Australian Broker 17.19

OCTOBER 2020 ISSUE 17.19

The Australian Mortgage Awards, to be held on 16 October 2020, may be presented a little diff erently this year, but one thing hasn’t changed: the high calibre of talent on display /14 ALSO IN THIS ISSUE… Big deal Personal debts, a poor credit score and a low valuation – this deal had it all! /18 Keeping pace with tech COVID-19 has propelled the industry towards tech adoption /23 Westpac eases COVID policy The big four bank takes an about-turn on some credit policies, winding them back to pre-pandemic levels /04

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Aggregator’s clawback An aggregator says amendments to its clawback structure will make it ‘far fairer’ for brokers /12

Forecast for growth The shifting view of the housing market as property experts predict slower price declines – and even growth ahead /20

In the hot seat For broker Kathy Dundas, financewill always be her ideal career /30

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NEWS

IN THIS SECTION

Lenders Westpac begins to ease COVID credit policy /04

Industry groups Six-month loan assessments kick off as deferrals end /06

Market New home construction expected to lift /10

Aggregators AFG amends clawback structure to make it ‘fairer’ /12

Technology AI will be key to prepping for BID, says aggregator /08

www.brokernews.com.au OCTOBER 2O20 EDITORIAL

SALES & MARKETING

Editor Sarah Megginson

Publisher/Sales Manager Simon Kerslake

News Editor Madison Utley

GLOBAL WATCH How is the mortgage and broking world responding to the COVID-19 pandemic overseas?

Here’s your snapshot of the news that matters most to the mortgage industry in North America

RENTERS, MORTGAGE HOLDERS STILL BEHIND ON PAYMENTS Americans are still having trouble meeting their housing payments as the financial impacts of COVID-19 continue to put the squeeze on homeowners and renters. Despite a slight improvement on August figures, 29% of Americans failed to pay their mortgage or rent in full during the first week of September, while 8% still hadn’t made their August payment, according to a new study from Apartment List.

“As the situation [COVID-19] rapidly evolves, widespread difficulty with housing costs has been a troubling constant,” wrote study co-authors Igor Popov, Chris Salviati and Rob Warnock. However, homeowners seem to be faring better than renters. Seventy-three per cent of homeowners made an on-time mortgage payment in September, up from 68% in August.

MANY

Production Editor Roslyn Meredith

ART & PRODUCTION

Global Head of Communications Adrijana Monevska

CORPORATE

Designer Jommel Ramos

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

U.S. MORTGAGE RATES FALL TO NEW RECORD LOW rates in the US hit an all-time low in September, according to new data from Freddie Mac. The 30-year fixed rate mortgage averaged 2.86%, according to Freddie’s Primary Mortgage Market Survey. That’s the lowest rate in the history of the survey, which dates back to 1971. “Mortgage rates have hit another record low due to a late summer slowdown in the economic recovery,” said Sam Khater, Freddie Mac’s chief economist. “These low rates have ignited robust purchase demand activity, which is up 25% from a year ago and has been growing at double-digit rates for four consecutive months. However, heading into the fall it will be difficult to sustain the growth momentum in purchases because the lack of supply is already exhibiting a constraint on sales activity.”

MORTGAGE

tel: +61 2 8311 5831 fax: +61 2 9439 4599 subscriptions@keymedia.com.au

ADVERTISING ENQUIRIES

Simon Kerslake +61 2 8437 4786 simon.kerslake@keymedia.com.au Key Media 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, Manila, Singapore, Seoul

AIRBNB CEO SAYS COMPANY NEEDS TO CHANGE flights grounded from one side of the planet to the other, many Airbnb investors lost WITH the only reliable method for making their properties cash flow positive. Now, with Airbnb having already lost $1bn since the beginning of the pandemic, CEO Brian Chesky – who like thousands of investors saw in the platform an endless supply of above-market rents – has to rethink Airbnb’s relationship to real estate. In a recent feature published in The Times in the UK, Chesky largely admitted that the criticism levelled at the company for depleting housing supply, driving up rents and encouraging overtourism had been valid. “We grew so fast, we made mistakes,” he told The Times.

“We drifted. We really need to think through our impact on cities and communities … Airbnb needs to change.

We need to go back to basics – to what really made us successful in the first place.”

This magazine is printed on paper produced from 1OO% sustainable forestry, grown and managed specifically for the paper pulp industry Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Australian Broker magazine can accept no responsibility for loss. Australian Broker is the most-often read industry publication, according to independent research carried out by the Ehrenberg-Bass Institute for Marketing Science at the University of South Australia in December 2008. The research also found that brokers rate Australian Broker as the best for both news content and feature articles, followed by sister publication MPA. Overall, on all categories, Australian Broker ranks top followed by MPA. The results were based on a sample of 405 respondents who were the subject of telephone interviews.

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NEWS

LENDERS RESIMAC TEMPORARILY WAIVES VALUATION FEES

WESTPAC LOAN POLICY CHANGE Source: Westpac

non-bank has announced that, for a limited time, it will waive the standard valuation fee for its specialist full-doc and alt-doc products.

The offer from Resimac, which could see certain customers saving up to $330, aims to lower the barrier to securing a home loan by eliminating this upfront fee. GM of third party distribution Daniel Carde says the offer complements the group’s suite of specialist lending products that aim to meet the needs of borrowers who fall outside traditional lending guidelines.

A

ME BANK SEES SUBDUED HOME LOAN GROWTH has reported subdued home loan growth in FY2020. The company settled $5.5bn in home loans during that period, down 15% on the previous year, and its home loan portfolio has grown by 2% to $25.5bn.

“In the hypercompetitive home loan market in the second half of the year, new business slowed, and we experienced outflows as a result of the ultra-low rates and large cash-backs being offered by some competitors,” said Adam Crane, acting CEO at ME. ME

“Australia is going through a challenging time. [We] are a strong bank and are determined to assist our customers through these extraordinary times” Peter King CEO, Westpac

4

80%

60%

Shading on loan applicants’ non-base income returns to pre-pandemic level of 80%

Shading on borrowers’ bonus income remains the same

WESTPAC EASES CREDIT POLICY TO PRE-PANDEMIC LEVELS The big four bank has wound back some of the tighter loan serviceability criteria it introduced in response to the COVID-19 crisis having tightened its credit policy on multiple occasions in response to the economic uncertainty surrounding COVID-19, Westpac has eased certain metrics for assessing customers’ loan serviceability, returning them to “pre-pandemic levels”.

The policy changes went live at the major bank, along with its subsidiaries Bank of Melbourne, Bank SA and St. George, with effect from 20 September 2020.

They apply to applications for new loans from both new and existing customers, including applications for an increase to an existing loan, or any other activity that calls for a serviceability assessment.

AFTER

Many of the wind-backs were applied to changes that Westpac had introduced periodically since the onset of the pandemic, in response to the constantly changing conditions of the economy and the mortgage market.

Perhaps most notably, the shading on most types of customers’ non-base income has been adjusted back to 80% or “to pre-COVID-19 response” values, according to the bank.

Credit policy changes made

by Westpac in May reduced the non-base income serviceability assessment to a maximum of 60%.

This meant that a loan applicant’s overtime payment of $1,000 was considered to be worth just $600 by the bank.

These changes have been largely unwound, and income

classified as overtime, commission, director fees (other than from the customer’s own company), as well as car, shift and industryspecific allowances has all returned to 80% shading for the serviceability assessment of prospective borrowers.

However, bonus income will remain at 60% shading for the time being.

Additionally, the group’s credit policy has been updated to specifically include licensed letting agents on the list of those who may provide confirmation of rental income or rental history. This is in addition to a licensed real estate property manager or agent and applies to both mortgage insured and non-mortgage insured applications.

Lastly, Westpac has amended its policy to reflect that independent legal advice for income guarantees is now recommended rather than mandatory.

However, the expectation remains that brokers will continue to recommend that legal advice is sought.

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29/09/2020 2:41:46 PM

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NEWS

INDUSTRY GROUPS FINTECH AUSTRALIA COLLABORATES WITH EY body FinTech Australia has entered into a new collaborative agreement with EY Australia that will facilitate the firm’s further involvement in future fintech events, awards and studies of the fintech ecosystem. Previously, EY acted as the key research firm behind the group’s annual Australian Fintech Census; moving forward, its involvement will be extended and broadened. “We look forward to working more closely with EY to find other new and innovative ways to support the fintech ecosystem,” said FinTech Australia CEO Rebecca Schot-Guppy.

INDUSTRY

COURT: FINANCIER CHARGED EXCESSIVE INTEREST Federal Court has found that a used car financier acted illegally in providing high-cost credit to customers, charging some an interest rate of up to 77% per annum.

Rent 2 Own Cars (R2O Cars) failed to comply with the NCCP Act 2009 and was found to have taken advantage of vulnerable consumers. “R2O Cars engaged in misconduct by charging excessive interest and by misleading consumers about the true cost of the credit contract,” said ASIC Commissioner Sean Hughes. “ASIC considers it is important [to] protect consumers from predatory behaviour.”

THE

SIX-MONTH LOAN ASSESSMENTS KICK OFF AS DEFERRALS END It’s been a full six months since the banks introduced mortgage payment deferrals – which means it’s time for many borrowers to resume repaying their loans the more than 900,000 loans that have been deferred since the start of the COVID-19 pandemic, around 450,000 have reached or are approaching the end of their six-month repayment pause, and customers will have to decide on their next steps.

There were 65,000 loans to small and medium-sized businesses that needed to be assessed by the end of September, and 40,000 more will require attention by the end of October.

In terms of mortgages, 260,000 are due to be assessed in the next two months; 80,000 account pauses expired at the end of September and 180,000 more will expire by the end of October.

OF

Commercial Loans

Banks have been actively engaged in dealing with the large number of customers needing personalised assistance all at once.

“The loan deferral measure offered to customers by Australia’s banks has led to the largest ever customer contact process in the industry’s history, with an additional 5,000 new or redeployed staff working to ensure customers understand their options,” said Australian Banking Association CEO Anna Bligh.

