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Looking ahead in 2018 – is that opportunity knocking?

2017 was a fantastic year for finance brokers filled with opportunity, resulting in many of you writing record volumes and the collective broker industry accounting for 55.7% market share for residential mortgages written, a commendable result. With the Royal Commission into banking set to kick-off this year, combined with the ongoing macro prudential limits, the opportunities for finance brokers to extend their share is likely to continue.

Now, let’s take a look at what’s in store for the Australian economy this year.

Interest rates

With the cash rate at an all-time low, experts are predicting the first rise to be almost a year away and inflation unlikely to hit 2% until the end of 2019.

At a luncheon in Sydney on 21 November 2017, Mr Lowe, Governor of the Reserve Bank of Australia (RBA) commented that although the mining investment boom had all but wound down, the labour markets in Queensland and Western Australia had shown significant signs of improvement.

The unemployment rate is at 5.4%, and the RBA considers this to meet “full employment” status.

With this in mind, low interest rates continue to support the Australian economy and some households may use this period of low interest rates to pay down or consolidate debt.

Property prices

2017 certainly proved to be eventful, particularly in Australia’s south eastern capitals that once again saw double-digit house price growth, fuelled by low interest rates, strong population growth, lower-than-usual market turnover and an abundance of investor activity.

However, with the introduction of tighter macro prudential measures from Australia’s banking regulator APRA at the end of March, the property market cooled in the second half of 2017, especially in Sydney and to a lesser degree in Melbourne. Annual house price growth has more than halved on a national weighted basis, largely due to a recent pullback in Sydney, with property values which have now been falling for several months. Melbourne price growth has also slowed, but still remains in positive territory. Cameron Kusher, Research Analyst from CoreLogic says that “although house prices will weaken a touch in 2018”, compared to more bearish forecasters, says that “it’s unlikely to be anything more sinister than that, especially given the likelihood interest rates will be left unchanged by the RBA”.

Cost of living

Chris Richardson from Deloitte Access Economics says last year was a “better year for the economy and this year should start to improve for families”. Wage growth may finally start to pick up, and move higher for the first time in a while. The Federal Government is also flagging that there will be income tax cuts.

So what does this all mean for finance brokers and the mortgage industry generally in 2018? It smells very much like opportunity to me.

Plans for 2018

With the recent announcement of our strategic partnership with Blackstone, we have so many great plans for the New Year and we will begin to update you on these initiatives shortly, but I can tell you in 2018, we will be releasing new products and enhancing our existing product range, and expanding both our credit and sales teams to further improve our reputation as the “brokers choice” of specialist lenders.

Plans are not untypical with the coming of a New Year as it is a time of optimism, and while our plans are well advanced and have been in the making for some time, it is also for many, a time for reflection.

Did I achieve my goals? Am I setting new ones? Who can forget those New Year's resolutions that so often fall by the way-side "I’m going to manage my finances better", "I'll start saving again" or, "we will take that long promised holiday".

Often, in order to pursue the financial goals mentioned above, the setting of a new budget and a complete review of the financial situation is required in order to make them happen, which for many can mean refinancing.

Whilst this financial makeover may be a straight-forward process for many, some of your clients may encounter a few financial road blocks along the way, owing to exceeded credit card limits (even more so when those Christmas expenses come home to roost) or the odd missed payment or default on their credit report which won't pass the bank's credit score even if you try.

Whether it is to consolidate debts in order to start fresh and move forward, a simple equity release exercise to make the overdue holiday a reality, or perhaps even to buy that investment property, we can assist as our broad range of products has been designed to remove these very road blocks, allowing you to meet your clients’ requirements and objectives.

Watch this space!

We look forward to bringing you more news on La Trobe Financial and our products as we head into 2018, so watch this space.

Best BDM Team is only a phone call away

Want to achieve the best service? Call one of our credit team directly on 13 80 10 or arrange an appointment to see your Senior Manager Client Partnership in person to discuss these opportunities.

Our committed sales team is ready and available to assist

Real Estate Credit - Providing Alternative Lending Solutions

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We wish all of our business partners a very successful 2018.

Cory Bannister

Chief Lending Officer

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La Trobe Financial Services Pty Limited ACN 006 479 527 Australian Credit Licence 392385
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Copyright 2018 La Trobe Financial Services Pty Limited ACN 006 479 527. All rights reserved. No portion of this may be reproduced, copied, or in any way reused without written permission from La Trobe Financial.

This publication does not constitute financial advice and should not be relied upon as such. It is intended only to provide a summary and a general overview on matters of interest and it is not intended to be comprehensive. You should seek your own financial or other professional advice before acting or relying on any of the content.