A year on from COVID-19 hitting Australia’s shores, regional mortgage brokers have never been busier as the demand for residential property outside the capital cities shows no signs of slowing down.
The ability to work remotely, cheaper property prices, the attractions of a coastal or country lifestyle, lower housing densities – all these factors are contributing to a property boom in Australia’s regions.
CoreLogic’s latest regional market update for the 12 months to January 2021, which looks at capital growth in Australia’s 25 largest non-capital city markets, shows that regional housing values rose by 7.9%, more than four times the pace of capital city markets at 1.7%.
Australian Broker caught up with four award-winning regional brokers in Mandurah, WA; Darwin in the NT; and Lismore and Wollongong in NSW to find out how brokers in the regions operate and the reasons behind their success. We also spoke to NAB’s head of commercial broker to find out how the bank is supporting regional brokers.
Steve Milligan, Launch Finance, Mandurah, WA
Steve Milligan has won a number of broking awards, including MFAA WA Regional Broker of the Year in 2018 and 2019 and the overall Regional Broker of the Year at the MFAA National Excellence Awards 2019.
He is the director and finance manager of boutique brokerage Launch Finance, based in Mandurah, a coastal city about 80km south of Perth.
Milligan started his career at Bankwest, where he spent 13 years in lending and management roles before working in car sales finance and insurance for 10 years.
He says when the GFC hit he thought it was time for a change.
“Probably the main focus for me was to go into a role that provided me with some flexibility with time and work balance.”
A mutual friend introduced Milligan to one of his now business partners, and he became a broker at Westate Finance in 2009. Milligan jokes that the work-life balance didn’t quite work out.
“My brother used to ask me to go fishing up north with him every year, and having four weeks’ designated holidays in the private sector, I’d have to say no, kids and things like that ... needless to say after about 13 years I have never been fishing with my brother.”
In 2016, Milligan and four Westate colleagues started Launch Finance. Four of them are based in Perth, while Milligan is in Mandurah.
“We took control of our own destiny. We’re a boutique group – only eight brokers, five of which are directors.”
Milligan says the directors all run their own individual businesses under Launch Finance, which operates as a sub-aggregator, so they can share the costs of marketing and a general manager.
He says the main employer in Mandurah is Alcoa, but the city is also heavily reliant on the mining industry, with a lot of fly-in, fly-out (FIFO) workers.
The WA government is trying to shift population growth south instead of north, Milligan says.
“They’ve got a place in the south called Mandurah where the train comes to; we’ve got the freeway down here, we’ve got land, we’ve got water, schools, hospitals. They’re trying to get a few more professionals because a lot of the professionals in town just travel from Perth and have a part-time office here. They want professionals who will permanently reside down here. It’s a wonderful place.”
Milligan says COVID-19 has also led to population growth, as mine workers were told they had to live in WA if they wanted to hang on to their jobs.
“A lot of people from the eastern seaboard came over, and because rentals were so hard to get they started buying property.
“I can sell my house in Perth for $650,000 – I can buy the same house down here closer to the beach for $450,000, which halves my mortgage. Suddenly I’ve only got a $200,000 mortgage, I can buy a brand-new car, have a little boat in the driveway. We’re right next to the beach; I can jump on the train and be in Perth in the same amount of time as it takes me to drive in every morning.”
While the market has continually ticked over for the last 10 years, Milligan says the past 12 months “have gone absolutely frantic, stupid”. He estimates that 50% of his business is being generated by federal and state government first home builder incentives.
“One of the interesting things is, probably about a third of my clients are first home buyers,” Milligan says.
Unlike in Perth or other big cities where first home buyers move to outer suburbs because of price, it’s different in Mandurah.
“A lot of our kids are actually staying in Mandurah. They’ll either stay here and work FIFO, work out of Alcoa, go and work in Perth, but they actually don’t mind staying.”
First home buyers in WA who were planning to build a house were able to apply for state and federal grants totalling $55,000 until the end of December 2021, which spurred a lot of activity and brought people’s plans forward.
