Meet Jassika Sothinathan – Operations Manager at Australian Securities

At Australian Securities, our team is the heart of our success. Today, we’re delighted to introduce you to Jassika, our Operations Manager, who has been an integral part of our team for the last two years.

"It has been an absolute pleasure having Jassika on our team for the past two years. She is the glue that holds us together. Jassika's problem-solving skills and adaptability in a dynamic financial environment are highly valued by everyone at ASL."

Natalie Bode, CEO

Q&A with Jassika Sothinathan

It was clear that Jassika loves her role and the supportive team at Australian Securities when we caught up to learn more about her. Here’s what she had to say.

Q. Tell us about your role at Australian Securities.

Jassika’s role at Australian Securities is multifaceted and ever-evolving. From system improvements to problem-solving, she navigates the daily challenges with a smile. “What I love most about my job is the dynamic nature of the role,” Jassika shares. “Each day brings new challenges and opportunities for problem-solving, which keeps me on my toes and is, in turn, rewarding. It never gets boring.”

Q. Name one of the most important lessons you’ve learnt throughout your career.

“One of the most valuable lessons I’ve learned throughout my career is the importance of adaptability,” she reflects. “Embracing this mindset allows me to stay flexible and take on any challenges that come my way.” She believes her ability to adapt has allowed her to thrive in the fast-paced world of finance.

Q. Which Australian Securities value do you resonate with the most and why?

When asked about the Australian Securities value that resonates with her the most, Jassika doesn’t hesitate. “The value I resonate the most with is Trustworthiness. Trust is the foundation of any relationship, whether with clients, colleagues or personal relationships. It ensures that we create strong, lasting, loyal relationships and uphold the highest standards in everything we do.”

At Australian Securities, trust is at the core of what we do. We understand that our clients and the financial advisors we work with entrust us with their financial futures. As Jassika emphasises, by consistently delivering on our promises and communicating transparently, we strengthen these vital bonds.

Q. How do you like to spend your time when you aren’t working?

Jassika has an entrepreneurial spirit inspired by her parents, who started their own business when she was just 5. “If I weren’t in Finance, I would probably run my own business,” she shares. “Seeing my parents run their own business and create a name for themselves in the community is inspiring.”

Q. What would you do (for a career) if you weren’t doing this?

Outside of work, Jassika’s passion lies in Indian dancing. “When I’m not working, you’ll find me dancing or choreographing,” she explains. “I’ve learnt classical Indian dancing from the age of 5, and I now run a side gig with my friend where we perform at various events and teach wedding dances, which is a big part of South Asian culture.” This creative outlet provides a beautiful balance to her analytical work at Australian Securities.

Q. Do you have a favourite person, book, blog or podcast that has influenced your life and career?

Jassika says her mother has had the biggest influence on her life and career. “My mum instilled my core values in me and is also the reason I got into dancing. She taught me the importance of integrity, responsibility, and always giving 100% in everything you do.”

If there were one piece of advice you would have to share with existing and prospective clients, what would it be?

For our clients, both existing and prospective, Jassika has one key piece of advice: “One piece of advice I would share with existing and prospective clients is to always be transparent and communicate openly. Help us help you.” At Australian Securities, we’re here to serve our clients’ needs in the most effective way possible, and open communication is essential to that process.

We’re proud to have Jassika as part of our Australian Securities family. Her commitment to trust, adaptability, and excellence embodies the values we hold dear. As we continue to serve our clients with their lending and investment needs, we know that with team members like Jassika, we’re in the best hands possible.

Want to find out more about our loan division?

Call us on 1300 275 275 to talk to one of our team. We prioritise direct communication and personalised support for our clients.

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The state of investment in Victoria

Opinion: The State of Investment and Finance in Victoria – An Urgent Call for Policy Reform

Australia’s investment landscape, particularly in Victoria, is currently grappling with a multitude of challenges that demand immediate and thoughtful policy intervention. With housing shortages, escalating building costs, and stifling government policies, the path to securing viable investment opportunities has never been more perilous.

Housing Shortages and Rising Costs

Victoria’s housing market is under intense pressure, exacerbated by surging construction costs and restrictive government policies. Stamp duty, a significant one-time tax imposed on property transactions, is particularly burdensome. With the Victorian Government levying some of the highest stamp duty rates in the country, potential homeowners and investors alike are finding it increasingly difficult to justify investments in this market.

A more pragmatic solution could involve stamp duty concessions, particularly for first-time buyers and developers. As the Victorian Council of Social Service (VCOSS) and other reputable sources have noted, these targeted concessions could not only alleviate some of these pressures but also stimulate more investments in the state’s property market, offering a glimmer of hope in these challenging times.

Construction and Labour Costs

Building materials and labour costs have skyrocketed, partly driven by the Victorian Government’s substantial infrastructure projects. While these projects are necessary for the state’s development, they have inadvertently strained the available trade supply, pushing prices higher and making private development less financially viable. The limited availability of land further compounds these issues as developers struggle to find affordable plots to break ground.

Environmental Taxes and Their Impact

Environmental taxes, while necessary for sustainability, present an additional financial burden for investors. This creates a delicate balancing act where government policies must also consider the economic implications of these taxes. Realistic, phased approaches to environmental levies could ensure that investments remain attractive while still promoting ecological responsibility.

