With new home build approvals sinking to an eight-year low and automotive sales performing strongly, mortgage brokers are turning to asset finance to diversify revenue streams.
Economists are predicting worse is still yet to come, sparking further fuel for mortgage brokers to act quickly.
According to the latest ABS building approvals data, total dwelling approvals fell 4.9 per cent in June, following a decline of 15.8 per cent in May.
The June figures do not include the effects of the federal government’s $25,000 HomeBuilder incentive program, which may push into the coming months.
“The housing market has performed better than what economists originally predicted at the beginning of the pandemic, however a decline, in general, was inevitable,” said Nodifi Head of Partnerships Peter Holman.
“Our Nodifi partners are still reporting steady home loan enquiries from Adelaide and Canberra, which is reflected in the recent CoreLogic home value index results - Adelaide and Canberra were the only capital cities to record growth for the month of July and for the quarter.”
Mr Holman says the following months will bring mixed results for housing approvals and values, with certain capital cities set to experience positive effects from the HomeBuilder initiative, while the second COVID wave is likely to bring further pain.
“It wouldn’t surprise to see Adelaide and Canberra continue to see further growth especially once the effects of HomeBuilder start to come in - similar can also be expected for capital cities who limited the virus impact early on.”
“In contrast, the second COVID wave in Sydney and in particular Melbourne should bring a further decline to housing approvals and dwelling values in the months to come.”
The New South Wales and Victorian governments have recently brought in initiatives to limit the impact of COVID-19, with stamp duty concessions for FHBs on new home builds under the value of $800,000 and $600,000 respectively.
Victoria has also amended the HomeBuilder scheme as a result of stage four restrictions, with the construction commencement timeline extended from three to six months.
The instability of the housing market has seen mortgage brokers turn to alternative revenue streams, with asset finance being preferred.
Nodifi Head of Customer Experience Tim Wells, says Nodifi is seeing strong demand for its asset finance solution, as brokers look to secure their income.
“For quite some time Nodifi has been positioned as a diversification solution for mortgage brokers, given its low barrier to entry, enhanced business proposition and resilient [asset finance] sector.”
“The pandemic has highlighted just how resilient this sector is, and it’s no surprise that mortgage brokers are now seeing the benefits.”
Automotive sales figures saw a consecutive month on month growth in May and June, with volumes rivaling those seen pre-COVID.
A number of car dealerships have reported a shortage in stock, with strong automotive sales attributed to the shortage.