“In July, there was a three-week period there when myself and my offsider, Paul, had over 100 new appointments,” says Milligan.
“I’ve basically worked seven days a week for 12 months, barring a couple of breaks in between. It’s reached the point now where we’re putting on some staff at the moment; it’s not sustainable.
“In our last calendar year, we were up over 60% in business written compared to the previous year.
“In Sydney you might have brokers that average $500,000 or $600,000 a deal. We average $300,000 a deal. When you are writing the numbers that we write, you can understand why we are so busy.”
Milligan says there are two main challenges to being a regional broker: postcode restrictions and property valuations.
“People in the city don’t even have to worry about postcodes. Down here we do. I know we’ve got a lender out there that does no mortgage insurance up to 85%, but not in Mandurah. I’ve got other lenders who’ve told me, I’ve got this and this, but I’m sorry, 6210 postcode, we count it as regional, we won’t do that.”
Milligan says when lenders reduced LVR ratios for mining towns, Mandurah was affected because of Alcoa. Depending on the postcode, some lenders won’t lend to particular areas, or clients might need a greater deposit, but all brokers can do is tell their clients.
“We’re fighting valuations as well. I tend to find valuers down here are very cautious on valuations. We’re getting huge fluctuations between two different valuers.”
The majority of Launch Finance’s customers are generated through word of mouth. Community connection is critical for regional brokers, Milligan says.
“Communities grow by putting back into communities. This community has been very good to us, so there’s certain things we do to try and put back into the community.”
This varies from employing a young woman as a casual so she can gain work experience, to sponsoring the local AFL club. Milligan has also taken part in the Variety 4WD bash for sick children and the MACA ride for cancer research.
When asked about his 2019 MFAA Regional Broker Award, Milligan says it’s nice to be recognised by his industry peers.
“I’ve got a stand with some of the awards I’ve got in the office, and I often get comments from clients that I need a bigger stand.
“It’s very good for me to be able to acknowledge to the staff that we’re being identified, our numbers are up there and what we’re doing is the right thing.”
Katrina Rowlands, Mortgage Success, Wollongong, NSW
Katrina Rowlands is a multi-award-winning mortgage broker with 23 years’ experience in the industry. Her accolades include Salesperson/Broker of the Year at the inaugural Australian Mortgage Awards in 2002 and top broker ranking in the inaugural MPA To p 100 brokers list in 2006. She is also an AFG Hall of Famer, having won 11 AFG awards, and won an Illawarra Business Woman of the Year award in 2009.
Rowlands says she started broking when she was pregnant with her beautiful twin daughters.
“We already had two children to care for, and I had worked so hard to achieve what I had to date in my career, and I really didn’t see myself being a successful stay-at-home mum,” she says.
“Prior to this I was in a financial services company in a district management role, and due to me going off to have twins, I missed out on opportunities within the company as they assumed I couldn’t possibly keep up.”
Embarking on a career in broking was one of the best decisions she’s made, Rowland says. “I didn’t return to the old job, as in the few months I spent working as a broker I fell in love with the industry.”
Rowlands initially worked with a small boutique aggregator, becoming their highest-volume broker year-on-year.
“It just became a natural progression to change to a larger industry player, so I joined AFG and set up our own company and brand of Mortgage Success Pty Ltd in 2004,” she says.
Rowlands and her small team moved into an office in Wollongong CBD and three years ago purchased a larger office in Wollongong Central shopping centre.
“In my main office I am the accredited broker with six staff supporting my business flows, including client maintenance matters. Externally to my main office I have four separately accredited brokers that write their own business and write under their own business trading names but are part of the Mortgage Success group. They are contractors to Mortgage Success.
“I am just about to bring on a fifth new writer and also am in the process of gaining accreditations for some of my team to commence writing on their own but stay under the Mortgage Success brand.”