The Federal Government’s Housing Supply Commitment

The Federal Government’s commitments to boosting housing supply are commendable, yet they fall short of addressing the ground realities in Victoria. Young Australians increasingly rely on their families to secure substantial loans, with average loan amounts of $600,000 and upwards towards $970,000 in some areas. This trend only underscores the urgent need for comprehensive policy reforms to make housing accessible.

The Impact of the COVID Levy

Another significant hurdle is the COVID levy, which compounds the financial stress on both residential and commercial property owners. These additional taxes are driving potential investors away from Victoria, looking towards more economically favourable regions such as Perth and South Australia.

Land Tax Increases and Foreign Investor Levies

Steep land tax increases are another critical issue. These taxes inadvertently stifle commercial and industrial investments. Property owners face the threat of vacancy as commercial renters find themselves unable to cope with rising rent demands. The imposition of foreign investor levies further dissuades global capital, which is crucial for the state’s long-term economic health.

The Need for Systemic Change

The multifaceted issues besetting Victoria’s investment landscape cannot be resolved through short-term fixes. The government needs to adopt a holistic, long-term approach that involves revisiting and potentially revamping current tax policies. Addressing the concerns of both local and foreign investors requires nuanced policy decisions backed by thorough research and stakeholder engagement.

A Call for Accountability and Transparency

There is a pressing need for government accountability in financial decision-making. Reactionary policies driven by political agendas offer no sustainable solution. Australians, including sophisticated investors, seek clarity and certainty about the future. This involves a transparent discourse about fiscal policies and a coordinated approach between the Reserve Bank of Australia’s (RBA) efforts to manage inflation and the Federal Government’s fiscal initiatives.

Committed to Finding Solutions

Victoria stands at a critical juncture. Encouraging investment and fostering economic growth requires a concerted effort to reform current policies that stifle financial opportunities. Despite these challenges, Australian Securities remains committed to offering innovative solutions—such as reduced presale requirements and alternative investment opportunities—to help stimulate the property market.

Ultimately, systemic change is imperative. We must shift from short-term, reactionary policies to forward-thinking strategies that will ensure long-term stability and growth. Together, we can pave the way for Victoria’s more prosperous and sustainable future.

Choosing a Private Credit Lender Wisely

Are you choosing your private credit lender wisely? Discover what to ask to ensure you aren’t taken to the cleaners by your private credit provider.

Private Credit: A Guide to Choosing Your Lender Wisely

In recent years, the private credit industry has emerged as a beacon for those seeking alternatives to traditional bank loans. With its promise of greater flexibility and speed, private lending has attracted many borrowers, from individuals to institutional investors. However, this burgeoning market has not been without its challenges. As the International Monetary Fund (IMF) highlighted in its Global Financial Stability Report of April 2024, the private credit market is in need of “more vigilant regulation and supervision” to safeguard its integrity and protect lenders from potential vulnerabilities.

Important Considerations When Choosing a Private Credit Provider

As the private credit sector evolves, lenders and borrowers must tread carefully and exercise due diligence to ensure they engage with reputable, ethical, and transparent credit providers. Here are the essential considerations and questions we recommend to guide you through the process of choosing a private credit provider that aligns with your financial goals and needs safely.

Licensing and Registration: Your First Line of Defence.

Before entering into any agreement, verify the provider’s credentials. Ensure they hold an Australian Credit License (ACL) or an Australian Financial Services (AFS) Licence. Licensing is a fundamental requirement that signifies the lender’s adherence to the legal and regulatory frameworks designed to protect consumers.

The Importance of AFCA Registration

Registration with the Australian Financial Complaints Authority (AFCA) provides an additional safety net, offering a pathway for dispute resolution, should there be a need. Engaging with a lender registered with AFCA ensures you have recourse when the service or conduct falls short of expectations.

Transparent Financing Sources and Solid Track Records

Understanding where your lender sources its funds can provide insights into its stability and ethical standing. Furthermore, a lender with a documented history of fulfilling its loan commitments indicates reliability and trustworthiness.

Expertise and Due Diligence

Reviewing a lender’s length of operation and market experience can tell you whether they have historically been a good provider or not. While seemingly cumbersome, a rigorous due diligence process is a positive indicator. It shows that the lender is committed to responsibly assessing loan suitability and minimising risks for all parties involved.

Financial Hardship Practices

Life is unpredictable, and financial hardship can affect anyone. Ask about the lender’s policies regarding financial hardship and how they address loan defaults. An ethical lender will seek to work with clients rather than resort to punitive measures immediately.

Avoiding the Traps

Beware of lenders recommending dubious practices, such as setting up a company name for personal loans. Such proposals not only contravene regulations but strip away the protections they afford you.

The Role of Financial Advisors and Brokers

If you need more clarification about navigating the private credit landscape, consider engaging the services of a financial advisor or broker. These professionals can be invaluable in steering you toward reputable lenders and ensuring that your financial needs are met responsibly and ethically.

Why Choose Australian Securities

In a marketplace that demands vigilance, Australian Securities presents a bastion of integrity and reliability. Our heritage, spanning nearly a century since our inception in 1925, is a testament to our commitment to ethical lending and intelligent investing. Licensed and future-facing, we embody the principles of effective oversight and proactive management.

