How brokers are responding to the biggest industry challenges

In its Market Megatrends 2024: Navigating the Future report, the lender outlined six long-term themes shaping Australia’s property markets:

• Housing supply constraints.
• A huge transfer of wealth as the population ages.
• Increasing property investors in the market.
• Small businesses needing finance to grow.
• Accelerated technology evolution.
• A growing focus on cyber security.

Helping buyers get on the property ladder

Reflecting on the first challenge, Birdie Wealth director Nathan Smith said brokers are vital in assisting customers in navigating the dynamic market and optimising their housing choices. They could offer more tailored strategies to help them make the most of their financial situation.

He said that his brokerage would be "focusing more on long-term financial planning, helping customers to build sustainable strategies that go beyond just securing a home loan”.

Smith suggested brokers focus on the solution, not the rate. Brokers could help clients embrace a more disciplined approach to budgeting while potentially reframing their expectations for what they can afford.

“It’s not always about finding the dream home right away,” he said. “Sometimes, it’s about helping buyers make compromises – whether it’s considering smaller properties, further locations, or even different loan structures.”

Riding the wealth transfer wave

An estimated $5.4 trillion wealth transfer between generations is expected over the next two decades, according to statistics from financial consultant JBWere.

David McCleery of MCP Financial Services said brokers are increasingly supporting customers to navigate the complexities of passing wealth from one generation to the next and highlighted the importance of collaboration with accountants and financial planners.

“We often bring in outside support, like accountants, to ensure we’re considering all tax implications and providing the right guidance for succession planning and property acquisitions,” McCleery said.

McCleery added that brokers who can provide customers with guidance in these complex areas have an opportunity to build long-term relationships with families that span generations.

“Consumers and business owners now expect us to solve more complex problems, and that’s a positive sign of maturity in the industry,” he said.

Property investors eye different markets

Brokers should expect an increase in the number of potential buyers looking at investment properties rather than owner-occupied properties as a cheaper way to enter the market, according to NAB.

Two Birds One Loan director and finance broker Elouise Dooley said: "If clients can get into the market now, we are absolutely urging them to do so. When interest rates do drop, it’s going to open the market to a lot more buyers and become increasingly competitive."

She added that a tighter property market would mean brokers need to get creative when supporting investors to build property portfolios and the loan structures that support them.

“We’re seeing an increasing number of investors seeking commercial properties – for some, these can be more cashflow positive and the tenants more stable, and can cost less to maintain, depending on the security.

“Given the current interest rates, many people have capped out their personal borrowing capacities and are looking for alternative strategies to invest, whether that’s residentially or commercially but could be via SMSF, company or trust," Dooley said.

Supporting small businesses to grow

Almost six in 10 SMEs plan to invest and expand in the next 12 months, according to NAB. Brokers can advise on strategic financial decisions and funding needs, playing a key part in SME expansion.

Brisbane-based Karlie Scharfenberg, a director and senior finance broker at The Loans Suite, supports business owners in navigating growth opportunities by building cash flow projections and business plans before securing clients’ financing needs.

“For me, it’s about educating clients and helping them make the best financial decisions,” Scharfenberg said.

By taking the time to understand her clients’ complete personal and business financing needs beyond the basics, Scharfenberg said she has built long-term relationships and client referrals.

AI can boost broker efficiency

Open banking, Consumer Data Rights and artificial intelligence (AI) technologies may have had some teething issues, but they can also help brokers offer clients more personalised and data-driven services.

Entourage managing director and principal finance broker Damien Roylance said he thinks AI will play an increasingly important role in broking and has already found automation to speed up application processes, saving him about two hours of manual work per client.

“In the future, I think AI will help us not only analyse client data faster but also predict market trends, allowing us to proactively offer advice before clients even know they need it,” he said.

Cyber scams on the rise

Cyber scams are becoming a bigger problem and brokerages are especially vulnerable to certain attacks.

Five Dock Finance's finance manager, Paul Boykos, has said he has taken action and implemented a full security upgrade after seeing a sharp increase in the frequency and sophistication of phishing emails.

“We’re custodians of all of our customers’ most valuable personal information – bank details, account numbers, IDs,” he said.

[Related: Housing supply shortage a ‘megatrend’ for brokers: NAB]