As summarised by Bligh, customers will be presented with several possible next steps during the assessment calls, including: • resuming repayments at the end of the deferral period, if the

customer can afford to do so • restructuring or varying the loan, including converting to interest-only payments for a period of time or extending the term of the loan • a further four-month deferral in certain circumstances • ‘tailored assistance’ that addresses the needs of customers who are unable to pay their loan over the longer term “Customers know what’s best for them. It’s the bank’s job to set out all the options and implications and ensure customers have the information and the time to make the right decision to suit their needs,” said Bligh.

“As customers who are able to begin their repayments again, it allows banks to focus their support on those who really need it.”

Of a total of 900,000 loans that have had payments deferred, around 13% had already resumed repayments by the end of July, according to the ABA.

“It’s the bank’s job to set out all the options and implications and ensure customers have the information and the time to make the right decision”

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NEWS

TECHNOLOGY

AUSTRALIA A ‘STRONG FINTECH HUB GLOBALLY’ capital investment in Australia’s fintech sector has charged ahead, up 153% year-onyear according to KPMG’s Pulse of Fintech report. Investment in the sector reached $522.4m in the first half of 2020, with two of the largest fintech transactions involving Airwallex and Judo Bank. The former raised $222m in venture capital and the latter received $203.4m from private equity investors. “Australia is showing itself to be a strong fintech hub globally,” said Dan Teper, partner and head of fintech at KPMG Australia.

VENTURE

SURVEY RESULTS REVEAL NEED FOR TECH EDUCATION survey conducted by a lender that’s among the first to provide digital mortgages has shown that while more than 80% of finance brokers intend to rely on digital tools in the future, a significant subset have communicated a lack of knowledge and confidence in knowing how to best apply such digital solutions.

Advantedge Financial Services’ survey also named electronic loan enabler eSign (73%), ID tools such as IDyou and ZipID (78%) and Digital Mortgage Documents by MSA (62%) as the tools most likely to be used within the industry in the future.

A

“The AI can pick up trends in the [loan] file. If red flags are detected, we can raise this with the broker in real time in the submission process” David McQueen Chief compliance officer, Loan Market

8

AI WILL BE KEY TO PREPPING FOR BID, SAYS AGGREGATOR Artificial intelligence is going to be the industry’s secret weapon in implementing the best interests duty, according to Loan Market Loan Market has explained that its plan of attack to ensure broker compliance with the imminent best interests duty utilises a combination of data, artificial intelligence and machine learning.

According to the group’s chief compliance officer, David McQueen, its use of machine learning is an “innovative approach” to justifying brokers’ product recommendations.

“BID will require all brokers to prove their recommendations and activities were in accordance with the best interests of their customers,” said McQueen.

“Proof of compliance will be just as important as the act AGGREGATOR

of compliance in meeting the obligations.

“Where the brokers justify their recommendations for a product in their notes, machine learning examines the word count and looks for keywords to evaluate the strength of their explanation,” he added. “The AI can pick up trends in the file. If red flags are detected, we can raise this with the broker in real time in the submission process.”

This is where the group’s techdriven approach is complemented by the human touch.

“If the broker is deemed to have any risk or errors in their applications, our Broker Success Managers [BSMs] coach them

on what they may need to do to change,” said McQueen.

“The BSM shares with the broker their individual report so they can see where they’re falling short of BID standards; they can even see how they compare to the rest of the network through blind rankings.”

The chief compliance officer described the group’s approach to BID as “compliance by design”.

“We’ve always maintained that BID presents an opportunity for brokers to create stronger relationships with their clients,” he said.

“We have a suite of digital tools … that can pinpoint specific areas for improvement in the broker’s process. This insight is the foundation of our continuous improvement culture, enabling our brokers to grow their businesses.

“Loan Market’s approach to compliance is about saving them time, keeping them safe and enabling them to grow bigger businesses.”

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29/09/2020 2:44:02 PM

TECHNOLOGY UPDATE

CUSTOMER SOLUTIONS FOCUS DELIVERS ENORMOUS VALUE

Philippe Maes, Head of Customer Solutions, NextGen.Net

customer success enablement is something any successful SaaS company should strive for.

And NextGen.Net’s relentless focus on ensuring that its customers maximise their ApplyOnline investment was enhanced even further with the introduction of a specialist Customer Solutions Team.

Since mid-2019, the NextGen.Net Customer Solutions Team has engaged in-house with lenders to radically transform the efficiency and effectiveness of their loan processing operations.

Headed by Philippe Maes, previously of Westpac and AMP, the Customer Solutions Team was born of a gap analysis proactively undertaken almost two years ago to identify where NextGen.Net could deliver a more optimal solution for lenders end-to-end, between ApplyOnline’s loan processing capability and on-the-ground utilisation of ApplyOnline tools.

Maes was instrumental to establishing the team and has been a key contributor in achieving a dramatic turnaround for lenders.

“Our initial analysis revealed that, on average, lenders use TRUE

only 30% of ApplyOnline’s capability,” he said.

“We’ve adopted a customised, consultative approach, which I refer to as ‘the ‘Q&E methodology’ – Q for Quality and E for Efficiency – to vastly narrow that disparity. It entails identifying capability gaps, analysing contributing factors and providing the expertise to correct the problem.

“It was the brainchild of long discussions with my team regarding our own experiences with lenders and how we could help them close the gap between what NextGen.Net solutions are designed to deliver and the adopted use.”

NextGen.Net’s solutions specialist arm leverages the company’s end-to-end coverage of lending practices and benchmarking insights to put a halt to costly, timewasting rework and follow-up documentation requests, and to correspondingly achieve cutthrough in technology literacy.

“NextGen.Net is committed to not just delivering a solution but also providing postimplementation support and service of that solution,” says NextGen.Net’s Chief Customer Officer, Tony Carn.

Tony Carn, Chief Customer Officer, NextGen.Net

“We’re focused on delivering quality service and ensuring that our solutions are maximised.

“I don’t know how many lenders are aware of this, but NextGen.Net data reveals how lenders are performing in relation to each other.”

Maes points out that this is critical information.

“In conversations with lenders, it’s not about going to them empty-handed saying we have a vision and we think you should do this; we show them a suite of reports we produce that reveal how they’re performing against the rest of the industry. Lenders find it eye-opening,” he says.

“When we have these conversations, it’s not about saying ‘Trust us, we can improve things’; we back up everything we say.”

NextGen.Net’s mission is to make lending easy for all participants in the lending value chain, from lenders to aggregators and brokers, and ultimately end customers; and the Customer Solutions Team – all of whom are very experienced, highly skilled individuals with backgrounds in understanding not only technological solutions but also lender and market needs – are

a vital cog in the wheel in ensuring customers always perform optimally.

“What NextGen.Net provides as part of our customer solution maximisation is a bird’s eye view of the market,” says Carn.

“Our data is so powerful it can, for instance, show a lender where they’re sitting compared to others for their time frame for unconditional approval. So they can see immediately if they’re underperforming. They can then work with our Customer Solutions Team to identify why that is and address it.”

Maes notes that on one occasion he redesigned a lender’s process based on NextGen.Net’s functionality and cut the processing time from almost two weeks to less than 60 minutes.

“Our Customer Solutions Team assesses how they’re working with our tools and identifies any points where their business could be more streamlined. We help them optimise ApplyOnline’s capabilities and work together to close those gaps.

“Our customers’ success is paramount, and we constantly reinvest our time and expertise to ensure success is achieved,” says Carn.

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NEWS

MARKET CREDITWATCH PREDICTS ‘TSUNAMI OF INSOLVENCIES’ credit agency CreditorWatch has doubled down on the alarm it voiced last month over the rising number of “zombie companies”, or businesses being kept out of administration artificially through government support. With the extension to ‘safe harbour’ measures preventing business insolvencies to December, CreditorWatch has predicted a “tsunami of insolvencies” in January 2021. Despite the economic challenges, business administrations are currently 59% lower than the 2019 average, as businesses are relying on government support to stay afloat.

DIGITAL

DIP IN PROPERTY PRICES ACROSS AUSTRALIA data from the ABS has revealed that residential property prices fell by an average of 1.8% nationally in the June quarter.

The drop in values was led by the Sydney (-2.2%) and Melbourne (-2.3%) property markets. In the former, house prices fell 2.6% and attached dwelling prices dipped 1.4%; in Melbourne, house prices declined 2.8% and attached dwelling prices fell 1.0%. ABS head of price statistics Andrew Tomadini said, “All capital cities apart from Canberra recorded falls in property prices in the June quarter 2020.”

NEW

NATIONAL NEW HOME CONSTRUCTION EXPECTED TO LIFT A Housing Industry Association report has predicted a boost in the number of new homes built in Australia in the December quarter, thanks to HomeBuilder support home sales data released in September has confirmed that HomeBuilder will support building activity and protect jobs into the December 2020 quarter, according to the Housing Industry Association.

The HIA considers its New Home Sales report, a monthly survey of the largest-volume home builders in the five largest states, to be a strong and accurate indicator of future trends in the residential building industry.

“New home sales in the three months to August are 61.3% higher than the previous quarter, when confidence in the market was depleted and new home sales reached the lowest level on NEW

record. Without intervention, a significant contraction of work on the ground would have occurred in the second half of 2020, which meant up to half a million jobs were at risk,” said HIA chief economist Tim Reardon.

“The improvement in the number of new home sales over the most recent three months will see a lift in the number of homes under construction in the December quarter, compared to what would have been the case without HomeBuilder.”

However, while the figures contained in the report were received positively, Reardon noted that the strength of new home sales had not been consistent

across all jurisdictions.

“Western Australia has seen an exceptional bounce in sales, up by 91.1% over the past six months compared to a year earlier. This is due to combination of state and Australian Government programs and pent-up demand for housing,” he explained.

“Queensland has also seen an increase in sales over this period.

“New home sales were static or lower for the past six months in Victoria, New South Sales and South Australia as the pick-up in sales due to HomeBuilder has not offset the losses due to the COVID recession. A sharp contraction in sales in Victoria for the month of August is due to the Stage 4 restrictions and the closure of display centres.”