Navigating Regulatory Evolution and Its Impact

As the regulatory environment surrounding private credit tightens in response to calls for increased oversight, Australian Securities is committed to proactive adaptation and unwavering ethical adherence. This positions us to be ready to navigate and thrive within the evolving regulatory requirements. For our borrowers, this means they are partnering with a lender that is committed to compliance and also dedicated to fair, transparent lending practices that safeguard client’s interests.

It’s better not to chance it

In the sea of private credit options, equipping yourself with knowledge and asking the right questions is critical to identifying providers that value transparency, integrity, and ethical practices. In choosing a lender like Australian Securities, you align yourself with a partner dedicated not just to financial gains but to fostering trust and long-term success in Australia’s vibrant financial landscape.

Whether you are looking for a tailored mortgage loan, a complex loan, or to refinance your clients, Australian Securities has you covered. Our Finance team will work closely with you to create a loan that meets your needs.

Still not sure…

Call us at 1300 275 275 to talk to one of our finance managers or lending executives. We prioritise direct communication and personalised support for our clients.

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Michael Clarebrough – Australian Securities Team Member Profile

When you sit down with Michael Clarebrough, you’re immediately struck by his breadth of experience and his pivotal role in shaping Australian Securities into what it is today. With a career spanning over five decades at the firm, Michael’s journey mirrors the evolution of the financial industry itself—from the days of manual mortgage documentation and ‘plug and talk’ phone systems to leading technological and procedural advancements in the sector. His knack for devising pragmatic solutions to complex challenges has propelled Australian Securities forward and contributed significantly to wider industry practices.

Michael’s story is of constant learning, innovation, and an unwavering commitment to fostering a supportive, people-centric culture within Australian Securities. His contributions have been instrumental in developing solutions that help clients overcome their financial hurdles. Beyond his professional legacy, Michael’s approachable manner and profound insights offer a glimpse into the ethos that underpins Australian Securities—a dedication to excellence, innovation, and mutual respect among all stakeholders.

Q&A with Michael

Q&A with Michael was fascinating. He has seen so much change and has been instrumental in some of that change. Here’s what he had to say.

Q. What is your role, and how long have you been at Australian Securities?

I am currently the General Counsel and an Executive Director, a journey that started on 5 February 1973. The finance and investment landscape has evolved dramatically over the last 51 years, and I’ve had the privilege of evolving alongside it, from my early days to becoming CEO in 1986 to pioneering our managed investment schemes.

Q. What do you like most about your role?

One of the most satisfying parts of my work is distilling complex financial situations into actionable, understandable solutions. There’s a unique satisfaction in devising innovative financial products that elevate our standing in the financial community and genuinely deliver results for our members.

It is not uncommon to witness the full cycle of a finance client becoming an investor or a peer choosing to invest with us, and this is profoundly rewarding.

Q. Name one of the most important lessons you’ve learnt throughout your career.

There is an interdependence between investors and borrowers; they need each other. Without the other, they don’t have a mortgage security for income or finance for their business or residence.

Q. Which Australian Securities value do you resonate with the most and why?

The value of professional respect for all stakeholders is a guiding principle that informs how we engage with everyone inside and outside our business. We need to balance the needs of our clients. Without investors, we cannot finance a loan, yet without a fair interest rate, you cannot expect clients to invest.

Q. How do you like to spend your time when you aren’t working?

I like to spend my time away from work in several ways. These include gardening, walking, spending time with friends, and building model ships and dollhouses.

Q.What would you do (for a career) if you weren’t doing this?

That’s a tough question. If I had to pick a new career, it would follow my interests, so perhaps a social worker, a garden landscaper or a builder of model ships and dollhouses.

Q. Do you have a favourite person, book, blog or podcast that has influenced your life and career?

Simon Sinek’s insights on leadership and the principles of TQM have greatly influenced my professional philosophy, particularly the emphasis on quality and productivity. He also taught me to avoid proud, unconsciously incompetent people.

On a personal level, my grandfather, a multifaceted person, a Brigadier in the Australian army and post war dental surgeon who sat on his grandfather’s shoulders outside 80 Collins Street to watch the first motor car drive along Collins Street Melbourne, following a man in a white coat ringing a bell to warn bystanders to be careful. He taught me the value of authenticity and the impact one can make by “just being yourself”.

If there were one piece of advice you would have to share with existing and prospective clients, what would it be?

The KISS principle—Keep It Simple, Stupid—has always been a mantra I live by. The financial world is complex enough; understanding should not be. I urge clients to seek clarity and simplicity in all their dealings. If something doesn’t make sense, ask again. If it still doesn’t make sense, it’s time to GOQ—Get Out Quick! I’ve shared this advice with every client and member.

Leaving a legacy

Michael’s deep-rooted experience and wisdom showcase the legacy he has built at Australian Securities and the forward-thinking ethos that propels the firm toward success.

Want to find out more about us?

Call us on 1300 275 275 to talk to one of our Lending or Finance Managers. We prioritise direct communication and personalised support for our clients.

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Navigating Investments as Interest Rates Decline: The Case for Fixed Interest Investing

In a financial environment where declining interest rates are predicted, finding a safe haven for one’s investments is paramount. When diversifying your investment portfolio, we encourage you to consider an often underappreciated asset class which offers both stability and a compelling opportunity: fixed interest investments.

