Double deals for brokers and the unseen trend in the mortgage market

by Mike Wood10 Apr 2021

This was a short week in Australian Broker, but no less dramatic than ever: we were at the coalface all week, helping brokers to keep up to date with our ever-evolving industry and get ahead in their work.

We spoke to Mike Hynes of Stamford Capital about mezzanine finance, a method of financing that many had thought had died a death in the Australian financing market, but is now making a rapid comeback for brokers all over Australia.

It’s an extra tool that brokers have in their back pocket to help them get big deals over the line – and, potentially, get paid twice for the privilege, too.

“One project can now yield two different deals, which presents a real opportunity for brokers,” Mike told us. “It aligns with what their customer needs. If developers can get equivalent leverage at a cheaper cost, even if it's two deals rather than one, money is money. Money coming into a development deal doesn't add a lot of value, it just pays bills. If it can be brought in cheaper, it'll only make sense to borrow cheaper capital.”

We also chatted to Peter Koulizos, Chairman of industry body Property Investment Professionals of Australia (PIPA), who told AB about an unseen hand in the Australian property boom: expats.

“The expat factor is where we have a lot of people that used to live in Australia, that may have gone overseas for work, who as a result of COVID-19 have decided to return to Australia,” he said.

“For those people living in more expensive real estate markets, like London, Hong Kong and other expensive parts of Europe and Asia, who have been earning good money, they might have liquidated their assets there.”

“When they come back to Australia, it looks relatively inexpensive compared to where they had been living so they're ready to pay that little bit extra to live in very desirable areas of our capital cities.”

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