The Australian Lending & Investment Centre
Total value of residential loans FY2016/17: $163,589,589
Total number of residential loans FY2016/17: 499
Kevin Agent has a saying that neatly sums up the impact of regulation on brokers: “It’s 25% less fun and 25% harder.” Agent’s brokerage, The Australian Lending & Investment Centre, has turned itself into Australia’s most successful brokerage through a dogged focus on property investors, winning multiple Australian Mortgage Awards in the process. Now the tables have turned and Agent is tasked with managing increasingly frustrated clients.
“The reason that it’s APRA only washes so far,” Agent says. “We say to the clients, ‘That’s life: the market isn’t driven by the RBA any more; it’s driven by the banks’ balance sheets’.”
He also needs to manage expectations. With strong rises in property prices, a number of would-be investors are seeking finance without understanding quite how much bank standards have changed in recent years. Furthermore, Agent says, “the younger generation hasn’t been through a recession and they haven’t seen interest rates at 10–15%; and there’s a naivety that rates at 4–5% will be around for a long time.”
In addition to dealing with existing investors looking to transition from interest-only to principal and interest repayments, Agent also deals with early and even potential investors. “We can deal with clients under 30 who are on $60,000 a year; we may do nothing with them, but we’re spending time on budgeting and long-term plans are.”
That includes a high number of ‘rentvestors’; in fact it often makes more sense for these clients to purchase cheaper investment properties rather than maximising their borrowing capacity – and repayments – on large properties to live in.
Despite all the changes over the past year, Agent is optimistic. “The margin between owner-occupied and investment will come back again as the profiles of the banks change and they meet their cap.”
He’s still getting new clients who can no longer go straight to the bank, and like all ALIC’s clients he looks to keep them for the long term. “The ultimate goal for the business is still to get to $1bn a year,” Agent says. “We’re aiming in the next two or three years to hit that.”