Here with another guest speaker and mortgage broker Craig Forman from Cane Financial. Did I get it right. Yeah, you get it right. Okay cool. All right. Craig, thanks for joining me. Please give me a bit of here in your office here in Bondi Junction. Give me a bit of a background yourself. Your experience as a mortgage broker working with investors and if you're happy to share and in any personal experience with investing as well.
Right. Thanks. Great to be here. Thank you for the opportunity to chat to you. Look I've been in banking I guess for 20 years. Which is why the grey hair. It's really been Australia now 17 years. I done my time in South Africa as well as London and now obviously in Australia a banker by trade initially for a couple of years, now a broker for nearly 16 years and have great experience in this game then established Cane financial now eight years ago here in Bondi.
We've now got six staff. And a couple of loan writers processes and obviously a marketing team as well.
Okay. Is it mainly sort of investors or owner occupiers that you deal with?
Probably upgraders and investors. OK. So the first home buyer market has not being overly aggressive of late although we are seeing a lot of them coming back especially with these prices in the eastern suburbs. So you know a lot of our clientel are in the eastern suburbs and the North Shore and inner West. But a lot of the investment stuff is actually happening interstate ok any particular state. A lot have been in Queensland and starting to see a bit happen in places like Geelong and Adelaide which right.
A few people have started to mention Adelaide not totally convinced myself yet but it you know to me it's all about population and infrastructure spending.
You know I'm hearing there's not a lot of money going into Adelaide yet but the people you know I'm hearing there is not necessarily enough people yet but maybe they're driving more people down to Adelaide.
And what's been happening with the investment market from a lending point of view and what's happening right now more important lending is going to get tougher as we know.
We've had post Royal Commission but also just bankers and banks getting a little bit scared I guess and you know restricting their lending and policies on lending.
You've got a lot higher assessment of loans looking at benchmark rates going up existing commitments and expenses being verified at levels I've never been before. We're at that stage now with banks asking for credit card statements for three months transactional statements for three months that's been happening for a little while now hasn't it has it improved at all since the end of the royal commission.
And in terms of more be required or it hasn't improved or has why.
As the situation improved the borrowers in terms of all those extra requirements well look I think the bottom line is you'll get a deal through but it takes longer to get a deal through. Yeah. So I think the answer is if you are I wouldn't say squeaky clean. But you actually have kept your affairs in order. You'll get the loan through but it's just taken two or three times longer to get the loan through. And of course borrowers are not able to probably borrow as much as they did in the old days because banks have a more prudent time on guess benchmark rates and levels of debt.
OK and what's your typical client you started to touch on it there and if you are happy to share and then your own personal experience as an investor sure that is easy to start with I have two investment properties and fortunate to have one in Bondi itself
And one in Surry Hills. Both I bought actually 2016. Yeah. One was of plan which I said I'd never do myself. But I did. To Surry Hills one but it's actually gone really really well. I can't or you know leased out they've had tenants from day one that both have actually grown in value. Yeah. So I'm pretty pleased with those. And our general clientele is probably the established business person self-employed possibly. Good job. Got a home loan looking to probably raise some equity into the home to grow their wealth and that's where the investment side comes in. Property being such a pretty important asset class yeah. We make sure that we're able to leverage off the equity in the home for the deposit and costs for the investment property. So we would have plenty, plenty of clients who now have more than one investment property and see property as a very important part of the wealth and investment structure and has the has the market picked up in terms of activity.
I mean in the last few months. Absolutely, we were actually as busy as I've been for probably the last three or four years. So we see a lot of people. I think prices have come back to a point where investors are certainly happy to get back in now because they don't have the threat of foreign buyers. This is in the market. And we've also seen for some others now coming slightly back into the market because again the competition is less and also the price points a little bit more achievable.
All right. And where do you see the market going for the rest of this year in terms of lending as well as the property market.
What's incredible is we see rates coming down every day. So. We got some more reductions in rates yesterday from the banks. It's mainly fixed rates. Yes they did. So which is indicate indicative of where rates are probably going to go in the near future. Right. And with that we've seen some stimulation I guess in the property market as well.
So while most commentators are talking property coming off a little bit more towards the end of this year I believe that there's going be a time where it's going turn again and going to be not far off.
All right. Any advice for people trying to get into the property market especially as an investor. You know what what's what. What have you seen. Know which with your whole experience as well as what's happening now. What what can what should they.
You know the bottom line is this when I say keep yourself clean I mean that you now make sure that your current commitments up to date especially your current home loan and because usually the investor has probably got a home loan as well. Yeah but if he doesn't make sure all other commitments your credit cards up to date your personal loans you make your repayments. Banks want to see that. You can make your payments and your mortgage payments. Yeah. And yeah I guess have a decent deposit you know loans now for investment you generally need at least a 10 per cent deposit to make some loan. Banks will do is up to 90 percent including mortgage insurance. So either equity in your current property to leverage and use or cash can I with it.