Countrywide, Queensland new home sales increased by 19.1% in August compared to July, followed

by NSW and WA at 11.7% and 11.4% respectively. SA sales increased by 7.4%, while sales in Victoria declined by 14.4%.

“New home sales in the three months to August are 61.3% higher than the previous quarter, when confidence in the market was depleted” Tim Reardon Chief economist, Housing Industry Association

NEW HOME SALES GROWTH BY STATE, AUGUST 2020 Source: Housing Industry Association

Month-on-month growth

10

6-month growth

19.1%

11.7%

11.4%

7.4%

-14.4%

91.1%

Queensland

NSW

WA

SA

Victoria

WA

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NEWS

A G G R E G AT O R S

AGGREGATOR OVERHAULS BROKER AWARDS PROGRAM has announced a complete overhaul of the criteria for its awards and recognition program for residential brokers, putting the focus on customer satisfaction. Admission to its premier, elite, platinum elite and chairman’s club will now be based on the “number of customers settled and their subsequent satisfaction”.

Previously, brokers and their support teams were admitted to the rankings based on the monetary value their clients brought to their businesses.

LOAN MARKET

PURPLE CIRCLE REPORTS RECORD SETTLEMENTS boutique aggregator has followed up a year of stellar growth by posting loan settlements that shattered its previous high.

August settlements by Purple Circle Financial Services jumped 14.33% above a record month in May, said chief operating officer Frank Paratore.

This result came on the heels of the aggregator’s 52.8% year-on-year increase in mortgage financing last July, way above the industry average of 10.3% based on CoreLogic numbers.

A

“We think this incremental approach [to clawback] is far fairer than the current industry standard that can see brokers losing 100% of their commission” Damian Percy

General manager, AFG Securities

12

AFG AMENDS CLAWBACK STRUCTURE TO MAKE IT ‘FAR FAIRER’ AFG says its revised clawback model is designed to be more fair and equitable in balancing the interests of brokers and lenders in-house lending division of Australian Financial Group has introduced changes to its clawback structure that are designed to enhance compliance and cultivate fairer results for the group’s network of nearly 3,000 brokers.

The changes apply to AFG’s own lending products settled from 15 September 2020 and funded by AFG Securities.

According to Damian Percy, general manager of AFG Securities, the group has been looking for some time to find a more equitable clawback model that “better balances the interests of brokers and lenders”.

“Lenders will assert that upfront commissions should reflect the value that the broker delivers and THE

must necessarily recognise that a loan that only lasts a year or two is, at best, a break-even proposition for the lender,” he explained.

“In contrast, brokers can reasonably argue that the arbitrary clawback ‘cliffs’ that exist today simply don’t reflect the fact that as time goes on the lender’s position improves.”

Percy added that there was “the reasonable question as to whether the prevailing structure is supportive of what the new mortgage broker best interests duty is seeking to achieve”.

In looking at a revision of their policy, the team at AFG Securities concluded that lenders recovered their costs over time and clawbacks should diminish proportionately in the same way. They also recognised

that a loan that discharged shortly after settlement was “arguably a poor transaction for all concerned”.

The group’s new structure therefore features a 100% clawback for the first three months. This is followed by a monthly, proportionate step-down for a further 21 months.

While Percy conceded that “no clawback regime is perfect”, AFG Securities believes the updated policy presents “an appropriate and fair balance”.

“The step-down approach is, we believe, simple, reasonable and supports our brokers to meet their best interests duty,” Percy said.

“We think this incremental approach is far fairer than the current industry standard that can see brokers losing 100% of their commission for anywhere up to the first 12 months, even though the lender’s costs have been, at least partly, recovered.

“I hope other lenders will, in due course, recognise that the industry’s approach today needs work and follow suit.”

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SME FINANCE UPDATE

CASH FLOW IS (STILL) KING changing business conditions, it is difficult for business owners to plan ahead effectively. Now more than ever, brokers have an opportunity to play a meaningful role in delivering proactive solutions to clients. Ensuring SME clients have the security of a working capital buffer for when they need it is critical.

According to a recent ABS survey, since the beginning of COVID-19 restrictions over 60% of Australian businesses have sought external advice, with the most common issue being a need to understand all the available support measures.

It revealed that nearly 30% of small businesses only have enough cash on hand to support operations for less than three months, and 19% have enough to last between three and six months.

At times like this, brokers are being called upon to provide critical support to their clients on financial resilience, supporting their endeavours to future-proof their businesses with the right cash flow solutions.

WITH

Ongoing access to cash flow Understanding how much a business needs and how long it needs it for requires extensive planning and cash flow forecasting, which can be quite complicated given the economic circumstances. Now is the time to actively engage with alternative finance partners to explore new or additional options should they be required.

Business sentiment on how long operations could be supported by currently available cash on hand

8% 16% 21%

36%

19%

Less than 1 month 1 to less than 3 months 3 to less than 6 months 6 months or more Dont’t know Source: “Business Impacts of COVID-19”, ABS Survey, 24 June 2020

Cristian Fedrigo, Head of Strategic Partnerships, GetCapital

The road to recovery and beyond Increasing the level of debt in a business is not always the right solution.

With the resurgence of COVID19 in Q2, declining revenues and worsening expectations have had a meaningful impact on SME confidence. Recent data surrounding the $40bn Government SME Guarantee Scheme points to an activation rate of less than 5%, with anecdotal feedback suggesting business owners are reluctant to increase their amount of business debt in the midst of so much uncertainty. Feedback also suggests there are concerns around committing to three-year repayment schedules, even with the six-month repayment holiday.

But as the curve in Victoria is flattened, hotspots in other states are controlled, restrictions are eased and borders slowly reopen, the timing may now be right to be more proactive and think about the opportunities ahead in a post-COVID world.

Preparation and planning can provide a competitive advantage for brokers and a huge benefit for business owners. Access to and certainty of cash flow in the back pocket of businesses can be a key differentiator for success. With recovery ripe on the horizon, a flexible cash flow solution that is readily accessible will enable businesses to emerge as front runners in the market with reduced competition and to grab greater market share.

A better solution At GetCapital, we recognise that time is precious and the importance of delivering solutions that help brokers manage their customers’ expectations.

Our ‘bankless’ Business Overdraft is an Australianfirst solution that can be linked to any existing business transaction account. Business owners can establish an account today and transact whenever funds are required. Without incurring any excessive set-up or line fees, it is an elegant tool to

prepare for the recovery.

As a revolving facility, the Business Overdraft uses unique technology, providing us with access to real-time banking data to make faster and better-informed credit decisions. The bankless nature of the facility gives brokers more visibility and control over the customer experience, bridging the broker-client communication gap that is often inherent in typical traditional bank overdraft transactions.

With no establishment, line, drawdown and exit fees, the GetCapital Business Overdraft is an essential tool for brokers looking to deliver a competitive advantage to their customers.

Find out more on protecting your clients’ cash flow and staying proactive by visiting getcapital.com.au/business-loans/ cash-flow-solutions/ to download our Business Overdraft toolkit – it has everything you need to start the conversation. Email partners@ getcapital.com.au or call 1300 972 654 to get accredited.

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PEOPLE

THE AUSTRALIAN MORTGAGE AWARDS 2020

In 2020, we’re thrilled to present the annual Australian Mortgage Awards – but this year, they’ll look a little different. One thing that won’t change is the awards’ recognition of outstanding talent across the broking industry, which has never been tested more than during the pandemic ON THE DAY

Event date Friday 16 October 2020

be honest: when we reached the end of 2019, it felt like the toughest year the industry had ever weathered.

The year 2019 was anything but smooth sailing for the finance industry, with the fallout from the royal commission and a turbulent market impacting the third party channel substantially.

In fact, the broker community settled its lowest volume of mortgages since the MFAA began LET'S

Time 2.15pm

Location Virtual – tune in from wherever you are!

reporting in 2015, with total broker loan values dropping by 10.32% year-on-year in 2019.

But all of that seems to pale into insignificance when we consider the challenges the industry has faced in 2020.

Since the onset of the COVID-19 pandemic, mortgage brokers and the finance industry at large have been at the forefront of the economic response, working to help borrowers keep their homes at a time when

Website australianmortgageawards.com.au

they have felt the most vulnerable.

The industry has assisted homeowners and investors in refinancing into more competitive products and stepped in to help negotiate billions of dollars’ worth of loan deferrals for borrowers.

Much of this work has been completed with little or no payment, which makes this year an even more unique and extraordinary time to recognise some of those in the industry who

have really gone above and beyond to service their clients in the most challenging of times.

The 2020 Australian Mortgage Awards comprise 28 categories and include awards for brokers, brokerages, BDMs, aggregators and lenders. Nominations opened in May and, despite the challenging conditions the industry has had to navigate due to the impacts of COVID-19, thousands of entries were submitted.

AWARD SPONSORS

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Event partner

How to attend Delegates simply register at australianmortgageawards.com. au/index.php/registration to receive access to a link to the virtual platform. At the all-new virtual Australian Mortgage Awards 2020 you’ll be able to enjoy a live broadcast of the awards ceremony from anywhere; show your support for industry excellence and

the 200-plus outstanding finalists; watch exclusive panel discussions with finalists and celebrate with this year’s winners; as well as engage with any guest, reconnect with your peers, and make new connections in live chatrooms.

Join us in your best black tie with your beverage of choice, or simply come as you are!

LENDER AWARDS BANK OF THE YEAR ANZ Bankwest CBA ING Macquarie National Australia Bank St.George Banking Group Westpac

FINTECH LENDER OF THE YEAR 86 400 Funding.com.au MoneyPlace OnDeck Prospa Wisr Finance

The nominations have been read and scored by a panel of independent judges and shortlisted in preparation for our upcoming awards ceremony, which will be held virtually in response to social distancing rules that mean our usual gala event can’t go ahead.

