The property market looks set for a subdued 2013 - but there's plenty of opportunities for brokers to make good. We speak to Brett Halliwell of Advantedge, Allan Savins of Resimac and Sam White of Loan Market for their thoughts on the year ahead.
Video transcript below:
Donna Sawyer, Australian Broker TV
Donna Sawyer: The property market looks set to remain subdued in the year ahead, but there is plenty of business to be made for mortgage brokers who heed this advice.
Brett Halliwell, Advantedge
Brett Halliwell: Those brokers that are clear about who they are, what they do and who they do it for tend to get the lion’s share of the business. Certainly from our perspective we like to see brokers who offer good compelling products that meet their consumer needs.
Allan Savins: It’s clear to me that Mortgage broker is the key to the client relationship. They are in a rather unique position where they get to go into the borrower’s homes, they see how they live, they see their aspirations as a family, they can strike up a personal relationship with them. And I think once that relationship is held and the borrower has the confidence in the home loan going through the broker, there is a tremendous opportunity for the broker then to introduce an array of other financial services.
Sam White, Loan Market
Sam White: I think first thing I tell all our guys is, you cannot see everything a client that you get referred on, a lot of people pre-qualify over the phone. I think one of the important things is to get out and see every single customer because even if they don’t qualify for a home loan, what you are doing is you are getting a customer for the future, you are getting a customer from which you can get new referrals and my advice would be to do that.
And while industry commentators agree that the RBA
is likely to continue to cut interest rates in 2013, hopes are high that confidence will return to the market.
Sam White: Well I think we are going to see more interest rate reductions, which is going to be a positive for the real estate market. Obviously the top end has still been quite subdued over the last 12 months, unless confidence changes in the business community I don’t see that changing significantly next year, although we are seeing some strength in the, the bottom and middle end of the markets and with interest rates reducing, I think confidence will be increasing and we should see some more strength in that sector of the market.
Brett Halliwell, Advantedge
Australia is really in a blessed position, when you have a look at where we are at, we have got 5% unemployment which most economists would say is actually full employment, inflation is under control, we have got near zero government deficits, so we are in a very very good place. The one part that has been missing a little bit, is consumer confidence and that’s what the RBA
has been trying to drive. So I think it’s likely we could see cuts of upto about 50 basis points during the course of 2013, which would get the RBA
cash rate from 3% down to about 2.5%. I think that would provide a good underpinning for the Australian economy going forward into 2013.
Allan Savins: Interest rates are relatively academic from a new growth perspective, because of the confidence factor that people are concerned about their jobs, they are concerned about what’s happening globally in the economy, they are concerned about rising utility costs. So I think all that is playing a part in not driving incremental growth in what rates are.
Donna Sawyer: The year ahead may be tough for some, but those brokers who lay the groundwork now and invest in their business will reap the rewards.
Sam White: Good brokers have gotten better. Those who have invested in their businesses put on maybe administrator or personal assistant, those put on loan writers and invest in maybe in marketing have started to see the benefit of that. We saw in those recent surveys of top 100 brokers and the lead broker surveys, both of those groups are writing more more and that’s I think fundamentally a recognition that for brokers to continue to add value, they are going to need to continue to invest in their businesses and look for new ways of adding value to their customer.
Allan Savins: We are seeing many businesses now changing from their traditional sole operator business, we are seeing brokers hiring other admin staff, renting premises, forming relationships with other brokers or at the credit rep level or maybe in partnership, so we are really starting to see I think an evolution of business growth and investment in the broker space and I think those opportunities will continue in 2013.
Brett Halliwell: It has something of a trend over recent years for the branch network to be less popular. We see a growth in the online space and we certainly see a growth in broker distributed home loans.
Donna Sawyer: This is Donna Sawyer reporting for Australian Broker TV.