Why Consider Fixed Interest Investing?

Understanding the Essentials

Fixed interest investments, or fixed income securities, are debt investments that offer fixed interest payments at regular intervals, with the principal amount returned upon maturity. They can include assets such as government and corporate bonds, debentures, capital notes, fixed income securities, and term deposits.

At Australian Securities, fixed interest investments are debt instruments (private credit) manifested in the form of securitised debt or mortgage-backed securities. These investment opportunities can extend an array of diversification opportunities and the potential for elevated yields when juxtaposed against traditional fixed-income assets, offering refuge in the unpredictable climate of today’s economy.

The Benefits of Fixed Interest Investments

Why are Australian Securities’ fixed interest investments worth considering (especially in times of fluctuating markets)? They aren’t traded on the exchange markets and therefore, do not carry the risk and volatility that stocks do. Their primary allure lies in their ability to provide a predictable and steady income stream, essentially acting as a cushion against the ever changing nature of stock markets. Furthermore, they add a diversifying element to your investment portfolio, spreading risks across different asset classes.

Steady as she goes

Many investment types are negatively impacted when interest rates fall. The value of fixed interest investments through Australian Securities is their low-risk profile. We maintain a lower Loan to Value Ratio (LVR) than most banks or private lenders, with an average LVR across all mortgages of 43%*.

*Averaged across all mortgages as of 30 June 2023.

The impending decline in interest rates may reduce the value of higher-risk investments. However, Fixed Interest Investments locked in now will have far more attractive returns when interest rates fall, reducing the income or interest earned from many other types of investments.

Deciphering Risk vs. Reward

Not all investment opportunities are created equal. The security offered by fixed interest investments contrasts starkly with the higher risk of alternative lending options. One must remember higher returns are often associated with higher risk.

“People underestimate these risks; another risk is a loan loss, but with most of these portfolios, we think it’s relatively low risk. In a cycle, the losses tend to appear at the other end of a recession. So, if you can get 6 to 8 percent from vanilla stuff today, there’s no need to go higher up the risk curve from my point of view,” says Daryl Wilson, the chief executive officer of Affluence Funds Management. This sage advice underlines the importance of thorough research and due diligence. It’s crucial to partner with firms that prioritise not just the pursuit of returns but also the safety and security of your investment.

Why Choose Australian Securities?

With a legacy stretching back to 1925, Australian Securities stands out in the realm of ethical lending and smart investing. Our dedication to transparency, along with our approach of not pooling investments, offers our investors a sense of certainty and security not readily found elsewhere. Our investments are mortgaged, introducing an additional layer of safety, and our historical track record speaks volumes of our ability to navigate through varied economic climates.

Secure your future now

With the anticipation that interest rates will continue their downward trajectory in the coming years, now is the opportune moment to consider locking in fixed-interest terms. Australian Securities is not just a firm; it’s a partner in ensuring your investments align with both your financial goals and a sustainable future.

Protect your investment today

Are you ready to explore how fixed interest investments can fortify your portfolio amidst the expected economic shifts? Reach out to Australian Securities, where your pursuit of prosperity meets our commitment to ethical and secure investing. Call us on 1300 275 275 to talk to one of our Finance Managers or Lending Executives. We prioritise direct communication and personalised support for our clients.

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2023 in review. The financial journey unpacked.

The economic year in review shows us that volatility in the investment market might remain for some time yet. Despite 13 rate rises since May 2022, the expected housing market crash did not eventuate and neither has the “fixed-rate cliff”. Consumer spending is not entirely to blame for the stubborn inflation rate and government spending is being partially blamed. Geopolitical issues are increasingly causing global economic concerns that are impacting financial market confidence. In short, during a volatile time and economic uncertainty, knowing where your money is and that it’s safe is crucial.

Inflation

Despite 13 interest rate hikes since May 2022, Australia grapples with persistently high inflation, reaching 5.60% as of September 2023. This surge is primarily attributed to escalating fuel costs and domestic expenses related to housing, electricity, food, and wages. Economists are particularly concerned about the resilience of services inflation, with notable increases in sectors such as veterinary and pet services, restaurant meals, hairdressers, financial services, and insurance.

Ongoing federal, state and local consumption and infrastructure spending are still sitting above pre-pandemic levels, taking much-needed labour from the private sector and putting pressure on inflation. Expenditure was pushed up by ongoing support for those affected by natural disasters and programs like the National Disability Insurance Scheme. Despite a strong pipeline of infrastructure projects, labour and materials shortages pose challenges to the pace of completion.

In the last quarter, “total public investment increased 8.2% in the June quarter. While growth was boosted by second-hand asset transfers from the private sector, new investment was also strong at 5.5%. This reflected ongoing work on large-scale transport, health and education projects across several states.”

Several other factors are working against inflation, including a 5.75% pay increase for 2.4 million workers granted by the Fair Work Commission, the entry of 500,000 migrants impacting housing and employment markets, and sustained high levels of federal, state, and local consumption and infrastructure spending. Russia’s invasion of Ukraine, which has affected the production of many goods and supply chains due to constrained oil and gas supplies, has negatively impacted inflation.

Cash Rate Movements

In 2023, the Reserve Bank of Australia (RBA) persistently raised the cash rate to rein in inflation—the most recent uptick in November, totalling 0.25%, further strains mortgage holders and household expenditure.