The awards presentation will be hosted by comedian Lawrence Mooney, but this year the event will be about more than just handing out accolades: there will also be

exclusive panel discussions and live chats to encourage interaction throughout the day.

Of course, the AMAs wouldn’t be possible without the support of the industry’s top names, which once again include our valued event partner Westpac, as well as award sponsors Adelaide Bank, Bankwest, BOQ Broker, Commonwealth Bank, the FBAA, La Trobe Financial, the MFAA, Mortgage Choice, NextGen.Net, OnDeck and Pepper Money. AB

NON-BANK OF THE YEAR Firstmac Heartland Seniors Finance La Trobe Financial Liberty Mortgage Ezy Newcastle Permanent Building Society Pepper Money Resimac

LOAN SERVICES TEAM OF THE YEAR Bankwest Better Choice Home Loans CBA ING Macquarie

MOST EFFECTIVE DIGITAL STRATEGY — LENDER Bankwest Heartland Seniors Finance MyState Bank Pepper Money

OFFICIAL PUBLICATIONS

Resimac St.George Banking Group Westpac

ORGANISED BY

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BROKER AWARDS

AGGREGATOR AWARDS AGGREGATOR OF THE YEAR (UP TO 500 BROKERS) Liberty Network Services National Mortgage Brokers Purple Circle Financial Services

ONDECK AGGREGATOR OF THE YEAR (OVER 500 BROKERS) AFG Aussie Connective FAST Finsure Loan Market Group Mortgage Choice outsource financial PLAN Australia Specialist Finance Group

INDUSTRY AWARDS BEST INDUSTRY MARKETING CAMPAIGN Aussie Loan Market Group National Finance Brokers Day Resimac Zippy Financial Group

BEST INDUSTRY SERVICE

Broker Essentials HLE Nepal iLoad Loans NextGen.Net Trail Book Loans

16

LA TROBE FINANCIAL BROKER OF THE YEAR — COMMERCIAL Andrew Soo, GM Capital Solutions Barry Thatcher, Thatcher Finance Daniel Green, Green Finance Group George Karam, BF Money Greg Pierlot, The 500 Group John Encina, Experity Capital John Lucci, Loan Market Melissa Ashcroft, AAA Mortgages

BROKER OF THE YEAR — PRODUCTIVITY Adam Burstein, Nuage Finance Daniel Green, Green Finance Group Josh Bartlett, Mortgage Advice Bureau Joshua Trevitt, JT Home Loans Prakash Rai, Home Loan Experts Robert Simpson, Loan Market Stephen McClatchie, Loans Australia Vicky Nikova, Aqua Financial Services Vivienne Than, Home Loan Experts

FBAA BROKER OF THE YEAR — INDEPENDENT Alex Veljancevski, Eventus Financial Barry Thatcher, Thatcher Finance Daniel Berti, Berti Financial Daniel Dusevic, Experity Capital Fane Levy, Shore Financial Holly Bundy, Bundy Financial Services Josh Bartlett, Mortgage Advice Bureau Josh Egan, Astute Melbourne City South and Gippsland Kris Menon, Origin Finance Stephen McClatchie, Loans Australia

BROKER OF THE YEAR — REGIONAL Joshua Trevitt, JT Home Loans Kaia Hunter, Mortgage Choice Buderim Mhairi MacLeod, Astute Ability Group Paddy O’Sullivan, Mortgage Choice Nowra Paul Wright, MoneyQuest Wollongong Robert Simpson, Loan Market

MFAA YOUNG GUN OF THE YEAR — FRANCHISE

PEPPER MONEY BROKER OF THE YEAR — SPECIALIST LENDING Daniel Green, Green Finance Group Darin Hindmarsh, Intellichoice Jonathan Preston, Home Loan Experts Mhairi MacLeod, Astute Ability Group Michael Hughson, Arthurmac Mitchell Boulden, Jennings Mortgages Penny Huyan, Goldenwater Finance Group Ray Ethell, Non-Conforming Loans

ADELAIDE BANK YOUNG GUN OF THE YEAR — INDEPENDENT Andrew Loucas, Loan Base Asad Rizvi, Riz Finance Duncan Ahlin, Real Estate Investment Finance Evelyn Clark, Accession Finance Gareth Couper, Think Big Financial Group Mohit Lal Pradhan, Home Loan Experts Taila Sullivan, Indigo Finance Thomas Morison, Smartmove Professional Mortgage Advisors Yianni Pazios, Aspire Lending

Brian Lowe, Aussie Home Loans Taigum Katie Dowton, Mortgage Choice Radenka Subotic, MoneyQuest Robert Simpson, Loan Market

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Event partner

BROKERAGE AWARDS BROKERAGE OF THE YEAR — DIVERSIFICATION Astute Melbourne City South and Gippsland Experity Capital Finance Made Easy Infinity Group Australia Real Estate Investment Finance Shore Financial TM Finance Group

CBA BROKERAGE OF THE YEAR (>20 STAFF) Home Loan Experts Oxygen Home Loans RateOne Redrock Group Shore Financial Smartmove Professional Mortgage Advisors The Australian Lending & Investment Centre

BROKERAGE OF THE YEAR — REGIONAL Astute Ability Group Astute Gippsland Go Mortgage MoneyQuest Wollongong Mortgage Choice Erina Mortgage Choice Nowra

BROKERAGE OF THE YEAR (1—5 STAFF) Astute Ability Group Atelier Wealth Birdie Wealth IFA Mortgages & Finance Mortgage Advice Bureau Melbourne Premier Financial Advocates Thatcher Finance Zippy Financial Group

BDM AWARDS BANKWEST BEST AGGREGATOR BDM Chris Patsouras, Finsure Finance & Insurance Heather Gallagher, outsource financial Justine Hockley, Connective Paul Gollan, Finsure Finance & Insurance Peter Bryant, Vow Financial Tracey Najjar, Centrepoint Alliance Lending Zoe Uyen, Aussie Home Loans

BROKERAGE OF THE YEAR (6—20 STAFF)

MORTGAGE CHOICE BEST NON-BANK BDM Alastair McCosh, Resimac Belinda Gray, Bluestone Drew Clegg, Pepper Money Glen Gillespie, Better Mortgage Management Jessica Pringle, Pepper Money John Maxwell, Cocalex Holistic Consulting Matthew Hall, Liberty Nicole Evans, Wisr Surinder Agnihotri, Australian Business Credit

BF Money Empower Wealth Mortgage Advisory Experity Capital Green Finance Group Infinity Group Australia Loan Market One Network Broking Loans Australia Mortgage Pros Peasy Time Home Loans

BOQ BROKER BEST CUSTOMER SERVICE FROM INDIVIDUAL OFFICE Berti Financial Mortgage Choice Ormeau No Fuss Home Loans Numero Uno Finance Rise High Financial Solutions Shore Financial Smartmove Professional Mortgage Advisors Time Home Loans Your Finance Adviser Zippy Financial Group

BEST MAJOR BANK BDM Blake Hauber, Westpac Blake McLucas, ANZ Edmund Stewart-Mole, Westpac Julianne Brown, CBA Lesley Klaege, ANZ Linda Oates, NAB Natalie McCullough, CBA Sam Tang, Westpac

BEST NON-MAJOR BANK BDM Andy Zhao, Bankwest Anita Fung, Bankwest Clem Marcocci, ING Dylan Cole, Bank of Melbourne Grace Munro, MyState Bank John Loukadellis, Macquarie Omar Moussa, St. George Bank Ross Fitzgerald, ING Sally Breeze, MyState Bank Tes Anderson, Bankwest

MOST EFFECTIVE DIGITAL STRATEGY — BROKERAGE Birdie Wealth Empower Wealth Mortgage Advisory Infinity Group Australia Loan Base Shore Financial XIN Mortgage Zippy Financial Group

NEXTGEN.NET NEW BROKERAGE OF THE YEAR Ding Financial Experity Capital Numero Uno Finance Ortus Financial Premier Financial Advocates Red10 Finance

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PEOPLE

Have an interesting deal?

Had a particularly difficult or interesting deal? Why not share it with us? Email:

sarah.megginson@keymedia.com

BIG DEAL Finance broker Vincent Moore thought he was working on a straightforward deal. It soon became clear that the client’s unpaid debts, repayment plans and low valuation were set to cause some issues – and change his business processes along the way THE FACTS

Client 26-year-old male

Loan size and term $187,000 over 30 years

Goal To complete a favourable purchase of a home

There are many ways that clients find you, and in this instance the client was an old friend of mine who I went to university with, and who I had worked with in the past. He was in a stable job as a national sales manager and earned a good income, but he didn’t have a strong savings history or a good credit score. He was looking to purchase a home from a family member to live in, and there was quite a unique set of issues to deal with.

The first was that the client wasn’t able to provide evidence of genuine savings, which was an issue for some lenders, given that he was looking at an 88% LVR against the purchase price.

The second complication was that the client had outstanding fines owed to Fines Victoria and was on a repayment plan.

The third – and we only realised this after we were well into the process of talking to lenders – was that his credit score was roughly 500, which is quite low, and there were late credit card repayments listed on his credit file.

The fourth and final issue was that the valuation originally came in lower than expected.

Aggregator Loan Market

THE TAKEAWAYS

There were good lessons learnt by the client about managing his money more effectively and making sure he stayed on top of all of his debts.

The key reminder for me was to always get the privacy form signed by the client and do a credit check upfront. We put

This was one of those deals with issues that kept popping up. At first, the only issue was the lack of genuine savings …

However, we soon found out about the outstanding debts

THE SOLUTION

18

Lender Liberty

lenders evidence of genuine savings.

Next, we decided to go to Liberty to find a good lending solution at a slightly higher interest rate.

This was one of those deals with issues that kept popping up. At first, the only issue was the lack of genuine savings, which was quite easy to deal with as we had lenders such as ING and Bankwest that had suitable policies and were happy

THE SCENARIO

The first solution involved speaking to the client openly about the situation to explain how these complexities could impact his chances of loan approval. With an LVR of 88%, it was quite a tricky deal.

