“Easy transition” to commercial property finance

by Rebecca Pike11 Dec 2018

A non-bank finance group is reassuring mortgage brokers that there are additional streams of funding if commissions are to be abolished after the Royal Commission.

The principal of Chifley Securities, Dominic Lambrinos, said if there were any changes it could impact the thousands of mortgage brokers across Australia and “many of them will not have a viable business or career if trail commissions are phased out.”

Chifley Securities, which lifted its lending to developers and landowners from $1.45 billion to $2 billion in the 2017-2018 financial year, now works with 3,000 brokers and is looking to double this number over the next year.

Lambrinos said, “Shorter term lending by non-banks like Chifley Securities provide upfront commissions of up to 1%, with this to rate to be paid again when the loan rolls over.”

Chifley’s loans can range between $5million and $300million and aims to deliver settlements in up to two weeks.

Lambrinos added, “Non-bank operators are becoming more sophisticated as our share of lending grows and we are partners with brokers, who are often treated as servants by traditional lenders.

“Mortgage brokers can make an easy transition to commercial property lending through our training and support programs and gain another income flow, which sadly I expect will be required with the expected changes to trails.”

He added that property developers across the country, including in the traditionally stronger markets of Sydney and Melbourne, are facing further pressure from the major lenders, with the gap being filled by non-banks.

He said, “We are also seeing an explosion in the number of private investors entering the market, especially large and small foreign funds, which are keen to finance projects and prepared to work with Chifley Securities and it’s brokers to gain access to this asset class.

“This is creating a pipeline of loans which brokers can tap into by diversifying from their traditional mortgage base.”

Over the last year Chifley has adopted an aggregation division to provide access to funds for larger, prominent broking firms finding it more difficult to gain funding from the major lenders for their clients and have limited access to private lenders.

The Chifley Aggregation Group has experienced loan volumes worth $1.1 billion over the last 12 months and expects strong growth in the division over the next year as the market tightens further.