Broking in the regions

While 2023 has kicked off at a much slower pace for new mortgage lending, regional brokers are still incredibly busy; this time, they’re busier than ever supporting clients as interest rates rise and regional property prices run hot.

Of course, this hasn’t been the case in all regional markets, with ‘hotspot’ regions, such as the Illawarra and Richmond-Tweed in NSW house prices falling by more than 10 per cent (for the year to January 2023) following huge gains, while Queensland’s coastal escapes Gold Coast (-4.8 per cent) and Sunshine Coast (-7.3 per cent) saw less significant falls, according to CoreLogic. 

With median house prices in the Gold Coast nearing the million-dollar-mark, the ‘regional’ town is a bit of an enigma according to broker director of Red10 Finance, Nick Smith. 

“Probably the biggest challenge we have in Reedy Creek and the Gold Coast is that it’s not sure if it is regional or metro!” Mr Smith said.

For example, the Gold Coast is viewed as regional by banks and even government departments — moving to ‘regional status’ in 2019 to attract students and migrants on the 491 AND 494 visa — and it was named the most popular destination for capital city dwellers moving to a regional area during the mass migration. 

“[But] for clients within the Gold Coast, some want to be seen as metro and some want to be seen as regional,” Mr Smith said. 

“For example, a professional in Burleigh wants to be treated like a metro office worker that now works from home but still expects that more professional interaction.

“Whereas a homeowner in Reedy Creek wants an old-school experience, turning up in a T-shirt and shorts and grabbing a beer after the meeting!”

With a growing population and bustling business hub, having a constant referral network and specialising in accommodation (such as management rights, motels, and caravan parks) is a key part of what makes Red10 get ahead in the competitive market, he says.

Combatting isolation in the regions 

At the other end of the country, the Mid West coastal town of Geraldton in Western Australia has a humble population of around 40,000. Loan Market broker Jasmine Bunter said she was no stranger to feeling isolated out west.

“The biggest challenge I have found being a regional broker ... is being isolated from other brokers and other businesses. Many PD days and coffee catch-ups are easily accessible for city-based brokers,” Ms Bunter said.

“[But] for us to attend a PD day usually means weeks of planning ahead, a day’s travel either side to attend and working out accommodation, working schedules, and not to mention families.”

To combat this, she said her office schedules weekly Zoom meetings with different lenders “for all our staff to be able to sit in and listen to”.

In addition, as a local resident, being active in the community through sponsorship, volunteering, and purchasing locally rather than buying online, have reaped benefits. 

“Ensuring that you have that local presence shows you are invested in the community, builds trust and a relationship with you and your brand,” Ms Bunter said.

“I always believe in supporting those who support me. Your community will be your biggest supporter in a regional town.” 

Despite the region remaining at a fairly low price point (the median house price in Greater Geraldton was $357,340 at January 2023, according to CoreLogic), it was 5 per cent up for the year.

Ms Bunter noted borrowers have been extending their maximum capacity on the back of interest rate rises and serviceability changes.

“We have found this has adversely affected how much clients can borrow. With many being first-time borrowers, we are really trying to educate [them] on the importance of paying above their minimum home loan payments from the start of their loan,” Ms Bunter said.

The migration to regional communities, increase in prices as well as the closure of traditional banks in regional towns have only highlighted the importance of the role brokers play in regional communities.

“Many of the regions around us have no banks, let alone a broker. [Thus] it’s important to be across many different intricacies of the industries in your region to be able to help all ranges of clients,” Ms Bunter said.

“Know your region, know your economy, ensure you understand all there is to know around policy not just in your direct region but all the regions surrounding you.”

Opening new branches 

Researching the local market has paid off for Jaime Savory, director at Gippsland Finance Solutions in Bairnsdale, Victoria, who recently seized an opportunity to expand the business 120 km south in Traralgon, despite an economic downturn. 

After getting calls from new clients in the LaTrobe Valley, she started doing research in terms of the competition in the region and made the leap to open a new arm in January 2023. 

“It just hit the ground running,” she said.

“It was a calculated risk, I didn’t just wake up and think this will be amazing to do.”

Given the Bairnsdale office has come “quite a long way in terms of processes” and the local team was solid, it felt like the right move at the right time, she said.  

Key to her success, she said, has been having the support of her team, as well as investing heavily into marketing and being responsive with clients.

“It’s not rocket science, we literally just communicate with our clients,” Ms Savory said.

“I’ve heavily invested in marketing, we’ve always done radio advertising, I have a lot of referrals via social media ... and then I do a survey six months later, so I can understand what is working and what is not working.

“Ironically radio was the top form of marketing — I was quite shocked by that.”

While the country grapples with a skilled labour shortage, particularly in regional communities, Ms Savory said training locally had helped grow her team. 

“If someone doesn’t have the experience that I need, or doesn’t hold the right letters after their name, if they’ve got the right personality, the right ethics, the right models — I can train the rest,” Ms Savory said. 

“Having the right people in your team is imperative.”

Despite the growing business, she remains firm on not outsourcing and keeping the skills local. 

“I won’t outsource anything. It’s just something that I hold dear,” Ms Savory said.

[Related: Regional roundabout]