Deposit Power reports 64% growth in 1 year

Speaking of the revenue spike, Deposit Power general manager Grant Bailey said that the combination of record property prices and increased broker use across all of its aggregator and lender partners drove demand, “particularly for larger bonds in both metro and sub-metropolitan green belts”. 

“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,” he added.

“As such, there’s been significantly more demand for longer-term deposit bonds for regional areas, as purchasers actively seek sea and tree changes.” 

Mr Bailey added that he had noticed a change in consumer activity, stating that, while historically bonds had primarily been utilised for completed property, there has been a rise in off-the-plan purchases in the wake of stock shortages, “particularly at the high end of town”.

“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,” Mr Bailey explained. 

Deposit Power is forecasting that this market activity would continue throughout the spring and summer months, particularly for the NSW market. 

“We had expected sales to flatten given the lockdowns in both NSW and Victoria in the past three months but our revenue growth in September was more than 50 per cent up on 2020,” Mr Bailey said. 

“I think now with the lifting of restrictions in NSW and hopefully Victoria very soon, we will see those sellers who were waiting for the easing of restrictions now deciding to list. 

“So we expect the strong property market to continue for the remainder of 2021 and into 2022.”

In addition to its revenue increase, Deposit Power concurrently announced that it is introducing a “home equity assessment option” to its platform, enabling brokers to acquire the deposit bond before a loan has been approved.  

According to the deposit bond provider, this is particularly useful for "asset rich, cash poor clients".

Mr Bailey said that it enables purchasers to "bypass the stress and frustration of missing out on a property due to the lag in lender approvals” and “enhances the platform’s signatureless, paperless application that eliminates the requirement for face-to-face or manual interaction to facilitate a bond”. 

[Related: BOQ reports strong broker uptick]