Looking ahead to 2024, the RBA plans to streamline its operations by reducing the frequency of meetings from 11 to 8, aligning with international practices such as the United States’ Federal Reserve Open Market Committee (FOMC). This adjustment reflects a more efficient approach and allows the board additional time for a thorough examination of economic indicators and the ramifications of cash rate decisions. Understanding the strategic shifts within the RBA is crucial for sophisticated investors in navigating the evolving financial landscape.

Migration

Australia’s population surged by 2.2% to reach 26.5 million people in the year ending March 2023, with net overseas migration accounting for 81% of this growth, adding 454,400 individuals. This increase is primarily attributed to a significant rise in arrivals, up 103% to 681,000, and a modest increase in overseas migrant departures, up 8.8% to 226,600. The low departure rates are considered a catch-up effect following closed international borders during the pandemic, with a temporary expectation for increased departures as international students return to their home countries.

Estimates from the federal budget indicate that Australia’s migrant intake in the year to June was approximately 400,000, more than double the pre-COVID-19 average.”. The return of international students has contributed to this surge, prompting concerns from AMP chief economist Shane Oliver. He suggests that to prevent overwhelming government efforts to boost housing supply and affordability, Australia should reduce its annual immigration intake to 200,000—less than half of the current 500,000. The heightened concentration of net overseas migration is exerting demand-side pressures on housing costs in the short term, particularly in certain rental markets, contributing to an acute housing shortage and diminished affordability.

Geopolitical Issues

Global geopolitical shifts are reshaping the world, impacting Australia significantly. The Russia-Ukraine conflict heightens capital flows, trade, and commodities risks, causing supply chain disruptions and inflationary pressures. Tensions between China and Australia, marked by tariffs and political disruptions, emphasise the need for resilience and reduced reliance on the Chinese market. The Israel-Hamas conflict raises concerns about oil prices, affecting global economic perceptions and potentially contributing to financial volatility and inflation fears. Investors are bracing for increased uncertainty across various markets.

Commercial Property Prices

Commercial property sales are slowly rising, but challenges persist in bridging the gap between landlords and buyers, influenced by factors like interest rate hikes, remote work trends, and global uncertainties. JLL’s Q3 2023 preliminary figures show a notable 106% increase in office volumes from Q2, reaching $1.2 billion in the September quarter, with significant deals, including divesting industrial assets to UniSuper.

Offshore investment, primarily from Hong Kong, the USA, and Singapore, constitutes 19.0% of total investment volumes, underscoring Australia’s ongoing appeal for global capital due to its growing population and economic resilience. However, the NAB Commercial Property Index reflects negative sentiment, especially in the office and retail markets. The Industrial sector stands out with improved sentiment and expectations for capital growth in the coming years.

Office vacancy rates reached 10.2% in Q3, with a modest expected dip next year, and funding conditions, while challenging, are anticipated to improve in the next 3-6 months. Property developers’ plans for new works are below average, signalling subdued construction activity. Overall, the commercial property market faces challenges, with offshore investment and economic trends shaping the landscape.

Include graph: Monthly change in commercial property sale asking prices in Australia from January 2020 to September 2023 https://www.statista.com/statistics/1362593/australia-monthly-commercial-property-sale-asking-price-change/

Residential Property Prices

The resilience of the residential property market has defied expectations in 2023, surprising economists. Following a slight dip at the beginning of the year, prices stabilised and exhibited a 7.6% national increase year to date. Projections from KPMG’s latest property report suggest further growth, with residential house prices expected to rise by 3-5% in 2024 and experience a notable surge of 9.4% in the year leading to June 2025.

This upward trajectory is attributed to a combination of factors, including an undersupply of housing, population growth fueled by the return of migrants and overseas students, and a sustained demand that persists despite November’s interest rate hike. Dr Brendan Rynne, KPMG Chief Economist, emphasises the supply issue alongside several factors propelling asset prices higher, such as increased demand from migration, anticipated rate cuts in FY25, potentially relaxed lending conditions, rising rental costs pushing renters towards buying, barriers for developers in constructing new homes, a resurgence in foreign investor demand, and the enduring post-pandemic trend for more spacious living due to continued remote work.

Fixed Interest Rate Cliff

Contrary to expectations, the anticipated “fixed interest rate cliff” projected to impact housing prices has not materialised. Although a significant number of mortgagees are still transitioning from fixed to variable interest rates, concerns about a surge in distress sales have yet to manifest. NAB Chief Economist Alan Oster notes that individuals facing financial stress due to rising interest rates are adapting by taking on second jobs or cutting back on expenditures.

While there is still apprehension about the looming “fixed rate cliff,” RBA data indicates that most mortgage debt is currently on variable terms. KPMG Chief Economist Dr Brendan Rynne highlights that first-time buyers now allocate around half of their earnings to mortgage payments, a substantial increase from a third just three years ago. An estimated $350 billion of mortgages covering 880,000 Australian households are set to expire this year, with an additional 38 per cent, including about 450,000 loan facilities, expiring in 2024 and beyond. Despite these projections, distressed sales have yet to see a significant increase. Recent figures from Domain reveal a decline in distressed listings across capital cities, with Sydney, Melbourne, Hobart, Darwin, and Perth all experiencing reductions in distressed percentages compared to the previous year.