The client was able to source some additional funds from family members.

This brought the LVR down to under 85% and removed the need to show

Location Wangaratta, Victoria

We also did some upfront valuations before going to Liberty, which came in low. This forced the client to renegotiate the contract with his family before we went to Liberty and did the final valuation.

The ultimate outcome was a very happy client. While the interest rate is slightly higher with Liberty, he was very keen to secure this property as he thought it was a great opportunity. The view was that there would be plenty of growth over the next two years, and he would be able to build equity into the property, allowing himself to upgrade to a bigger home in the future as well.

The plan will also be to refinance away from Liberty in a few years’ time so that he can lower his interest rate to a very competitive rate.

Vincent Moore Partner and finance broker, Entourage

with non-genuine savings at an 88% LVR. However, we soon found out about the outstanding debts and repayments to Fines Victoria, which was quite a unique situation. We had to contact each lender to gauge their view on it, and some would not accept an outstanding debt when lenders mortgage insurance was involved.

ING was comfortable with it, and we prepared the paperwork to submit to them; however, we did a credit check before submitting it and found out that there was a poor credit score and a history of missed repayments on the client’s credit card. As a result, we had to re-evaluate the loan strategy, and Liberty came up as the ultimate solution, given that they don’t do a comprehensive credit report or a credit score.

time and resources into finding a solution for the client when we didn’t have the full picture, which was a very inefficient way to go about it.

The majority of clients won’t have huge surprises on their credit files, but when they do, it can have a big impact. We’ve now amended our process to always get the privacy form and credit check done upfront.

There is also the time-old issue of borrowers who aren’t good with their money. However, there is reason to believe that this is changing, with a new age of financial literacy and education coming through. At Entourage, we are certainly focusing on this and running sessions on financial wellness and education through one of our brokers, Mikaela Patterson. AB

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Subscribe to the most reliable independent news source for mortgage professionals “Australian Broker, in either print or online, is a news source we check daily. Its speed, insights and focus on current issues make it a ‘must have’ news source for the industry.”

- Mark Hewitt, General Manager - Broker and Residential, Australian Financial Group (AFG)

FORTNIGHTLY PUBLICATION Delivered right to your doorstep or office every fortnight

REAL-TIME WEB SERVICE Breaking news, in-depth profiles, features, online forum, and Australian Broker TV

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NE WS ANALYSIS

PROPERTY PRICE GROWTH IN THE FORECAST

Over the last six months we’ve heard forecasts of property prices falling by anywhere from 10% to 40% as a result of the pandemic’s impact. Now the tide has turned, and many are predicting far slower rates of decline – and even growth beyond 2021.

What is driving this swift about-face in such uncertain times?

seems to be the magic number.

For some reason, it’s the percentage that is thrown around most frequently when doom and gloom predictions are reported by the media: it was widely reported during the GFC that Australian property prices could slump by 40%, and that forecast gained traction again this year during the COVID-19 pandemic.

It really picked up steam when the Reserve Bank issued a report modelling potential ‘worst-case scenarios’ and outlined what would happen to Australian households if property prices did plunge.

(Spoiler alert: it wasn’t good.)

With CBA foreshadowing a potential 32% plunge back in May, it’s been hard to avoid the doom and gloom reports about our most treasured and highest-value assets: our homes.

Now, more than seven months into the economic impact of the pandemic, many industry experts are winding back their negative predictions. And it’s not just the experts who have growing confidence in Australia’s economy; consumer confidence has also increased in recent weeks (see boxout at right).

FORTY PER CENT

Why the swift change?

“Most economists are risk averse by nature,” explains property researcher and buyer’s agent Simon Pressley.

“They have a default negative bias, and they always compute the worse scenario. They often have a belief that property markets respond rapidly, because shares can do that, but they fail to understand that property asset values don’t change at all unless there’s a transaction. It’s a big decision and a lengthy process to 20

sell a property asset, whereas a share sale takes one minute. Their beliefs about the biggest influences on real estate value are far too simplistic, along with implying that people are homogeneous, that everyone’s

Experts widely predicted that COVID-19 would cause a downturn in property prices of between 15% and 40%, and this is because “they responded rapidly to the expectation that overseas migration, or population

“Beliefs about the biggest influences on real estate value are far too simplistic, along with implying that people are homogeneous … and that all properties are the same” Simon Pressley, property researcher and buyer’s agent income is the same, that everyone’s expenses are the same, and that all properties are the same.”

growth, would be zero and that the national unemployment rate would push past 10%”, Pressley explains.

“They completely underestimated that housing is shelter – it’s the last thing that a person will give up. They didn’t appreciate how incredibly tight the supply side already was and that low interest rates are a form of safety shield.

While everyone correctly expected that sales volumes would sink, few appreciated that record-low supply, including resale stock, rental stock and new construction, meant that there didn’t need to be much activity for pressure to still occur,” he says.

“And, as always happens, they didn’t factor in the vastly different economic profiles and growth drivers in each location, particularly capitals and non-capitals. The reality is that property markets aren’t simple at all. There are multiple influencing factors, and it’s the sum of all factors, not one factor, which triggers the action of a dominant critical

BIGGEST LIFT IN CONSUMER CONFIDENCE IN 12 WEEKS Source: Roy-Morgan Research, ANZ, CommSec

ANZ-Roy Morgan weekly confidence rating, 2020 6 4 2 0 -2 -4 -6 29 May

14 Jun

28 Jun

12 Jul

26 Jul

9 Aug

23 Aug

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Simon Pressley, property researcher and buyer’s agent

mass that always dictates market performance for a chosen location.”

Many think that property markets are a simple formula of supply and demand, with ‘supply’ being the volume of extra dwellings constructed over the last year and ‘demand’ being the volume of population growth over the same period.

But property fundamentals and drivers of growth aren’t anywhere near this simplistic, Pressley argues.

“These people haven’t studied Australian real estate history to the nth degree. I have – every location.

The only way to truly understand the complexities of property markets is to look at what every location has done over history, what happened in each location to cause the ups and downs, and identify the common denominators,” he says.

“The real estate generalists quickly jump to an often-negative price fluctuation conclusion as soon as there’s a major announcement such as unemployment projection, migration policy change, or building construction change. Instead, people need to draw a more informed conclusion from the sum of all parts of a very big puzzle.”

Raj Sarin, head of investment finance at InSynergy Property Wealth Advisory, agrees with the view that we need to focus on the macroeconomic conditions and fundamentals of each specific market, rather than taking too much of a generalist view.

“As a country, we entered COVID-19 with very strong fundamentals and a great balance sheet. Furthermore, the macro fundamentals of markets like

Raj Sarin, head of investment finance, InSynergy Property Wealth Advisory

SA, Southeast Queensland, the ACT and WA were strong, and it’s no surprise who will be the winners

Michelle Ciesielski, head of residential research – Australia, Knight Frank

property as they have the most risk, having just doubled [in value] with terrible net yields and the

“As a country, we entered COVID-19 with very strong fundamentals and … the macro fundamentals of markets like SA, Southeast Queensland, the ACT and WA were strong” Raj Sarin, head of investment finance, InSynergy Property Wealth Advisory in the next cycle,” he says.

“Personally, I wouldn’t invest in Sydney property or Melbourne

lowest affordability – and yes, a home is an investment too, possibly your biggest one.”

Sarin says it’s still important to buy the right type of property, as cookie-cutter, investor-grade properties will “likely see poor to no growth”, and they always have lower appeal to owner-occupiers, who really drive the market.

However, he is encouraged by the latest reports and predictions coming out of the major banks, which indicate a more positive outlook.

“Westpac have released their revised forecast for the various capital cities, and unsurprisingly there are no 20–30% drops any more, as some other economists were implying as fiscal policy was deployed,” he says.

“No doomsday, and no 1 October 2020 cliffs to fall off either. That said, investing in property – like any

PROPERTY PRICE DECLINES: 12 MONTHS TO JUNE QUARTER 2020 Source: Westpac

 2.6%

Sydney

Melbourne

 4.6%

 0.9%  2.6%

Brisbane

Perth

 0.1%

Adelaide

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asset class – with or without leverage is not without risk. My strong recommendation is for people to speak to professionals who can help them strategise and minimise the various risks involved.”

So, what exactly has Westpac predicted?

Essentially, the bank has revised its near-term house price forecasts, citing a more substantial boost due to lower interest rates and a milder-than-expected recession as reasons for the adjustment.

Many may recall that, at the onset of the pandemic, Westpac was one of the first to predict widespread price falls. It forecast a 10% fall in real estate prices nationally from the peak in April to June 2021, with an increase of around 4% per annum over the following two years.

Westpac expected Melbourne prices to be hit the worst, falling by 12%, Sydney values to drop by 10%, and prices in Brisbane and Adelaide to decline by 8%. But now, with national real estate markets appearing to be weathering the COVID-19 storm, the big four bank has dramatically changed its tune.

According to Westpac senior economist Bill Evans, the bank expects a 5% dwelling price correction through to late 2021 – followed by a 15% surge over the next two years.

“To date, our view has been for a 10% fall in prices nationally from the peak in April 2020 through to June next year,” says Evans. “From that point we expected increases of around 4% per annum over the following two years.

“We now expect many capital city markets to be more resilient, with a national fall of 5% between April and June next year, distributed between Melbourne (-12%), Sydney (-5%), Brisbane (-2%), Perth (flat), and Adelaide (2%). Of most importance is that we are much more optimistic about the pace of price appreciation over the following two years, with a total expected increase of around 15%.”

According to Evans, the recovery will be “supported by sustained low rates, which are likely to be even lower than current levels; ongoing support from regulators; substantially improved affordability; sustained fiscal support from both federal and state governments; and a strengthening economic recovery”.

Evans adds that he sees the house price profile unfolding in “four distinct stages”.

22

“The first, which has now largely passed, is the initial impact on prices from the collapse in economic activity in the June quarter. That has seen broad-based declines in Sydney (-2.6%), Brisbane (-0.9%), Perth (-2.6%), Adelaide (-0.1%), and a more severe fall in Melbourne (-4.6%). However, the pace of deterioration outside of Melbourne has been milder than we expected back in March,” he says.

