A deposit guarantor that helps aspiring home buyers with the upfront cost of purchasing a property has charted 44% year-on-year growth in revenue since September 2019 – a surge the group’s general manager says can be attributed to three primary drivers.
According to Deposit Power GM Grant Bailey, “Firstly, the growth is directly correlated with mortgage brokers’ increased appetite in being able to process a deposit bond in real-time, online, 24/7, which supports working remotely.
“Secondly, the deposit bond product supports the growing number of borrowers seeking to purchase property that have significant equity, but limited cash at hand.”
Thirdly, and more broadly, Bailey highlighted recent events which have occurred within the housing market.
“Our results have been directly affected by the volatility of the property market,” he explained.
“After a relatively stagnant year prior, the market started to surge in the last quarter of 2019 and remained strong in quarter one of 2020. Consequently, our year-on-year sales volume was up significantly in this period.
“Activity then grounded to a halt overnight when the pandemic hit at the end of March, which was exacerbated by the period of open house suspensions.
“We’re now relieved, and delighted to report that since July we’re experiencing the upside of the pent-up demand that’s fuelled a robust quarter – to the extent that this September was our best trading month in two years.”
As Bailey sees it, it’s now clear the “expected COVID-related price crash” will not eventuate in the housing market and, as such, demand is currently outstripping supply in many areas of the country.
“In particular, there has been an influx of first home buyers taking advantage of various government incentives which has propelled deposit bond acquisition,” he elaborated.
“Interestingly, there’s been significant interest from up-sizers, who are considering redirecting funds ear-marked for travel or renovations into a property purchase.
“There’s also been a rise of down-sizer sales that appear to coincide with organisational restructures, redundancies and early-retirements accelerated economic uncertainty.”