Crown Property Finance

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Quarterly update at Crown

Well here we are - the end of the first quarter of the 2022/23 financial year, and how quick has that come! Let’s go around the grounds and look at the economy, lenders and policy, and what we’re doing here at CPF

In this quarter, we have seen 3 successive 50 basis point rate increases, with commentary from RBA Governor Philip Lowe, that as rates get higher, it’s common sense that the need for big adjustments get smaller. Higher commodity prices had helped Australia maintain an annual growth rate of about 3.5% so far in 2022, but higher interest, the end of the fuel excise cut today, and rising pressures would dent demand from households and businesses, with the lag effect to be expected to impact around 18-24months afterwards.

Currently, investors are predicting a cash rate of mid 3’s by the middle of next year, with most commercial bank economists predicting the rate will fall somewhere between 2.85% and 3.35% - with the hopes of inflation dropping from the expected 7%+ it will likely reach the end of this year, to a more manageable 4% next year, and hopefully around the 3% mark in 2024, which would hopefully lead the way to cut interest rates to again spur on a slowing economy at that point., with longer term rates being in the more manageable range for current borrowers and investors over the long term. The balance here is that as a country, we need to keep spending in the aftermath of COVID, but also need to manage inflation at the same time, a very real issue most countries are seeing due to the amount of money printing and lockdowns seen over the past 30 months

Some positive policy changes we’ve seen over the past three month include

  • More professions added to the Lenders Mortgage Insurance (LMI) waiver for medical and professionals

  • Higher use of rental income (up to 90% with some banks)

  • Changes to monthly living expenses

  • Changes to negative gearing, with some lenders using the negative gearing benefit at the same assessment rate that they are assessing lending, which is having huge positive impact for borrowing capacity in the wake of the negative movement against these lenders borrowing capacities due to rate increases

Over the past 3 months, we’ve seen the start of the low fixed rates rolling off, with banks seeing a lot of people shopping due to this. With the variable rates, and also fixed rates, being over 2% higher than what previously was paid, it can be a shock to the system for these home owners and investors. Due to this, we are seeing higher than ever discounts off the headline to attract quality business. Turn the clock back 10yrs, and it would be a stock standard 0.50% or 0.70% off the headline rate with most bank packages, now we are seeing upward of 3% discounts off the banks standard rates. This shows banks are well equipped to discount and attract business where needed and flexible for the right deals. Never before have borrowers been more powerful in their negotiations. We are also seeing massive cashbacks still, with some lenders doing $4000 or more to attract new business.

Over the past three months at Crown Property Finance, we’ve also seen some big changes, aswell as some amazing community engagement.

We were one of the main sponsors at Talk2mebro and their Newcastle black tie event at Marks Point Sports Club- which was a major success. The room was packed with over 150 supporters of the not for profit, with some amazing speakers on the night and inspiration from Directors Jack and Luke, showing the work they put in and how many people they’ve touched over the past 5 years, between workplace events, sporting groups, schools and corporate events.

We are proud to again partner with them as a major sponsor of their Wollongong event in November.

November will be a busy month - as we have also partnered with Dress for Success Sydney - a registered charity that improves the employability of disadvantaged women in NSW, by providing free of charge, professional clothing, a network of support, coaching and career development tools to help women achieve self-sufficiency. We will be running a clothing drive and information will be out soon - this is one I’m really looking forward to, and as a father of 3 girls, believe to be the change, you need to drive the change of what we can do to support everyone.

In September, we welcomed Karina Brown on board, as our Executive Assistant. This was an exciting one! Karina brings many years of financial services knowledge and service that is unrivalled. To help deliver the proactive, tailored financial support and hand-in-hand lending experience, hiring for growth was essential. With the proactive support of Karina, this is something we will be able to continue and better on a monthly basis for all our clients and future endeavors.

Right now, there has never been a more important time to reach out Crown Property Finance. In a market where banks and financiers are ever changing, on a monthly, basis, we do the research and leverage our relationships to make a bank or lender best suit you, as opposed to you having to suit one lender. Please reach out today to see how we can help you, and don’t hesitate to let and family or friends know how we may be able to assist you. We’ve had multiple people each week reach out off the back of a chat with friends or family, and the savings and outcomes we’ve had for them has been astonishing, some over $10,000 a year in savings with very little change or effort for them. We’d love to help many more like this and better the financial future of all Australians