Government big spending on Infrastructure Projects

The International Monetary Fund (IMF) has attributed part of the responsibility for the increasing inflation to the Federal Government, suggesting that the elevated levels of infrastructure and consumption spending are better suited for revitalising a sluggish economy. The abundance of infrastructure projects is also noted to contribute to the ongoing labour shortage, as government initiatives vie with private projects for the available workforce.

A recently released independent review has found that the $120 billion infrastructure pipeline was facing $33 billion in cost blowouts. In response, Catherine King, Minister for Infrastructure, has announced that it will slash 50 projects with savings of $7 billion. Whether this measure will effectively alleviate inflationary pressures remains uncertain.

Minimum wage increase by 5.75%

On 1 July 2023, the National Minimum Wage and minimum Award wages increased by 5.75%. The new National Minimum Wage is $23.23 per hour, or $882.80 per week. The wage increase was dubbed the “biggest in history”, helping 2.7 million workers. While good for individuals, the wage increase was hard on the retail and hospitality industry, which has been impacted by rising inflation and the cost of living as people started to spend less to survive.

Scams

While specific figures for the total scams in 2023 are not yet available, it’s evident that scams are rising and becoming more sophisticated. In the first half of the year, scams increased by 50% yearly, as reported by the Australian Competition and Consumer Commission’s (ACCC) Scamwatch. Surprisingly, despite the surge in scams, financial losses experienced a slight decrease, with $293 million recorded in H1 2022 compared to $286 million in H1 2023.

Investment scams emerged as the most financially damaging during this period, accounting for 60% of all losses, surpassing $171 million. This is notable given that there were only 4,666 reports, nearly half resulting in financial loss. Not far behind are dating and romance scams, false billing scams, and phishing, costing Australians over $18.4 million, $17.4 million, and $17.3 million respectively in 2023.

In response to the escalating threat, ASIC’s new website takedown service provider has successfully removed numerous investment scams and phishing websites since July 2023. This targeted approach aims to identify and eliminate fraudulent and malicious websites reported by ASIC, contributing to a positive trend in reduced financial losses to investment scams. Assistant Treasurer and Minister for Financial Services, Stephen Jones, emphasised the effectiveness of anti-scam initiatives, noting a decline in losses to investment scams over the last quarter. Despite these positive signs, he emphasised the importance of ongoing vigilance to combat evolving scams.

Cyber Security

According to a government report, state-sponsored cyber groups and hackers are escalating their attacks on critical infrastructure, businesses, and homes in Australia. The newly formed defence agreement with Britain and the U.S. has heightened the country’s appeal as a target. The Australian Cyber Security Centre’s annual threat report reveals a 23% surge in cybercrime reports, surpassing 94,000 in the financial year up to June. It estimates a cyber intrusion on Australian assets occurs every six minutes, leading to the establishment of an agency in February to coordinate responses to these incidents.

In response to the rising cyber threats, the government is overhauling federal cyber laws, with details expected to be released next week. It is considering mandatory reporting of ransomware incidents by companies. The report indicates a 14% increase in the average cost of cybercrime to victims. A recent cyber incident at DP World Australia, a major ports operator, resulted in a three-day operational suspension. The average cost of cybercrime per report has risen, with small businesses facing $46,000, medium businesses $97,200, and large businesses $71,600.

Nigel Phair, a cybersecurity professor at Monash University, warns that cyber attacks against Australia will persist unless organisations prioritise security and robust risk management for their information assets.

Play it safe with Australian Securities

In a time of economic unrest and market volatility, choosing an investment opportunity that comes with transparency, certainty and security is imperative. Australian Security’s three funds, the Income Fund, Property Fund and Term Fund, all have conservative Loan to Valuation Ratios and securitised options to ensure your investment will safely grow, even in a volatile market.

Still not sure…

Call us on 1300 275 275 to talk to one of our Investment Managers or Investment Executives. We prioritise direct communication and personalised support for our clients.

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Matt Claffey – Team Member Profile

It’s not hard to see why Matt is an excellent fit at Australian Securities. His passion for what he does shines through his words. Matt gets a thrill from knowing that he has played a significant role in supporting individuals to achieve financial independence, which many of us pursue.

At Australian Securities, we pride ourselves on our values and our teamwork. We’re always looking for new team members who value this, just like Matt.

"Matt brings both experience and passion to his role as Head of Lending at Australian Securities Limited. Matt is a dedicated and effective team member who is highly motivated to achieve the right outcomes for clients to achieve financial independence. His hunger for success is infectious within the team."

Natalie Bode, CEO

Q&A with Matt

Q&A with Matt was both insightful and engaging. Here’s what he had to say.

Q. What is your role, and how long have you been at Australian Securities?

I’m the Head of Lending and was brought in to source, develop and expand the ASL finance division. Early on in my new role, I realised that my challenge was to grow awareness of the brand and build relationships with brokers so they would know that there is a viable alternative for their loan clients. November will be my 0ne-year anniversary.

Q. What do you like most about your role?

I love the challenge of complex structures and lending as it keeps my mind active. I’m motivated by success for my team and the wider business. I love the industry and building trusting relationships with brokers and borrowers. It’s fantastic to know that you have played a major role in supporting individuals to achieve their financial independence. I love the team I work with; Australian Securities has a great culture and is an enjoyable business to work with… everyone is both accountable and supportive.

