Brokers can claim deposit bond before loan is approved with Deposit Power

by Micah Guiao21 Oct 2021

Deposit Power has launched a home equity assessment option in its platform that allows brokers to acquire the deposit bond before the loan is approved.

Grant Bailey, general manager of Deposit Power, said this new function is “most advantageous for the asset-rich, cash-poor clients” and “enables [them] to bypass the stress and frustration of missing out on a property” from waiting on lender approval.

This also enhances the platform’s paperless application that eliminates the need for face-to-face interaction to facilitate a bond, which has been ideal in light of the pandemic.

Deposit Power charted 64% year-on-year growth in revenue for the period ending June 30, attributing this surge to broker-led transactions that correlate with the continued resilience of the property market.

The demand for larger bonds in metro and sub-metro green belts was due to record property prices with increased broker use. As such, Deposit Power continues to facilitate higher bonds that are often above $500,000.

“There’s an increased appetite for resales that coincide with organisational restructures, redundancies, early-retirements and role reconfigurations that have been accelerated by economic uncertainty as well as widespread acceptance of hybrid work-from-home structures,” Bailey said. “As such, there’s been significantly more demand for longer-term deposit bonds for regional areas, as purchasers actively seek sea and tree changes.”

Bailey also observed an unusual change when it comes to bond usage.

“Historically, bonds have primarily been utilised for completed property. However, there’s a noticeable uplift in off-the-plan purchases in the wake of stock shortages – particularly at the high end of town,” Bailey said. “A prime example is a couple who recently required a $540,000 deposit bond to facilitate a COVID-driven sea change from a house in Sydney to a luxury off-the-plan penthouse in Queensland.”

Ultimately, the deposit guarantee firm is expecting continued growth in the spring and summer months, especially in the NSW market amid its lifted restrictions.