0.2%

0.7%

0.6%

6.3%

Perth

0.4%

0.8%

0.8%

2.5%

0.2%

0.4%

0.3%

1.4%

Metro (H)

$747,000

0.1%

5.6%

$430

3.0%

Metro (U)

$585,000

0.1%

6.0%

$420

3.7%

Country (H)

$422,500

2.6%

8.1%

$350

4.6%

Country (U)

$312,000

1.6%

8.8%

$300

5.0%

28

ADELAIDE

MEDIAN HOUSE AND UNIT PRICES

Victoria’s housing market has recorded its biggest price growth since 2000

Area

The combined capital city clearance rate continued to strengthen in the December quarter, while auction volumes increased by 44%. The combined capital city clearance rate was 69.4% over the quarter, making it the best-performing quarter of 2020. The March 2020 quarter had a clearance rate of 62.5%, followed by 47.9% in Q2 and 59.2% in Q3.

Auction volumes increased by 44.1% in the December quarter, with 20,489 homes taken to auction, up from 14,216 over the September quarter; 65.2% of the uplift can be attributed to the resurgence of auctions in Melbourne.

COVID-19 restrictions subdued consumer sentiment, creating pent-up demand from vendors looking to sell towards the end of 2020.

While the December quarter was the busiest period of 2020, volumes were significantly lower than the December 2019 quarter, when 26,923 homes went to auction. Of the 20,411 auction results collected, just 8.9% reported a withdrawn result, compared to 18.7% over the September quarter. Of the sold results, 36.8% were sold prior to auction, compared to 42.0% over the September quarter.

$645,000

VICTORIA

DECEMBER QUARTER 2020

$837,500

Area

QUARTERLY AUCTION MARKET REVIEW

Combined 5 capitals

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

www.brokernews.com.au

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BRISBANE Total auctions (Dec qtr 2020)

CANBERRA

Clearance rate

Total auctions (Dec qtr 2020) Clearance rate

1,134 80.7%

Total auctions (Dec qtr 2019) Clearance rate

1,194 53.1%

Total auctions (Dec qtr 2019)

1,615

Clearance rate

45%

937 68%

SYDNEY Total auctions (Dec qtr 2020)

9,461

Clearance rate

71.5%

Total auctions (Dec qtr 2019)

9,546

Clearance rate

74.9%

TASMANIA

MELBOURNE Total auctions (Dec qtr 2020)

Total auctions (Dec qtr 2020)

7,415

Clearance rate

68.5%

Clearance rate

Total auctions (Dec qtr 2019)

12,870

Total auctions (Dec qtr 2019)

Clearance rate

72.8%

Clearance rate

26 69.2% 53 62.2%

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

QUEENSLAND

Area

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Brisbane units are now more expensive to rent than units in Melbourne Over the December quarter, unit rents in Brisbane increased by 1.3% to $400, a Domain report shows. For the first time in five years, its unit rents have surpassed those in Melbourne, where rents declined by 3% to $388.

The increase in Brisbane rents came in spite of relatively weakened demand for innercity apartments due to the absence of overseas migrants and tourists. The city’s house rents also reached a new record high, increasing by 2.4% to $425. Two consecutive quarterly gains have resulted in the steepest annual increase in seven years for houses.

Overall, demand for rentals in Brisbane remains strong, driven by relocations to Brisbane amid COVID-19 and the resumption of local and interstate short-term travel.

This could potentially tighten its vacancy rate and push rents up even further.

“A rebounding jobs market and lifestyle locations will continue to see accelerated demand, factors that are likely to drive significant rent rises,” the report said.

Metro (H)

$560,000

0.9%

280%

$410

3.9%

Metro (U)

$399,000

0.0%

0.0%

$385

5.1%

Country (H)

$458,000

1.0%

1.0%

$400

4.6%

Country (U)

$396,000

1.9%

3.5%

$350

4.7%

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

NICK YOUNG: TRAIL BOOK SALE EXPERT Sell your trail book in part, or in full.

Release working capital. Keep your clients.

