FHBs get more opportunities but they will not feel the “real benefits” very soon, according to top broker
With the Coalition’s win delivering massive share market growth, the confidence of general consumers in property, finance and even in the entire economy has definitely returned, according to My Home Loan managing partner and 2018 MPA Top 100 Brokers finalist Darren Liu.
Speaking to MPA, Liu explained that more opportunities are opening for SMEs to see a good housing market as traditional banks get tough on credit and become more permitting to brokers to enter the SME space due to the competition brought on by non-bank lenders.
“It may cause more problems”
Liu may be optimistic about the FHB market, but he isn’t suggesting that first home buyers will see “real benefits” very soon because the main issue has nothing to do with lower property prices but the difficulty of accessing credit.
“I question the 5% deposit policy for first home buyers that allow them to access a government guarantee from the National Housing Finance and Investment Corporation for the remainder 15%. It reminds me of the National Rental Affordability Scheme. It may cause more problems than solutions in my opinion,” Liu said.
“As long as the housing market is not coming back, buyers will have an issue on refinance or getting out from a guarantee. Remember those are first home buyers, a market with the least risk awareness and education in buying a home, you asked to leverage 95%.
“Still the great thing about the Coalition’s win is that it brings back confidence in the market. It's good already, but we still have a long way to go. More challenges to conquer.”
Ready for the worst
For Liu, the Coalition’s move to keep trail commission is “critically important” because many of the transactions brokers engage in post-settlement are non-income producing. “Trail, in most cases, is not seen as an income for brokers, but a commitment to a better customer experience and result,” he said.
“In fact, we are ready for the worst. Trail, however, will give us more confidence to run a business, to commit more to better customer service, convenience and outcome.”
Liu believes that as long as brokers provide value to consumers and help lenders create better customer experience, they deserve trail and the other commitments the Coalition made to the industry. The Coalition’s win is an opportunity for brokers to explore ways to better develop the industry’s value proposition, he said.
“We now all realise that we need to level up the industry’s service standard. The Coalition’s win has allowed us to come together more than ever to become a professional industry.”
