Market heavyweights have declared the housing boom over - so how are good brokers advising their clients? We speak to MARK DE MARTINO of Loan Market and SARAH WELLS of redconcierge for their thoughts on the changing role of the broker.
Video transcript below:
Donna Sawyer, Australian Broker TV
Donna Sawyer: Mortgage brokers are being urged to stay positive after a major bank boss declared the housing boom gone for good. Both Wespac CEO, Gail Kelly and RBA Governor, Glenn Stevens warned the days of gaining sizable returns on property investments are over. Loan Market’s, Mark De Martino says brokers still have plenty to smile about.
Mark De Martino, Loan Market
Mark De Martino: We need to be delivering a message to our consumers that it’s important for us to have banks that are profitable and we need our banks to be profitable. Secondly we should be delivering to our consumers, the truth is that Australians have always had an obsession with property and 70% of Australian consumers own property in this country and that hasn’t changed for the last four decades or so. The brokers should also be extraordinarily be positive about the fact that a recent survey came out saying that you know, nearly 50% of consumers now use brokers and that’s up from 25% for 10 years ago. Brokers should be extraordinarily positive about that and also talk to their consumers about how they can refer us to more customers that don’t currently utilise the services of a broker, because we do an extraordinary job for our customers.
Donna Sawyer: Sarah Wells of Redconcierge says even though investors are unlikely to see the returns on property equivalent to those of days gone by, the same could be said for equities and other asset classes.
Sarah Wells, Redconcierge
Sarah Wells: I don’t believe we are going to see double digit growth in property that we have done previously and also the compound effect of it. I wouldn’t say that those types of returns are only with property. I think it’s just a general acceptance that we have to have socially moving forward, that we have to spend less and save more. I don’t think we can be as lucky as maybe some of the prior generation or some of us that are little bit older that have had property for a period of time, where we are able to buy something and within 5 to 7 years it doubled.
Donna Sawyer: So what should brokers be telling their worried clients? Mark De Martino of Loan Market says investors need to do their homework.
Mark De Martino: Yeah, look I think it’s the responsibility of our brokers to ensure that they advise clients to do their homework. It’s important that they look at fundamentals of why a property is going to be a sound purchase for them. To get advice from not only their real estate agent, find a good real estate agent and find a good solicitor, find a good property advocate, if that’s what they are after.
Sarah Wells: Talk to your clients about what their goals are, if they have I guess a more tailored requirement around what their goals are moving forward, then they probably need to go and speak to a financial planner. If they are just simply looking to invest in property, I would suggest a client to have a look at some of the good property investor books. Look online, look on Youtube, we are absolutely surrounded by information these days.
Donna Sawyer: How can brokers deal with the conflict when buying a property is not in the best interests of their client?
Sarah Wells: Our role is to educate and to guide. It’s the client’s role to decide about what they do and I think that’s really as a broker all we can do in these days is give our clients options and if they decide to go and buy a property in the current marketplace, that’s the decision they have made based on the information, the best information they have at the time.
Donna Sawyer: This is Donna Sawyer reporting for Australian Broker TV.