The brokerage covers all financial products offered under AFG, including commercial, lending, mortgages, personal loans and deposit bonds.
Although Mortgage Success is based in Wollongong, about 80km south of Sydney, Rowlands says the area the brokerage covers is “huge”.
“We have no real boundaries, and with a client base spanning 23 years plus, many have migrated to other areas but stay loyal to me as their broker. I have clients in Dubai and New York, for example – even one on a ship in the Caribbean and no fixed resident of any country.”
The South Coast differs from Sydney because it provides a wonderful diversity of clients, property types and policies.
“You need to know your grey areas very thoroughly – you need to know your acceptable exceptions, and you need to know your smart credit managers that can decision well and with confidence in their credit critical thinking.
“You need to ask more questions and never assume you know an area. It keeps it very interesting and creates constant challenges for learning, and I love that.”
Rowlands says the Illawarra and South Coast real estate market is booming as Sydneysiders discover what it has to offer.
“You just need to see our traffic on weekends now to know that Sydneysiders have fallen in love with it. Prices have gone berserk, especially in the past six months,” she says.
“Stock is low and auctions are now watched with incredulous anticipation as to what someone will actually pay. Sydney money buying Illawarra property meant the prices would go up, but I don’t know that anyone expected the ferocity of the new buyers. With limited stock, FOMO is alive and well in the real estate market.”
The pandemic’s effect on Mortgage Success’s clients has been minimal. Some took advantage of deferred payments, but all are now back on track with repayments.
Time at home meant people could reconsider their goals.
“They included renovations and improving money management with consolidation of debt or simply looking at better deals on their largest debt – their home loan. COVID-19 was a chance to breathe and get out of the rat race and think.”
Rowland says regional brokers are supported as much as city brokers.
“I believe in this day and age of technology there are avenues for support for everyone and anyone who seeks it, especially during COVID where physical meetings were non-existent; location was irrelevant in many ways.”
Being a regional broker allowed Rowlands to “have the life I love, and live where I really wanted to raise my family”, as well understand what clients wanted from the area.
She says the secret to success for regional brokers is the same for all brokers – you are a professional, so act like it intentionally.
“Remember, for everyone there’s six degrees of separation, especially in a regional area. You need to ensure every transaction you manage is to the highest level of best outcome for your clients, as you will be walking down the same street as they do very often. You need to always be able to look everyone in the eyes.”
Being part of the community is also incredibly important.
“There is a saying – ‘no one cares how much you know, but everyone knows how much you care’. It has to be a demonstrated involvement in thought, word and deed, and usually cash.”
Rowlands describes herself as the “inaugural queen of awards in the mortgage industry”.
“I had a beautiful bunch of flowers delivered to me from a wonderful national manager of one of the lenders after one of my inaugural wins that held a note that said: ‘Congratulations! This is special. There is only ever one inaugural winner. Enjoy the moment’. It was a beautiful comment I dwell on, and still I celebrate every single success point.
“[Awards] are important to my career. They reinforce behaviours for me as they are tangible evidence that I am getting it right, and they create self-pressure to keep doing so.”
George Smith-Roberts, Smik Home Loans, Lismore, NSW
George Smith-Roberts won the 2019 Regional Broker of the Year award at the Australian Mortgage Awards.He says he started his career in 2014 as a mortgage broker in Lismore.
“I used to own a newsagency, and at the time I was looking to get another business going in preparation for when the newsagency finally sold,” Smith-Roberts says.
“I had previously used the services of a mortgage broker, and after a little research I noticed that there were limited brokerages locally. Essentially, I just stumbled into starting my career as a mortgage broker.”
Smith-Roberts says his brokerage has undergone a number of changes over the years.
“After originally starting out as a Choice Home Loans franchise, we moved to realestate.com.au Home Loans when it was first launched. After two years we found out that it was to be rebranded as Smartline, so I took the opportunity to leave the franchise and have now started Smik Home Loans. We have been operating under this since January 2021.”
