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Sponsored by: As the dust settles from the COVID-19 pandemic, people are slowly starting to gain perspective and realise that some of the changes seen in the last two years have not been all bad. For the mortgage industry, the long-lasting beneﬁts include more ﬂexible working conditions, technological solutions to reduce reliance on physical documentation, and faster turnaround times. Another silver lining is the continued popularity of broking as a career and the ongoing rise in importance of the broker channel to the ﬁnance industry.
MPA’s Top Commercial Broker for 2022, Isabella Constantinou, associate director of sales at Simplicity Loans & Advisory, reﬂects this trend with only a few years of experience under her belt. She is possibly the youngest winner ever and only started out in the profession in April 2020 at the height of the pandemic.
“It is more important than ever for brokers to explore different options with lenders they trust, who can provide them with the education and knowledge necessary”
Michelle Bannister, La Trobe Financial
Similar stories abound in the commercial loan space, with entire teams being recruited remotely and working for months before meeting their supervisors in person. But instead of being held back, this new breed of brokers has been able to ride the wave of demand for credit better than those who may have learned their trade before 2020 in some cases. At the same time, familiar names who have been on the winners’ list in previous years show that experience also has an important part to play in the post-pandemic environment.
Having a solid customer base built on long-standing relationships clearly helps during times of crisis. Loyalty and trust will always be important. This is certainly true for brokers who have a particular specialty or unique approach to business.
The fact that both newer and established players could thrive during these watershed times suggests that the commercial broking space has depth and maturity as a sector.
The latest government statistics show that business loans for the purchase of property grew 137% since July 2020, driven by lending to small and medium-sized businesses. The fact that the volume of commercial loans has more than doubled is remarkable considering that some previously important sectors, such as tourism and hospitality, were decimated during this period.
“With record numbers of commercial loans being written, it is more important than ever for brokers to explore different options with lenders they trust, who can provide them with the education and knowledge necessary,” says Michelle Bannister, head of distribution for the real estate credit division at La Trobe Financial.
“I think it would be a much stronger industry if there was more female representation”
Isabella Constantinou, Simplicity Loans & Advisory
The commercial loans sector can be pleased with how well it performed during the pandemic years. It has considerable momentum as the economy heads into the business end of 2022. Perhaps one area that deserves close attention going forward is the gender composition of the winners. While the top broker is a woman, she is one of only two females on the list this year.
Indeed, the gender imbalance in broking has become more entrenched since 2020. Young people and women were particularly affected by the labour market impacts associated with COVID-19 restrictions, and the proportion of women brokers has decreased faster since the start of the pandemic than in the pre-pandemic years.
In terms of overall numbers, women brokers in Australia have roughly held steady, but the higher numbers of men entering the industry recently has caused the relative female presence to fade.
Given that fewer women entering the profession is a long-standing issue worsened by COVID, and that this year’s Top Broker shows there are few structural barriers to women’s achievement in this ﬁeld, it seems to MPA that there is no better time than now to address the gender imbalance while the industry in general is thriving.
“There’s a lot more males entering the industry than females … I think it would be a much stronger industry if there was more female representation,” says Constantinou.
Commercial broking itself is changing as the economy evolves away from the public health crisis, and the types of loans written in 2021 among the Top Commercial Brokers reﬂect this fact.
An average of 46.5% of loans written by the leading brokers were for commercial property, but there was a wide range of approaches in this area. Around half relied for more than 50% of their business on commercial, but only one broker relied on it alone.
The trend to rely more on commercial property has accelerated over the last few years, up from 34.9% of loans among MPA’s Top Commercial Brokers in 2020, which was also an increase from 2019. This shows that more brokers are diversifying into commercial loans, and more ﬁnancial institutions are taking notice by expanding their focus and offerings for brokers in this area.
Figures from the MFAA’s latest Industry Intelligence Service report show that the number of mortgage brokers also writing commercial loans continued to increase in the April–September 2021 period to a new high of 5,268, representing a 16% gain compared to the same period 12 months earlier.
Diversiﬁcation is often driven by strain in the home loan market, and as central bank interest rates are tipped to start rising soon, there could be even more incentive for brokers to expand into commercial loans.
“I think a good broker can add a lot of value in a rising interest rate environment,” says Perry Finance director Cameron Perry.
On the other hand, the share of development ﬁnance among the Top Brokers this year dropped to 28.4% from 41% in 2020 and 33% in 2019, suggesting that the surge in projects seen at the beginning of the pandemic has started to run its course perhaps due to less urgency for publicly funded projects.
The proportion of loans to SMEs written by the Top Commercial Brokers remained subdued at similar levels to last year’s, trending at an average of around 4.2% of these brokers’ overall business.
The latest Business Sentiment Tracker from ACA Research shows that 53% of SMEs reported proﬁtability in November 2021, up from just 35% in August and an indicator that credit ﬁnance is becoming less necessary. But the same survey shows that demand for additional ﬁnance at SMEs was starting to rise again in December as cash ﬂow concerns returned along with the uptick in the number of COVID cases.
Signiﬁcantly, however, expectations around capital expenditure among SMEs intending to purchase commercial real estate jumped by six percentage points on month to 13% in the December survey in what may be an indicator of even stronger sentiment towards commercial in the wider market.
Other trends in the commercial sector are also worth noting. The Top Commercial Broker for 2022 wrote loans in 2021 amounting to less than half the ﬁgure written by the Top Broker the year before. But there was a much bigger spread of closely ranked values in the middle of the ﬁeld among the 2022 winners, showing that business was being spread around a larger group, perhaps as competition increases or as the market matures.
A maturing market that is diverse in terms of clients, brokers and business approaches, and one that offers opportunity to all, will place the sector on solid footing in the future. This will enable the market to better deal with the impact of any curveballs thrown its way.
La Trobe Financial officially congratulates Mortgage Professional Australia’s Top Commercial Brokers for 2022, particularly Isabella Constantinou of Simplicity Loans & Advisory for being the ﬁrst woman to receive the top prize since 2014.
This prestigious list recognises the highest-performing brokers and highlights their contributions to
the industry and within their own communities. As the industry’s top performers, these brokers set a benchmark of excellence that deserves to be celebrated, especially in the context of a pandemic and a volatile market. These professionals have upheld a positive culture and a set of practices that others can aspire towards.
At La Trobe Financial, our purpose since 1952 has been to provide ﬁnancial solutions to underserved markets. Now more than ever, we are honoured to support this important sector.
Congratulations once again to the Top Commercial Brokers for their signiﬁcant achievement. We wish them continued success in their cause towards making a difference.
Senior Executive, Head of Distribution,
La Trobe Financial
To find and recognise the Top Commercial Brokers for 2022, MPA invited brokers from across the country to submit their ﬁgures from the past year. The online form asked for details such as the total value of commercial loans settled, the number of commercial loans settled, and the proportion of loans in the following areas: commercial real estate, equipment and asset ﬁnance, SME lending, debtor ﬁnance, unsecured business lending, and development ﬁnance. Brokers also supplied information such as the number of support staff on their team, their number of years as a commercial broker, and their aggregator details. Aggregators were then required to verify the details submitted. The ﬁnal ranking of brokers was based on the total value of commercial loans they wrote during the 12-month period.
$2.4bn total loans settled by the Top 20 brokers
9 years average length of the Top 20’s career in commercial broking
46.5% of loans settled by the Top 20 are for commercial real estate