“The second stage, which will cover the December and March quarters, will be a period of relatively stable prices, possibly with

Melbourne than the other cities”.

“The fourth phase will come once this selling pressure has worked through the system and prices lift again,” he says.

His sentiments are echoed in new research from Knight Frank, which suggests that Australia’s housing market has been among the top performers globally in terms of price growth over the first six months of 2020.

Australia moved up 37 places in the global rankings from last year, claiming the 19th spot in Knight Frank’s Global House Price Index

“Australia has dealt with [COVID-19] better than some other countries ... with the length and severity of the lockdown not as strong, which partly explains its stable performance” Michelle Ciesielski, head of residential research – Australia, Knight Frank some modest increases, although Melbourne will be at least one quarter behind the other states and will still be experiencing falls in prices in the December quarter.”

According to Evans, the third stage will see some limited resumption of downward pressure on prices through 2021 as we see an increase in ‘urgent’ or distressed sales relating to borrowers struggling or unable to resume mortgage repayments, and “again, more adjustment is likely in

over the second quarter of 2020.

House prices across Australian markets grew by 6.1% over the year to June. It is essential to note, however, that in the first six months of 2020 prices fell by 0.4%.

While annual price growth in Australia fell slightly from the first quarter of the year, it was still higher than the average price gain of 4.7% across 56 other countries and territories tracked in the index over the quarter, says Michelle Ciesielski, head of residential research for

Australia at Knight Frank.

“Australia has dealt with the COVID-19 pandemic better than some other countries and territories around the world, with the length and severity of the lockdown not as strong, which partly explains its stable performance,” she says.

Ciesielski said the stable growth across Australia’s housing markets could also be attributed to the conditions prior to the COVID-19 outbreak. Heading into 2020, Australia was already experiencing high demand and low stock levels, and this has continued amid the pandemic as homebuyers remain interested in property while sellers take a wait-and-see approach.

In Sydney, for instance, the severe shortage of properties for sale through auctions and private treaty is keeping prices stable, says Shayne Harris, national head of residential research at Knight Frank.

“Whilst in the past eight weeks the difficulties around obtaining finance have seen the number of registered bidders thin out at auction, the clearance rate remains stable, as do prices across the inner and middle rings of metropolitan Sydney,” he says.

Brisbane is also holding up well, Harris says, and the city appears to be recording a quicker-thanexpected recovery, particularly due to its tight apartment supply line.

It is therefore poised to emerge in a “very good position” for 2021 and beyond, Harris says.

“Coming off an extended period of low price growth,” he adds, “Brisbane’s affordability is the best capital city side by side with Perth in the short to medium term.” AB

PROPERTY PRICE FORECAST: 12 MONTHS TO JUNE QUARTER 2021 Source: Westpac

 5%  12%

Sydney

Melbourne

 2%

Brisbane

 0%

Perth

Adelaide  2%

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OPINION

EVOLVING TECH NEEDS IN THE NEW NORMAL Mortgage processes have been on a gradual path towards digital technologies, creating greater efficiencies for brokers and their customers – and COVID-19 has propelled this journey further. Advantedge general manager Adam Brown and Simpology CEO Kate Gubbins consider which trends are here to stay

of us are familiar with the many benefits that going digital can bring. Certainly, the events of the past few months have meant we have all been gaining more first-hand digital experience, either through Zoom and Microsoft Teams meetings or through the plethora of digital events now on offer.

Digital capability has become easier to access, easier to integrate and more secure.

From an industry and lender perspective, there is a much stronger appetite and willingness to allow third parties to integrate and plug into their business rules engines. From a regulatory standpoint, verification of data is also now easier.

If third party technology providers can verify the data first, it brings everyone closer to straight-through processing.

This essentially means processes and turnaround times are faster and the rework that needs to happen on a submission is reduced – a win for all concerned.

Of course, the most crucial step on the road to digital has been customers’ acceptance, willingness and expectation that they will have digital capabilities in place. In this constantly evolving world, customers are seeking a quicker and more convenient mortgage process.

For a long time, lenders had insisted on printed forms and original copies of documentation with wet signatures, and for a while we all just accepted this process.

But increasing use of mobiles and tablets has shifted behaviours and expectations.

Deloitte research shows that nearly nine in 10 Australians own a smartphone – digital technology is simply part of everyday life.

Add to this the number of first home buyer schemes and the number of FHBs (traditionally the younger demographic) returning to the market, and the demand for digital communication and processes is only set to increase further.

Customers and brokers are also busier.

When regulatory requirements mean the

cost of getting a file to the point of submission is higher than ever before, extra efficiencies need to be built into the process.

We know that brokers have always built strong relationships with high personal touch. However, many brokers now appreciate that the digital tools on offer only add to their valued relationships with customers by getting them a faster and more accurate outcome.

While customer expectations and industry adoption of digital tools have been gradually on the rise, the biggest and most dramatic shift towards digital adoption has

MOST

is lodged with Advantedge now goes unconditional the first time it’s received; in the past this was around 10–15%.

Both Advantedge and Simpology have long-standing histories of supporting and providing digital enablers. In 2017, Advantedge was one of the first in the country to deliver electronic loan documents and now supports full end-to-end digital functionality.

Tools such as Simpology’s Loanapp also reduce back-end administration and enhance quality submissions.

The trend of increasing digital adoption

The digital tools on offer only add to brokers’ valued relationships with customers by getting them a faster and more accurate outcome

Adam Brown General manager, Advantedge

Kate Gubbins CEO, Simpology

been due to COVID-19. In the past six months, things have accelerated at a pace no one could have anticipated.

It simply was not (and is still not in some states) possible to have face-to-face meetings with customers, so we have all been forced to find new ways of doing things and, in turn, have started to take a more active interest in different types of technology. For example, there has been an uptick in digitising verification tasks and digital collection of ID, using tools such as DocuSign via Loanapp for customer and broker signatures. All of this reduces the amount of rework involved and is already having a positive flow-on effect when it comes to submission standards.

On the verification side, around 55–60% of what is lodged with Advantedge now meets the minimum verification requirements (up from 30%), and this continues to increase. About 30% of what

looks here to stay, a sentiment echoed in a recent Advantedge survey which shows that over eight in 10 brokers intend to use or rely on digital tools in the future. The survey also revealed that the main barriers to future usage stem from brokers’ lack of knowledge or confidence in how best to use or apply the relevant digital tools.

Most aggregators and lenders have moved towards more online education and digital PD days, so we urge brokers to take advantage of continued education to help bridge this gap. Brokers should also look at current business models to understand how to integrate digitisation into the mortgage process so it doesn’t take away from their major strength – the customer relationship.

There is no shortage of opportunities for brokers to understand and educate themselves on the digital tools on offer. It’s now time to embrace them to get the best outcomes for you and your customers. AB www.brokernews.com.au

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23

29/09/2020 3:06:36 PM

PEOPLE

Get involved in the discussion Share your thoughts at

brokernews.com.au

FROM THE FORUM

Top comments from trending stories on brokernews.com.au

BANKS GET A TASTE OF BEST INTERESTS DUTY RESPONSIBILITIES In August, ASIC published its expectations for how lenders should handle the expiry of customers’ loan repayment deferrals over the coming months, revealing an overlap with the approach it took in its recent regulatory guide for mortgage brokers on the best interests duty.

“ASIC’s guidance to the lenders regarding mortgage deferrals is quite interesting; it sounds very similar to the guidance they’ve been giving to the mortgage broker industry – more specifically around our upcoming best interests duty obligations,” said Connective executive director Mark Haron. “What ASIC is saying here is the banks must be really clear in explaining to their customers the consequences of putting their home loans on pause.”

Clear and direct communication is crucial not only to ensuring customer comprehension but because ASIC has left ample room for the banks to decide the best course of action for each customer rather than recommending a standardised approach.

“In some cases, customers might be able to afford some repayments, in which case they should be encouraged to pay as much as they can to control the blowing out of their mortgage costs in the long run. Others will be put on interest-only. For some, banks could lengthen the term of the loan, such that when the customer can resume repayments they’ll be more affordable and [they will] realistically be able to continue making them,” Haron said.

“ASIC has been really clear lenders will need to keep adequate notes. And adequate notes, as our group legal counsel at Connective has pointed out many times in many webinars, is really also what brokers will use to cover themselves to ensure they’re compliant down the track,” said Haron. “If you’ve kept adequate notes and you’ve disclosed appropriately, you’ll be in a better position should someone make a complaint against you.”

He emphasised the need for brokers to remain vigilant about their record-keeping as well.

24

“It’s really quite important that the broker is careful in how they position any advice or recommendations around whether to extend the deferral or not, and rather focus on the larger financial impact for the customer,” Haron said.

“It is crucial they’re keeping adequate notes of the conversations they’re having with the customers.”

It’s this part of the equation – the fact that brokers will need to step up as the gatekeepers of effective record-keeping – that has some readers on our website expressing their views. Here’s what some brokers had to say.

“We as brokers should not have to rely on manual subjective record-keeping. It is our aggregators’ job to design the fact-find document requirements accordingly. Anything manual sets us up to fail. Aggregators make a decent sum from brokers; it is time they spent this money to make the onerous BID requirements as simple as possible.”

Broker

“Record-keeping – that’s right; that’s your job! How you do it is not up to anyone else but you and ASIC when they investigate, [and] if you tell ASIC to go see your aggregator, then there goes your livelihood. Being a credit adviser comes with responsibility – if you are not up to the task, then perhaps this is not the job for you.”

OzBoy

”Of course, what brokers need to be doing is talking to their customers, understanding where they’re at and helping them stay informed. But there is a lot of pressure on the broker here! As if it’s not enough that for each lender we have to take the relevant customers through what the banks’ requirements and policies are – now we have to keep a clear record of the conversation too?”