There are three brokers working under the Smik name, including Smith-Roberts, and the brokerage focuses on residential mortgages.
Lismore is the regional business hub for the Northern Rivers area of NSW and is about 100km south of the Queensland border.
“Being a regional city, we see a great mix of different lending scenarios regularly, ranging from standard residential dwellings through to large-acreage properties, which means we are always working on something different,” Smith-Roberts says.
The local real estate market has been “crazy busy”, he adds, with demand outweighing supply by a long way.
“Sale prices are higher than ever seen. I don’t know what it will look like in 12 months, but for now it is definitely a sellers’ market in Lismore.”
The pandemic has had little effect on the area.
“We have been fortunate enough that we have been relatively unscathed by COVID. Apart from the initial federal restrictions, we have been allowed to operate pretty much business as usual, so the overall effect in our local area has been minimal for the majority of the local businesses.”
Apart from the distances needed to travel to access some services, Smith-Roberts says Smik Home Loans is not disadvantaged at all by being regional.
“It used to be the case that regional customers were more likely to use a branch lender over a broker, but this has shifted greatly in the last few years, and the broker market share is increasing rapidly.
“Whilst I believe it is still below what would be seen in a capital city, it is certainly much higher than what it used to be.”
Smith-Roberts also believes there is little difference between regional and city brokers.
“I think a good broker is a good broker, no matter where they operate. Technology advances mean that regional brokers receive the same training and support as our city counterparts, so to be honest I can’t really see much difference between a regional broker and a major city broker, other than the types of properties that we are financing.”
There are also good support mechanisms in place for regional brokers, Smith-Roberts says.
“The support network is available to regional brokers as much as it is to city brokers, as long as you take the time to access it. This is probably one of the few good things to come out of COVID, in that the amount of online training available has definitely increased over the last year.
“For me, the advantage of being a regional broker is the ability to build a really solid business, as you have the opportunity to build a well-known brand within the community, which is certainly harder to achieve in a capital city.”
It is also very important to actively be part of the community you serve, says Smith-Roberts.
“This can be as simple as sponsoring a local sporting team or advertising in the local free paper, but making sure you give something back financially is what keeps a regional community going.”
Smith-Roberts says winning the Australian Mortgage Awards Regional Broker of the Year award in 2019 was a special moment.
“It felt like all the effort I had put into learning a new career and gambling on starting a business from scratch was being rewarded. It has been great for advertising over the last couple of years and sits proudly in the office for all our clients to see.”
He has some sage advice for regional brokers.
“We don’t have an endless supply of clients in a regional town, so if you get a bad reputation it sticks and can be very hard to repair. So my biggest tip for a new broker in a regional area is, if you say you will do something, make sure you do it, and don’t promise something unless you are 100% sure you can deliver.”
Michelle Lewis, Easy Loans, Darwin, NT
Michelle Lewis won the Regional Finance Broker Award at the MFAA’s State Excellence Awards SA/NT in 2019 and has also won several awards with aggregator PLAN Australia. She has been in the residential home loan lending industry for 25 years, having previously worked at Westpac’s mortgage centre in Adelaide and also at TIO.
Lewis moved from Adelaide to Darwin 15 years ago.
“I have worked in residential lending for most of my career,” she says. “I always liked the feeling that I was helping someone achieve their goal of homeownership, but was never really interested in face-to-face with customers as I didn’t want to sell a particular bank’s proposition or product. I also wasn’t interested in having to meet targets that might not be in the best interest of my customer.”
Lewis started working at Easy Loans in 2012 and has been a broker since 2013.
“When the offer to work at Easy Loans was made, I saw it as an opportunity to take the skills I had learnt over the years and become more involved in the process of helping people,” she says.
“Being a broker allows me to connect with my customer and help them achieve their dream.”
Easy Loans has been operating for more than 20 years in Darwin. It currently has a team of eight brokers and provides a range of services, including residential and commercial lending as well as personal loans.
