Adapt to survive, says mortgage chief
As interest rates soar and the property market is hit by turbulence, an Auckland adviser says mortgage brokers need to adapt to survive.
Hastie Mortgages chief Campbell Hastie (pictured above) said the New Zealand property market was frantic 12 months ago, however, it has cooled in recent months.
“Throughout lockdown periods during the last two years, we have seen so many changes and trends in property markets across New Zealand,” Hastie said. “We were still seeing the opportunity for many deals to be done, even when the foot came off the gas, the turbo was still pushing things along.”
Hastie said the introduction of the CCCFA regulations and multiple interest rate rises were negatively affecting New Zealand’s property market.
“As a result, mortgage advisers are now seeing less property transactions but more clients choosing to refix their loan or extend their interest-only period,” he said. “There is a whole lot of work involved in both of these transactions and thanks to the regulations that were recently implemented, we receive no commission for that.”
Hastie said many brokerage owners and directors were facing a margin squeeze.
“I have been speaking with quite a few bank BDMs recently and they are saying to me the mortgage pie is shrinking and has done so during 2022,” he said. “As a business owner you need to ask yourself – what does this mean for your margin as a business owner. Don’t worry about the fact you are a mortgage adviser, you just have fewer transactions, potentially fewer customers and there is more work to do for each customer.”
Hastie said mortgage advisers should be closely looking at their business model and ensure they were compliance driven.
“For us now, it is all about the licence,” he said. “It is about lifting the capability of your business and each individual. You need to ensure you have the right policies and processes in place, so in an environment where there are fewer transactions and more work to be done, efficiency is key.”
Hastie said he and his team had spent a lot of time reviewing their in-office policies and procedures.
“I have a fantastic team who have been tweaking and amending our current policies and improving them to be bigger and better than before,” he said. “Once all your policies have been updated, communicating with new and existing customers will be easier and more efficient than ever before. Your existing clients are where the gold is, so communicate with them as often as you can.”