As we come out of the regional boom, brokers share what trends they’re starting to see in 2023
Borrowers educated on rates
PEOPLE ARE now acutely more aware of their rate and repayment, where for the last few years most borrowers couldn’t have told you what their rate was. We have definitely seen a move away from frenzied purchasing of new properties into refinancing [as borrowers become] conscious of rate and debt consolidation.
We are having lengthy discussions with customers around how the lender and rate they choose affect them and giving them projected figures for repayments at higher rates so they can start considering what impact this will have on their weekly household expenses.
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Purchasing a property if you work for a small regional company has become incredibly difficult, so we also spend a lot of time prepping customers to get in to the market and also giving them the information on what they will be spending once they are in to their new home.
Karen Bashford, South Coast Business & Financial, NSW
Less construction, more refinances
IT HAS changed a lot. We were horrendously busy for the first half of 2022; we did a lot of construction off the back of the First Home Owner Grant and refinances were still huge with the low interest rates and people looking to capture that.
[More recently] we’ve seen property prices skyrocket … and not huge amounts of purchases. The predominant loans we get now are refinances — at least 50–60 per cent of what we’re doing is refinances. There is practically no construction.
We are seeing first-time buyers buying, as part of the regional schemes, [as well as] upgraders — people looking to buy their next property essentially. But, once again, there’s not really too much purchasing going on (as a percentage of business). South Australia more broadly has resisted the [property price] declines to date, as there’s a lot of demand holding those prices up.
Mark West, Loan Market Clare Valley, South Australia
Acreage well sought after
WE’RE DEFINITELY not seeing what we saw 18 months ago, with regard to that tree/sea change. But the rural properties on a few acres are still very sought after, people still want that lifestyle.
What we are seeing is quite a lot of downsizing. The locals who may want to downsize are still doing that. I think, with the instability in the market, people have [thought]: ‘If we don’t do it now, who knows what the market is going to look like in 12 months’ time?’.
The construction space is the scariest for people; the price has gone up significantly. Not knowing the financial position of some of these construction companies is scary for clients. And, like everywhere, local builders have been in a position where they need to shut down — that’s not good for anyone; not the local trades nor the first home buyer etc.
Jaime Savory, Gippsland Finance Solutions, Victoria
First home buyer activity increases
IN GLADSTONE, first home buyer (FHB) activity continues to increase, which is obviously in contrast to the city markets.
We only do a small amount of construction loans for FHBs because building costs have gone up. We’ve had clients who have upsized from modest three-bedroom homes in Brisbane, which they’ve sold for $760,000, and purchased acreage with two homes on it and a large shed for $830,000!
The FHB segment is targeting a really broad array of stock but the median is in the $400,000–$450,000 price bracket. You can find a perfectly fine established four-bedroom house for that money in the area. Affordability remains a key drawcard for the Gladstone market.
[In addition] we’re finding the financial literacy of younger buyers is improving — they’re maybe even more on top of their finances than some clients in their 40s and 50s.
Chris Maguire, Loan Market Gladstone, Queensland