“I think it’s really important that we provide a holistic service to customers,” says Lewis. “Most customers will need more than just a home loan, and it’s important that we can help them with their individual journey.”
With a population of about 150,000, Lewis says Darwin’s main source of employment is the defence industry and government.
“This provides a lot of opportunity in the market for first home buyers, especially during the current climate with COVID. Due to the remoteness and defence presence, we tend to have a highly transient population.”
Lewis says the real estate market in Darwin has been quite active in the last six to eight months.
“Due to the incentives offered by both the Northern Territory and federal governments, land and construction has been extremely popular. The established market has also taken a turn for the better, with indications that property prices might be improving.”
In terms of COVID-19, Darwin has been “extremely lucky”, Lewis says. Despite initial concerns, there haven’t been any real day-to-day effects.
“Many small businesses are currently experiencing an upturn in business and confidence. Some pockets are still struggling; however, many are also trying to find ways to diversify.”
Regional brokers face different challenges to their city counterparts, including bank policies being targeted towards the major cities and not the unique features of regional Australia.
Lewis says regional brokers also face time delays due to remote locations and the more manual aspects of the loan process, such as having to post original documents.
“There also tends to be more collaboration between different brokers, banks and stakeholders – conveyancer, valuers, etc. – rather than the competition that may be experienced in major cities.”
However, Lewis says the pandemic has actually allowed governing bodies and banks to become more accessible to regional brokers, with much of the contact and training now available via online meetings or resources, avoiding the need for long travel.
COVID-19 has boosted business, but she says she’s not sure how much is coming from people moving to the regions.
“I think we are seeing many people who have not been able to spend money as they have previously, for example on travel. This means that they have been able to save and realise that they might actually be in a position where they can purchase a home. The pandemic has created lifestyle changes that previously were not considered.”
Lewis says much of Easy Loans’ business comes through word-of-mouth referrals.
“It’s important that we are also part of the community as it helps us build relationships with the people we want to partner with as they achieve their dreams.”
Receiving the MFAA award for SA/NT Regional Finance Broker was “quite humbling” and “an acknowledgement of the service I try to provide each and every customer”, Lewis says.
“I don’t think there is anything too profound about success. I think to succeed you need to be willing to work hard, provide a service to your clients and referrers, and stay true to who you are.”
Chris Thomas, executive for commercial broker, NAB
Chris Thomas says NAB has a long-standing history of backing brokers and their business customers in regional Australia.
“We are a strong supporter of agribusiness and have a broad distribution footprint across regional Australia,” he says.
Thomas says brokers can leverage the strength of Australia’s largest business bank, which gives them access to NAB specialists across a broad range of industries, including health, aged care, agriculture, manufacturing, transport and logistics and professional services.
“Many regional businesses are experiencing the best trading conditions in several years,” he says. “Commodity prices are trading at high levels. Our farmers have had good rain and have generated a once-in-a-generation crop this year.”
Another key trend in the commercial space is the net migration effect from metro to regional areas, leading to strong demand from business customers, especially in the logistics, infrastructure and commercial property sectors.
“To support this growing demand, which has only heightened during COVID-19, we’ve invested heavily to ensure more BDMs and more business bankers are on the ground,” Thomas says.
“Our national team of dedicated BDMs continue to be available and active, both in person and via digital tools where it makes sense. As a dedicated team, they are very focused on service and on bringing the best of NAB to our brokers across the country.
“Our 600-plus broker-aligned bankers are really embedded in the local community and work in partnership with brokers to back business customers across the country via our 160 business banking centres. Their focus is on customer satisfaction and honouring the partnership we have with our brokers who referred them.”
Thomas says 2021 is shaping up to be an active year of recovery and growth.
“In such a dynamic environment, we understand brokers are looking for predictability and reliability from their lender partner.
“Our deep understanding of the business landscape places us in a strong position to understand this. We remain committed to working in partnership with brokers to quickly develop the best banking solution for their customers so that they can get on with business.”