Recently, we have seen the clampdown by the Australian Prudential Regulation Authority on investment property lending and interest-only loans. APRA is trying to cool the housing market by preventing investors from over-committing themselves, with stronger limits on Australian lending practices and assessment.
This is a monumental regulatory intervention, with profound consequences for the market. We decided to conduct a specific analysis of Google search trends to understand how this is impacting online borrower behaviour. Property investors have become very "curious", to say the least; we detected a huge increase in search volume for "investor loans" and related keywords.
In fact, we were surprised to discover that searches have jumped by more than 36,000 per month since December 2015.
Online behavior of investor borrowers
It seems the APRA changes are really starting to bite out there in the market. Investors are turning to the online channel for solutions and in a big way. This large spike of Google search traffic for "investor loans" is a really interesting opportunity for brokers.
Nowadays, when someone has a question or problem, the first place to search is Google. Thanks to the hyper-connected age we live in and the explosion in smartphone usage, people have made online search an integral part of their daily life, creating millions of opportunities for those who have something to offer.
Search engines are there to give us answers anytime we need them — and that answer can be your business or website. That’s why it’s so important to have a decent online presence.
The data shows that Google search volume for investment loan finance has actually grown by 52 per cent over the last 18 months. People need brokers and mortgage advice more than ever, and they are looking for it — but many brokers are invisible online.
Google trends show opportunity for brokers
For property investors, credit is now both harder to get and more expensive. Brokers are perfectly placed to help investors solve this problem. However, a lot of their initial shopping around is occurring on Google.
The traditional way of getting leads through referrals will always work, but it’s important to acknowledge that the fastest-growing channel of investor loan leads is the online mortgage space.
Brokers and aggregators must adapt to this change to thrive in what is a becoming an online world.
Indeed, the younger generations are growing up surrounded by technology; they are our future borrowers and increasingly they are going through the internet to find a home loan. Mortgage brokers need a digital presence to pick up some of this enquiry.
However, we know from our recent Broker Digital Pulse Survey that one in five brokers still does not have a website — in 2017! This is not just careless; it’s commercial folly. It is true that there is a lot of competition online, but the opportunity is vast and growing. Every hour that a mortgage broker is out of the digital channel, there's a possible hot lead that is taken by a more savvy competitor.
Some brokers I meet think they can’t afford the online channel as a method to grow their business. They couldn’t be more wrong. The internet is a great leveler; even the smallest business can compete with huge corporations for clicks, traffic and leads. There is no favoritism; all companies are at the same level with the same tools. Budget plays a limiting role in lead volume, of course, but it’s very possible to win customers online over banks, particularly if you target specialist niches and localisation.
How brokers can target investors online
It’s clear that the opportunity for investor loan leads on Google is massive. Yet most brokers (understandably) have limited knowledge of Google AdWords and the landing page optimization techniques that are required to convert traffic into cold, hard leads. So, here are a few basic things that brokers like you can easily do to at least get in the game:
To get more sophisticated and develop a new lead flow from the extra web traffic arising from the APRA changes:
Solving problems for customers is at the heart of any business venture. And right now, property investors have the biggest finance problem, in the largest numbers. Can you afford to ignore this online opportunity?
Darren Moffatt is CEO of mortgage lead generation firm Wealthify.com.au. He is also director of Webbuzz digital marketing agency, and the founder of reverse mortgage broker, Seniors First.
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