8 ICONIC HOME LOANS
Growing rapidly despite WA’s faltering economy, James Pibworth’s brokerage is dominating the state’s construction finance sector.
Unlike investor lending, construction finance has had a relatively low profile in recent years. But not for much longer, it seems: construction finance is at the core of Iconic Home Loans, one of the most exciting up-and-coming brokerages in this year’s list, which took on nine brokers in the several weeks prior to speaking to MPA.
James Pibworth founded Iconic after moving to WA from the UK. “I came over here, went to a brokerage that was part of a building group, left after six months and went to another building group to do it on my own, which I did,” Pibworth recalls. From there, it was a matter of building relationships: “We managed to get an agreement with the second-largest building group in WA, which we still have, and they have five companies and around 80 sales reps.”
Last year saw them take on the largest building group in the state – which approached Iconic – and this reflected the brokerage’s established reputation in the sector. Those building companies wanted a specialist, observes Pibworth. “Construction finance is a lot harder than normal finance; it takes a lot longer to go through. It’s a lot harder to attract brokers initially, because it takes a lot longer to get paid: almost 12 months back then, because of the land titles.”
Construction finance also necessitates a large supporting team, given it may take three to four months for the borrower to just accumulate the deposit. “The support staff work on the deal after lodgement and coordinate the builder, the client, the land developer, the settlement agent and the lender,” Pibworth explains. “They’re coordinating between five parties for a long, long time.” They also spend a lot of time on aftersettlement service. “We have office brokers now; retention brokers that go through the list and call them all. We’ve got a billion-dollar loan book now, because we’ve been so busy on the front end initially.
Growing rapidly and hiring new-to-industry brokers in a sector with such a large lag time makes managing costs “very difficult”, notes Pibworth. “I’m bringing in a lot of brokers and many are on salaries or a retainer … now the turnaround time is a lot quicker, six to eight months, but it’s still a long time for me to pay all those wages before the money comes in; we’re talking about an extra $900,000 in wages.”
Difficult it may be, but for a brokerage to grow so fast in WA’s faltering housing market is no small achievement. Iconic is diversifying its income base through first home buyers, and Pibworth is confident it can continue to grow. “We’re well known, we have got a lot of leads, and we’re a young, likeable company … the team plays together very well, and we’re quite cautious in terms of our culture and who we bring in.”