Ticked off

www.brokernews.com.au

24_AB1719_Forum 2_SUBBED.indd 24

29/09/2020 3:07:10 PM

PEOPLE

Do you have a question for our broker mentors?

Email your question to:

sarahmegginson@keymedia.com

BROKER ON BROKER

When his clients were disappointed by some banks’ turnaround times over the last few months, Fabio De Castro, mortgage broker at Oxygen Home Loans, took matters into his own hands to ensure their experience was still a positive one

Since the onset of the pandemic, have you and your clients had many issues related to extremely delayed turnaround times at some of the banks? certain lenders, yes – but A With not all of them. Some banks have been experiencing major delays, but in those cases it’s up to the broker to be very upfront with their clients. It needs to be really clear from the client’s point of view to set the expectation upfront that there are going to be delays with certain lenders.

Q

How do you ‘set the Q expectation’ of the client?

It starts by getting a clear idea A of their needs, and then it’s about the best interests duty. You can say, “I understand you might be in a hurry, but you’re going to wait two months for an approval if you go with Bank A, or if you go with this lender you’re going to get it done within three days.” The thing we have to remember is that we’re still in a COVID-19 situation, and a lot of people are working from home and the processes and systems are not the same as what they were.

When you’re dealing with borrowers who have been waiting a long time for their loan to be processed, how do you minimise stress for them?

A First of all, I really focus on time frames and find out if it’s important to the client to have a faster turnaround, and then

Q

I allocate the correct bank, because they’re not all suffering – some of the smaller banks are turning around their decisions within a few days, and brokers can send business there. I touch base with the bank to understand what its turnarounds are, and if the bank tells me 12 days, I’ll tell the client 14 days.

I’ve had a lot of settlements pushed back that were due to settle in July, and they got pushed to August, so as a business we had a lower settlement month because it all dragged out.

How do you manage clients whose loan processing times have blown out to become far worse than they expected?

Even if there is not much news, A I do communicate to the client to say, “This is what we’ve done: your file has progressed in the queue; the expectation is this date; I will continue to keep you informed.”

I’m also big on reminding the client that their relationship ultimately lies with me – if something goes wrong, they can always come to me. The last thing I want is for a client to end up in a loan with a bank that they’re really unhappy with because they’ve had a bad experience. In some cases I’ve sent clients hampers to thank them for their patience. I’ve repaid annual fees out of my own pocket that they were charged by their bank while they waited for their loan to be processed. I try to think outside the box and make sure the client still has a good experience. AB

Q

Fabio De Castro, mortgage broker, Oxygen Home Loans

“I’m also big on reminding the client that their relationship ultimately lies with me – if something goes wrong, they can always come to me”

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.

www.brokernews.com.au

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25

29/09/2020 3:07:59 PM

DATA

QUEENSLAND

NSW SPOTLIGHT

The state may have missed its chance to stimulate economic growth The Queensland state government recently pledged direct investment of $1bn in commercial business and projects. Chris Mountford, executive director for Queensland at the Property Council, said the $1bn investment in private businesses appeared to be “misplaced” as it would result in the state government competing with private capital instead of encouraging more private investment.

Mountford explained that “the globe is awash with capital seeking a safe, secure return. Queensland is well placed to capitalise on this appetite for investment”. He suggested that the state needed to consider other ways to create jobs and provide economic stimulus.

“Whether it be removal of the foreign investor surcharges, reduction of land tax for build-to-rent, removal of stamp duty for off-the-plan dwellings, or simple acts like changing the strata title termination thresholds, there are many ways the government could stimulate private sector activity rather than seeking to compete with it,” he said.

Area

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

Metro (H)

$535,000

0.0%

rent

yield

0.9%

$410

3.9%

Metro (U)

$375,000

0.0%

1.3%

$380

5.1%

Country (H)

$435,000

-0.4%

0.9%

$395

4.6%

Country (U)

$370,000

0.3%

1.6%

$350

4.8%

TASMANIA

Tasmania has extended its support schemes for both tenants and landlords The emergency period for residential tenancies in Tasmania, has been extended to 1 December 2020. This means that all protections in place for residential tenants affected by COVID-19 will continue. The state government has also extended the Rent Relief Fund, which allows struggling tenants to apply for assistance of up to $2,000. Furthermore, it has rolled out the COVID-19 Landlord Support Fund, which will offer financial support to residential landlords who are facing financial hardship. Under the new program, landlords who can demonstrate that they have tenants in rent arrears will be eligible for a $2,000 relief payment.

Adrian Kelly, president of the Real Estate Institute of Australia, said these announcements showed the state government’s acknowledgement of the struggles of both tenants and landlords.

“Tasmania has outlined a sensible and pragmatic framework with a very clear signal for other jurisdictions less affected by COVID-19 to look at carefully,” he said. “We encourage all premiers and relevant ministers to look closely at this approach.”

Area

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Metro (H)

$506,850

1.0%

7.9%

$450

4.6%

Metro (U)

$370,000

0.0%

6.4%

$395

5.1%

Country (H)

$340,000

1.5%

9.8%

$320

5.0%

Country (U)

$275,000

1.9%

2.6%

$270

5.1%

26

A ROSY SPRING FOR SYDNEY? Spring is generally a good time to sell, but with the impacts of COVID-19, will Sydney markets still see a boost in sales?

Sellers in the Inner West region are taking a wait-and-see approach, at least until overall market sentiment improves. However, Thomas said this region had been able to maintain its prices due to its historically low levels of stock.

“There hasn’t been too much of a decline in capital values within the Inner West. Therefore, a rebound is not expected in spring,” he said.

In the Western Sydney region, supply has also been relatively low, preventing further falls in house prices. However, listings could potentially increase during the spring selling season. In fact, some suburbs are already reporting an increased level of supply for new units.

Meanwhile, supply in the North and North-West region started to rebound in June, outpacing the record last year. Thomas said this reflected that vendors and buyers had already adjusted to COVID-19 conditions and were more confident in the market. Listings are also expected to rise in the Southern Sydney region.

diversity of Sydney’s property market means that many suburbs have their own intricacies, according to Shaun Thomas, residential director at Herron Todd White.

“As such, an overall increase or decrease in weekly values doesn’t paint the full picture, as Sydney’s property market runs at different speeds and different timetables,” he said.

Sydney’s Inner region was on an upturn before the COVID-19 outbreak, with its median price almost hitting the 2017 peak. However, activity started to slow during the pandemic, and fewer apartment listings were registered.

However, Thomas said some agents had reported a high sales volume in recent months.

Some had even had to turn down listings to avoid flooding the market.

“Typically, the inner-city region is an investor-heavy area, and it is understandable that there are going to be some investors who need to liquidate,” he said.

THE

SYDNEY HOUSING MARKET INDICATORS, AUGUST 2020 Source: CoreLogic, SQM Research

Houses

$985,723

13.9%

2.7%

$622

Median value

Total return

Gross yield

Median weekly rent (as of first week Sept)

Units

$745,168

11%

3.4%

$475

Median value

Total return

Gross yield

Median weekly rent (as of first week Sept)

SUBURB TO WATCH: TWEED HEADS Median price (houses) $750,000

Median price (units) $512,000

12-month growth

3-year growth

Average annual growth

Gross rental yield

-4%

14%

4.6%

4%

12-month growth

Average annual growth

Weekly advertised rent

Gross rental yield

11%

2.3%

$420

4%

www.brokernews.com.au

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29/09/2020 3:08:38 PM

AUSTRALIAN CAPITAL TERRITORY

Tenancy Act Emergency Declaration could become a burden for landlords Michelle Tynan, CEO of the Real Estate Institute of the ACT (REIACT), has said that while she supports the transitional period that will enable tenants to repay arrears under the ACT’s amended Residential Tenancy Act Emergency Declaration, concerns remain for those who might not have the capacity to start repaying.

“The transition process now implemented by the government will require impacted tenants who are unable to maintain rent and arrears payment plans after the 22 October 2020 to appear before ACT Civil and Administrative Tribunal on two occasions, with eviction the only certainty under the amendments,” she said.

Tynan said that with this move the state government had failed to acknowledge that many landlords could not afford to continue offering reduced or deferred rent indefinitely.

“For the past six months their costs have not reduced, yet government expects the goodwill of landlords to continue to be a viable option,” she said.

Area

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Metro (H)

$700,250

0.4%

3.3%

$570

4.3%

Metro (U)

$445,000

0.5%

2.3%

$470

5.6%

WESTERN AUSTRALIA

Several factors point to the tightening of Perth’s rental markets

HIGHEST-YIELD SUBURBS IN NEW SOUTH WALES Suburb

House

Gross rental yield

Number sold

Median price

Quarterly growth

12-month growth

Ave. annual growth

HILLSTON

H

14%

27

$110,000

-18%

-39%

4.7%

WARREN

H

13%

14

$122,000

3%

-24%

2.1%

FARLEY

H

12%

21

$180,000

-1%

-8%

-7.7%

BROKEN HILL

H

11%

288

$125,000

0%

4%

1.5%

SUSSEX INLET

H

11%

80

$490,000

-2%

-7%

5.5%

COBAR

H

10%

49

$140,000

-14%

-35%

-2.4%

WELLINGTON

H

10%

92

$147,500

-1%

-8%

1.3%

DARLINGTON POINT

H

9%

17

$150,000

-8%

-22%

The average time it takes for a listed property to be rented in Perth fell by 13 days to 21 days in August, the quickest days-to-lease since the mining boom in 2015, according to the Real Estate Institute of Western Australia (REIWA).

Homes in Maddington are the fastest to be rented, staying in the listings for only seven days.

Other suburbs with short days-to-lease times are Armadale (nine days), Coolbellup and Wanneroo (10 days), and Secret Harbour (11 days).

The fall in days-to-lease is just one of the factors indicating strong demand in Perth’s rental markets, said REIWA president Damian Collins. “The high demand for rentals has seen rental stock on reiwa.com fall 10% on July, with 3,205 properties for rent at the end of August. Based on present levels of enquiry we expect stock levels to decline further in September,” he said.

