PMA Year in Review – 2022

2022 turned out to be a very interesting year in the lending market. Following back-to-back interest rate increases by the RBA the residential market has seen a flattening, while businesses coming out of the Covid-struggles are looking for new opportunities to grow their businesses and new sources of funding.

Private Mortgages Australia also had an interesting year. We announced a partnership with lending platform iDutch and also launched a private lending course with CAFBA.

In 2022 all of our borrowers were referred to us with 90% coming from brokers. As such, we paid over $235,000 of referral fees out to our referring partners – within 24 hours of settlement and with no clawbacks!

Here are a few stats to show how things played out for PMA in 2022:

What’s in store for 2023?

A flattening market sees brokers diversify

While the possibility of further interest rate increase has residential buyers on the back foot, mortgage brokers will need to look outside their usual lending bread and butter to keep income flowing into their business. In 2023 we expect that more and more brokers will look to diversify to commercial lending in order to counteract the flattening of the residential market.

Serviceability becomes a problem

As interest rates rise so do the serviceability requirements of the banks. This means it will become more difficult for borrowers to access finance and will have them turning to alternative lenders for more flexible lending options. While a bank focusses on the ability of a borrower to monthly principal and interest payments, alternative lenders like Private Mortgages Australia will look at the bigger picture and take into consideration the borrowers exit strategy. This flexibility will prove to be a huge bonus for borrowers in 2023, particularly for businesses impacted by Covid which will have the ability to borrow restricted by bank servicing assessments based on FY 2021/22 financial results.

Cashflow is king

We expect that many businesses will need a short-term injection of funds to help with cashflow in 2023.

Inflation, hiring costs due to staff shortages and equipment purchases to keep up with increased demand are all reasons for business to contemplate taking out a short-term loan to keep the business going.

The ATO’s return to normal

collections processes will impact cash flow for many businesses and as such we are also expecting the demand for bridging loans to increase

At Private Mortgage Australia we are planning to hire a new Business Development Manager in the early part of the year in order to build even better relationships with our broker partners and grow the business further in 2023. Get in touch if you think you’re the right person for the job!

Wishing everyone the best for a fruitful year ahead!