03 8508 6666 | 0417 392 132 | nyoung@trailhomes.com.au | trailhomes.com.au www.brokernews.com.au

26-29_AB1802_Housing_Market_Data_SUBBED.indd 29

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1/02/2021 10:06:22 AM

PEOPLE

Aggregator Finsure

IN THE HOT SEAT

Sheena Briffa only started her broking career at Brisbane-based borro (formerly CGIO Finance) in November, but with the guidance of founder Cara Giovinazzo she submitted $2.9m worth of loan applications in just her first month

You have just started out in the broking industry. Tell us how you became a broker.

It was always an industry I had been interested in A and very much intrigued by. I love working with numbers, problem-solving and being able to help people, which is everything we do as mortgage brokers. When my family and I moved to Queensland and I read the job description at borro, I just knew it would be suitable for me. At my interview meeting with Cara Giovinazzo, I found that she was so lovely and understood my ambitions to one day step out of my client service manager role and become a mortgage broker. I was ecstatic when I received the call that I had been successful. Starting my career in the mortgage broking industry under such an amazing and talented mortgage broker as Cara has given me fantastic opportunities to be successful.

Q

Sheena Briffa, finance and mortgage broker, borro

How have you been supported in your new role by your employer?

A Cara has supported me since day one, helping me to grow in my client service manager position and step up to a mortgage broking role. Cara continues to encourage training and explains and talks through different scenarios with me. I think the biggest way she has supported me in my new role is by enabling me to move forward in my career, and by always being there if I need assistance.

Q

do you enjoy most about Q What being a broker?

It’s exciting and challenging at the same time. No two days are A the same, and no two client scenarios are the same. I love helping clients, whether they’re looking for their first home or their 10th investment property. We are helping to change their life, and that is pretty amazing.

30

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

The complexity of the role, with each bank having such different A policies and looking at each scenario so differently. Although this can be challenging, it is also what keeps the role interesting and motivating. To accommodate this, when meeting with clients I need to make sure I get a really thorough understanding of their overall position, their goals and requirements, to make sure I can make appropriate recommendations that suit their needs and also align with the bank’s policy.

Q

What goals do you want to achieve in broking?

I’d love to hit $50m in my first year and eventually become a top A broker. I want to grow my clientele and have lifelong clients. I just hope to be as successful and knowledgeable as Cara. It may sound a little clichéd, but the knowledge she has passed on to me is very inspiring, and I hope to one day be able to help other young brokers coming into the industry. AB

Q

www.brokernews.com.au

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1/02/2021 2:20:11 PM

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1/02/2021 2:20:25 PM

SWITCHING PAYS Refinance cashback

3000

$

Switch your client’s home loan to Westpac and they could get $3000

First refinance application. Apply by 31/03/2021.

Owner Occupier P&I and Investment Loans.

Premier Advantage Package ($395 annual fee) and Flexi First Option Loans. Max LVR 80%. Min loan $250k. T&Cs, exclusions, fees apply.

westpac.com.au/brokers

Things you should know: Credit criteria, fees, charges apply. T&Cs available at Westpac. Offer current as at 18/09/2020. Apply by 31/03/2021 and settle by 30/06/2021. Available on Owner Occupier Principal and Interest repayments and Investment Loans. Only 1 $2,000 cashback per property refinance will be paid regardless of the number of loans involved.

Only 1 $1,000 bonus cashback will be paid for the initial application regardless of the numbers of customers, properties or applications involved. Offer may be varied or withdrawn at any time. Minimum loan size $250k. Excludes Equity Access Loans, switches and refinances of home loans within the Westpac Group which include St.George, Westpac, Bank of Melbourne, BankSA and RAMS. Offer not available for Owner Occupier Interest Only loans or residential lending originated under family or company trusts. Premier Advantage Package terms and conditions apply. $395 annual package fee applies and is payable from an eligible Westpac Choice transaction account. You must hold a Westpac Choice transaction account to qualify and receive the benefits of the Premier Advantage Package. Read the Westpac Choice transaction account terms and conditions and consider if it’s right for you.

See westpac.com.au. The cashback will be paid into a Westpac Choice transaction account within 60 days of settlement. The transaction account must be linked to the home loan at the time of settlement and kept open for 60 days after settlement. Tax consequences may arise from this promotion for investors and customers should seek independent advice on any taxation matters. © Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.

21052/0121

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