Q. Name one of the most important lessons you’ve learnt throughout your career?

I believe in the mantra, “Don’t sweat the small stuff”. You have a sphere of things you can and can’t control in your life, and you get to choose whether you whinge about the things you have no control over or focus on what you can control. In other words, focus on what you can control. Getting caught up in the small stuff we cannot influence is easy. There is, however, so much within your control that you can impact positively, so focus on this. Control change rather than allowing it to control you. The change in focus can help you to avoid wasting your energy where you have no influence and instead use it to make positive changes – in life and work.

Q. Which Australian Securities value do you resonate with the most and why?

I resonate with all six values, but if I had to choose one, it would be HUNGRY. I am hungry; I love winning and seeing others win. I’m hungry to see our business succeed and grow. I’m hungry for sustainable success, to always do and be better for people – in business and life. When you are hungry for success, and you start to share that with your team and celebrate success when you achieve it, it can positively impact culture. It’s important to make the most of your time in the office; you spend so much time there.

Q. How do you like to spend your time when you aren’t working?

I love spending time with my family and my 15-year-old twins; they keep me on my toes. I enjoy going on holidays and am a tragic Brisbane Lions supporter. I enjoy playing competition tennis at my local club (well, truth be told, it’s challenging to keep up with the young ones, but I stick around because I enjoy playing, and even more, I developed great friendships through that).

Q. What would you do (for a career) if you weren’t doing this?

I never actually planned to work in finance. I fell into it. Like most people, I didn’t know what I wanted to do, and as both my dad and sister were in banking, I was encouraged to start there. Later on, I began to enjoy and love the work. However, thinking back now, I would have loved to be a Police profiler. I have a very analytical mind, love to problem solve and have always been fascinated with what makes people tick and what motivates each individual, whether good or bad.

Q. Do you have a favourite person, book, blog, or podcast that has influenced your life and career?

Without question, this would be my father. He has greatly influenced my life since I can remember in sports, career, family, personal and overall values. He always knew what to say, and he genuinely cared. He shaped me into the man and father I am today and taught me how to be a leader of people and in life.

If there were one piece of advice you would have to share with existing and prospective clients, what would it be?

I know it may seem quite basic, but I’d like to say that everyone should have a budget. It doesn’t have to be anything fancy. It’s a valuable tool for understanding where you spend your money and what you can afford. In today’s financial climate, where many are struggling, having a budget can help reduce overspending. While a budget won’t necessarily stop us from buying, it’s a great tool to tell us where our money should go. Take note of your budget, and don’t spend more than you have available. Make sure you hold yourself accountable.

Want to find out more about our loan division?

Call us on 1300 275 275 to talk to one of our Lending Managers. We prioritise direct communication and personalised support for our clients.

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Boosting your income with contributory mortgage schemes

When looking for better options to earn a decent income from your investments, you couldn’t be faulted for looking away from traditional banks and considering other alternatives, such as mortgage funds. But for the uninitiated, caution is advised as not all funds are created equal. Introducing a contributory mortgage income fund that is an Australian registered managed investment scheme that has stood the test of time.

Finding an improvement on bank’s dismal returns

Let’s face it: interest income from traditional banks is dismal, and the last 18 to 24 months have seen more volatility than we’ve had to face in quite some time. Because of this, many investors have been locked in investment funds, making it nearly impossible to withdraw their money.

Where, then, is it safe to invest?

We recommend looking at fixed-income contributory mortgage schemes as an excellent alternative to the low-interest Term Deposits and savings accounts on offer at most banks.

Why choose a fixed-income contributory mortgage scheme?

A contributory scheme is a non-pooled investment scheme in which the investor chooses a sub-scheme of a fund rather than having their investment pooled across all the fund’s sub-schemes. This ensures that individual Member returns cannot be impacted by other sub-schemes within the fund.

By choosing a fixed-income contributory mortgage scheme, investors can confidently look forward to knowing how much income they will regularly earn each month.

Because they are choosing a contributory (non-pooled) scheme, investors:

  • can choose where they want to invest their funds.
  • know where their money is invested.
  • are not subject to the same liquidity issues and risks as pooled funds.

Returns for fixed-income contributory schemes generally offer higher returns than traditional Term Deposits and bank savings whilst being secured by 1st mortgages. Returns can range from 4 – 10% depending on the fund, selected sub-scheme and risk level.

As with all investments, it is important to remember that higher returns usually mean higher risk. Make sure you know the loan-to-valuation ratio (LVR), and if it’s above 75%, make sure you know why and understand the high-risk level before investing.

Introducing the Australian Securities Income Fund

We encourage investors looking for a high-interest, short to medium-term investment option that has stood the test of time to consider the Australian Securities Income Fund. Compared to many other funds, the Income Fund comes out a cut above the rest, meeting the key benchmarks investors should include in their analysis of funds.