Increasing demand in the rental market is likely to translate to gains in rents, Collins said. In fact, while overall median rents in Perth remained stable at $360, the rental rate for houses had already increased by $10 to $380.

Area

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

1.4%

rent

yield 3.9%

Metro (H)

$465,000

0.0%

-2.1%

$360

BOGGABRI

H

9%

20

$187,500

4%

-5%

4.3%

Metro (U)

$340,000

-1.1%

-2.9%

$330

4.7%

ROSEDALE

H

9%

13

$826,000

-2%

25%

8.4%

Country (H)

$330,000

1.0%

0.0%

$350

5.5%

COONAMBLE

H

9%

34

$120,000

17%

41%

5.9%

Country (U)

$170,000

-2.5%

-11.4%

$300

8.0%

www.brokernews.com.au

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27

29/09/2020 3:08:58 PM

DATA

NORTHERN TERRITORY

Darwin remains the safest capital city, with minimal impacts from COVID-19 The spring market is usually “not noticeable” in the NT in the way it is in the eastern and southern states, according to Jeremy Callan, a property valuer at Herron Todd White. “Peak seasons, particularly in Darwin, are in the winter months, with transactions occurring steadily throughout the year,” he said.

Still, Darwin’s housing market has been showing steady growth this year. Callan said many regions in the territory recorded strong gains in sales activity during the second quarter. For instance, the North Coastal region registered a 26% increase in sales in the June quarter. It also posted 11.7% growth in dwelling values over the quarter.

“While we are not yet seeing dramatic rises across the market at this stage, typically speaking the first signs of a recovery are the rise in transaction numbers. COVID-19 appears to have had little effect on the Darwin market, and the days on market are dropping dramatically,” Callan said.

Listings are also down in the North Coastal Region, which, Callan believes, could potentially help maintain the prices.

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Metro (H)

$473,250

-0.3%

-5.1%

$450

5.0%

Metro (U)

$269,000

-5.0%

-9.5%

$350

6.4%

Country (H)

$387,500

-0.2%

-1.4%

$480

6.1%

Country (U)

$328,500

3.0%

0.3%

$364

6.1%

ADELAIDE Total auctions

50

Cleared

32

Uncleared

18 64.0%

Clearance rate

PERTH Total auctions

8

Cleared

5

Uncleared

3 n.a.

Clearance rate

MEDIAN HOUSE AND UNIT PRICES

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Units

Sydney Melbourne Brisbane

Adelaide

Perth

Darwin

$442,500

$706,000

$480,000

$530,500

$418,000

Hobart

$300,000

$0

$337,500

$100,000

$458,000

$200,000

$333,000

$300,000

$490,000

$500,000 $400,000

$380,000

$700,000 $600,000

$500,000

$800,000

$528,500

Fiona Nield, the Housing Industry Association’s executive director for Victoria, says the state’s COVID-19 Stage 4 restrictions have affected overall housing market activity in August. The expected boost from the HomeBuilder scheme failed to materialise in Victoria in August, and overall sales of newly constructed dwellings declined by 14.4%.

The sales decline overturned the increases recorded in the two previous months.

“During Stage 4 restrictions, Victorian homebuyers have been unable to visit display homes and meet with builders around all the critical decisions necessary for contract signings. August’s results clearly reflect this situation,” Nield said.

The continued moderation could impact the number of homes commencing construction later this year and into 2021, she added. The social restrictions are also preventing many homebuyers from accessing the HomeBuilder scheme, which only runs for a limited time. “To be eligible for the grant, homebuyers need to sign a home building contract by 31 December,” Nield said.

Houses

$900,000

$650,000

The second lockdown in Victoria has taken a toll on monthly housing sales

Area

The combined capital city preliminary auction clearance rate came in at 72.4% in the first week of September, the highest recorded since early March, so it will be interesting to see how it holds up as final results are collected. The previous week recorded a preliminary clearance rate of 67.3%, which revised down to 63.0% at final figures. This time last year, the combined capitals recorded a final clearance rate of 70.7%.

There were 918 homes taken to auction this week, up from 816 last week and significantly lower than this time last year (1,983).

Auction activity remains extremely low across Melbourne, with just 11 homes taken to auction this week. Of the results collected so far, all seven were successful, with five selling prior to auction and two selling on the day. Sydney was host to 679 auctions this week, up from 600 held last week and 646 at this time last year. Of the 562 auction results collected so far, 72.4% were successful, up from last week’s preliminary result of 70.4%, which revised down to 65.9% at final results. This time last year, Sydney recorded a final auction clearance rate of 72.7%.

$650,000

VICTORIA

WEEK ENDING 14 SEPTEMBER 2020

$795,000

Area

CAPITAL CITY AUCTION CLEARANCE RATES

Canberra

CAPITAL CITY HOME VALUE CHANGES Capital city

Weekly change

Monthly change

Year-to-date change

12-month change

Sydney

-0.1%

-0.3%

1.6%

9.6%

Melbourne

-0.2%

-1.2%

-2.1%

5.3%

Brisbane

0.0%

0.1%

1.0%

3.5%

Adelaide

0.3%

0.2%

1.5%

2.9%

Metro (H)

$720,000

0.7%

4.3%

$420

3.0%

Metro (U)

$576,000

0.9%

8.4%

$415

3.7%

Perth

0.0%

0.2%

-1.2%

-1.9%

Country (H)

$385,000

1.3%

6.4%

$345

4.7%

Combined 5 capitals

-0.1%

-0.4%

0.2%

6.1%

Country (U)

$308,000

1.4%

9.1%

$280

4.9%

28

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

www.brokernews.com.au

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29/09/2020 3:09:17 PM

BRISBANE CANBERRA Total auctions

65

Cleared

58

Uncleared

Total auctions

42

Cleared

26

Uncleared

16 61.9%

Clearance rate

7 89.2%

Clearance rate

SYDNEY Total auctions

679

Cleared

407

Uncleared

155 72.4%

Clearance rate

TASMANIA

MELBOURNE Total auctions

7

Total auctions

2

Cleared

7

Cleared

1

Uncleared

0

Uncleared

1

Clearance rate

Clearance rate

n.a.

SOUTH AUSTRALIA

Area

n.a.

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Tenants to benefit from extension of land tax relief for landlords The SA land tax relief scheme has been extended until the end of April 2021 and will now include eligible commercial owner-occupiers. Landlords can apply for up to a 50% reduction of their land tax liability for FY2019/20. In return, they must pass on the full benefit to COVID-19-affected tenants. Treasurer Rob Lucas said that by helping landlords the state would also be able to support tenants and ensure local jobs were sustained.

“Rent can be one of the biggest fixed costs for a small business or residential tenant, and this scheme complements the work of many landlords who have been working with their tenants and financial institutions to find an effective way through this period,” he said.

SA has also extended some provisions of the COVID-19 Emergency Response Act until March. “To ensure that measures … are not exploited, we have narrowed the focus of the Act so that the prohibition on rental increases only applies if the tenant is experiencing financial hardship as a result of [COVID-19],” said state attorney-general Vickie Chapman.

Metro (H)

$470, 000

1.1%

2.2%

$380

4.2%

Metro (U)

$335,500

-0.4%

-0.7%

$325

5.0%

Country (H)

$270,000

0.0%

1.9%

$270

5.1%

Country (U)

$220,000

2.2%

6.0%

$210

5.2%

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

NICK YOUNG: TRAIL BOOK SALE EXPERT Sell your book. Keep your clients.

Release working capital or start succession planning.

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

26-29_AB1719_Housing_Market_Data_SUBBED.indd 29

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29/09/2020 3:09:40 PM

PEOPLE

IN THE HOT SEAT

Mortgage broker Kathy Dundas has a simple and straightforward business name, and No Fuss Home Loans aims to do exactly what it promises: deliver stress-free and seamless finance solutions. While her journey through the industry has been littered with changes, Dundas says finance will always be her ideal career

What was your first job before you joined the finance industry?

My first ‘real’ job after leaving school was as an office junior at a A legal firm in Sydney. This quickly turned into a paralegal position in the conveyancing department, which was my first taste of a customer service role in which I worked closely with clients, lenders and other legal teams to ensure that deadlines were met. I also loved the problem-solving aspect of this role.

Q

What was your first job in the finance industry? four years in conveyancing I was offered a job at a newly A After established US asset finance company as its contracts manager.

I stayed with them for several years until just before my first child was born. I was a stay-at-home mum for five years, and had another child during that time. I felt that I needed to return to the workforce, but I was looking for a flexible option. A close friend’s husband was a mortgage broker, and after talking to him about what that involved, I thought that with my conveyancing and finance company background, broking would be a good fit for me. I set up my business from the spare room and was able to arrange my working life around my family commitments. As my children became more independent I was able to spend more time in the business but still be there if they needed me. It turned out to be the perfect working solution.

Q

Q What has surprised you most during your career in finance?

Just how quickly things can change. It’s an industry in which you A cannot afford to be complacent and expect to do well. You need to ensure that you are on top of all aspects of lender policy, SLAs, rate and product changes, not to mention regulations. The last 18 months have seen so many changes, and we have faced not only a pandemic and sudden economic change but also the fallout from the banking royal commission and the regulatory changes that were born from there. I am surprised at how resilient and supportive our industry is. You would expect it to be extremely competitive, but I find that generally we are happy to offer advice and assistance to each other, which is so important.

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Kathy Dundas, mortgage broker/owner, No Fuss Home Loans

If you could change anything about the broking industry, what would it be?

My pet hate is the broker tiering that some lenders still have in A place. I have never put a significant volume of applications with any lender, as I believe in providing customers with a choice based on which lenders best suit their circumstances. Unfortunately this means I am not a platinum-, diamond- or gold-level broker with any lender, and because of this my client’s application is put to the bottom of the SLA ladder.

I strongly believe that all applications should be treated as equal and am at a loss as to why my client is disadvantaged because I do not push all applications to the one lender. My hope is that when the best interests duty comes into play our industry bodies will address this bias and we will finally all be on a level playing field. AB

Q

www.brokernews.com.au

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