What Australian Securities does differently:

  1. We have in-depth experience in Funds Management with expertise in finance and investment in mortgage securities and property. With the origins of our business dating back to 1925 and across four generations of investors, Australian Securities is recognised as one of the country’s most established and reliable private financial service providers.
  2. Loans, and therefore investments, are 1st mortgages only, and loan-to-value ratios are capped at two-thirds of the property value. In other words, our maximum conservative Loan to Valuation Ratio (LVR) of 66% for all securities provides the investor with a healthy risk buffer in the event of a downturn in the property market.
  3. Our loan performance speaks for itself, with zero loans in arrears as of 30 September 2023.
  4. The Fund is audited bi-annually by independent external auditors.
  5. Australian Securities does not pay commissions or kickbacks. At the borrower’s request, Australian Securities may facilitate payment of introducer fees from settlement funds or periodic payments. However, due to the low management fees, Australian Securities does not pay commissions to introducers.
  6. We provide members an ‘assurance fund’ to ensure they still get paid interest if a borrower is late in payment.
  7. Australian Securities has the requisite net tangible assets to be a Responsible Entity and Self-Custodian and is permitted to hold certificates of title on behalf of sub-schemes. We do not use a third-party service.
  8. Australian Securities holds PI Cover of $5M.
  9. Some of our borrowers retire and invest their savings in the Australian Securities Income Fund

Remember to diversify

Advisors recommend that mortgage funds comprise only a small portion of your investment portfolio. You can speak to our team to review options for diversification

Have a question? Ready to invest?

Call us on 1300 275 275 to talk to one of our Investment Managers or Investment Executives. We prioritise direct communication and personalised support for our clients.

Remember to read the product disclosure statement and seek clarification from our team if any of your questions still need to be answered.

Is opportunity knocking for brokers?

Is opportunity knocking? Data released by the Mortgage and Finance Association of Australia (MFAA) indicates a massive opportunity for brokers willing to diversify. While figures show that the broker share of written mortgages last year was sitting around 71% as more and more Australians turn to brokers for options, the industry itself is hugely competitive, with the number of brokers growing annually. On top of stiff competition, the industry is slowly feeling the impact of this year’s consecutive interest rate increases, which have put significant pressure on household budgets.

This is different within the commercial lending space – which saw growth despite the pressures of inflation. According to MFAA, only 31% of mortgage brokers offer commercial lending, and while the number of commercial brokers increased as well, their share of the commercial lending market, purported only to be around 38%, is an opportunity for growth.

Turning to non-bank/private loan firms

Rising interest rates are placing pressure on both residential and commercial borrowers as they struggle to service loans that may have strict covenants and review clauses. The major banks are not geared to provide the flexibility needed to support commercial lending in such challenging times. However, non-bank and private money lenders can offer the flexibility and support needed to enable commercial lending that works for all parties (even in a downturn).

While many non-bank lenders have seen the opportunity and are gearing up to offer commercial loans, one private financial firm stands a cut above the rest, already offering commercial lending opportunities built to support lenders in the toughest of times while still protecting their equity. Australian Securities, a private investment and lending firm, has several noteworthy benefits for its lenders and the brokers looking after them.

Australian Securities: Your Trusted Finance Partner

Australian Securities’s reputation precedes them. As successful commercial property investors, they intimately understand the intricacies of commercial real estate. A reliable finance partner like Australian Securities can provide you and your clients with a distinct advantage that others can’t match.

1. Rapid Response to Enquiries

In the fast-paced world of commercial lending, timing can make or break a deal. Australian Securities stands out by offering Conditional Approval within a mere 24 hours. This rapid response ensures that your clients can seize opportunities when they arise.

2. Collaborative Decision-Making

At Australian Securities, brokers work directly with Lending Managers, eliminating unnecessary layers in the approval process. This direct interaction allows you to workshop scenarios with the decision-makers, ensuring your clients get the best outcome. We excel in problem-solving and understanding the challenges businesses face.

3. Expertise in Complex Ownership Structures

Commercial and industrial properties often involve intricate ownership structures, including partnerships, joint ventures, and trusts. Our Lending Managers possess the expertise to customise financing solutions to suit your client’s unique circumstances.

4. Straightforward Product Offerings

We believe that complexity doesn’t necessarily equate to quality. They offer clear, easy-to-understand products that meet your clients’ needs.

5. Flexible Loan Repayment Options

Recognising that one size doesn’t fit all, Australian Securities provides a range of flexible loan repayment options. These include Interest-Only, Principal and Interest (with borrower-specified principal reduction), Right to Repay, Right to Partial Discharge, Repayments via Security Deposit, Interest Capitalization, and Fixed Interest Rate Reset. This flexibility empowers you to tailor loans to your client’s financial objectives.

6. Competitive and Transparent Fee Structure

We maintain a straightforward and competitive fee structure. They are transparent about costs from the outset, enabling you to provide clients with accurate, easily understood quotes within 24 hours.

7. No Clawbacks

Australian Securities’ commitment to brokers is unwavering. They pay upfront Brokerage at loan settlement without any clawbacks.

8. Trail Income

Australian Securities is among the few private lenders in Australia that offer trail income, ensuring brokers benefit from their long-term partnerships.

Now is the time to act

With commercial property interest rates starting from 7.4%, now is the time to connect with us to explore how we can assist you in capitalising on the promising commercial lending sector.

Whether you are looking for a tailored commercial loan, complex loan, or to SMSF loan, Australian Securities has you covered. Our Finance team will work closely with you to create a loan that meets your client’s needs.

Still not sure…

Call us on 1300 275 275 to talk to one of our Finance Managers or Lending Executives. We prioritise direct communication and personalised support for our clients.

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