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Navigating the tough housing market: Opportunities and responsibilities for financial advisers

In the current tough market, with record low dwelling sales and low business and consumer confidence, it's important to recognise the challenges we're facing. However, it's also crucial to look forward and identify the opportunities that will arise as $170 billion mortgages come off their fixed rates in the next 12 months.

Monday, May 22nd 2023, 4:30PM

By Kip Hanna

While we can't control the market, we can focus on the controllable - our businesses and how we run them. Here are some things we should be doing now:

Go back to basics: Customer service has never been more important. As it's becoming more complex to navigate obtaining finance and banks are pulling back from providing personalised advice, the need for qualified advisors has never been higher. Ensure your customer experience is exceptional and ask for referrals and recommendations from satisfied clients.

Use the quiet time to do your housekeeping: Make sure you're up to date with compliance requirements. With the expiry of the safe harbour for advisors to be qualified, we're now operating in a fully regulated environment where credibility to clients is recognised by a license. Maintaining professionalism backed up by qualifications and high-quality record-keeping is important.

Our industry is becoming a profession that is gaining credibility backed by qualifications and regulations. I’m a chartered accountant which is an industry where for many years credibility has been established with qualifications and professional advice. I think it’s great to see this come through to financial advisors.

The current market differs from previous high-rate environments in terms of affordability. Driven by inflation, it's harder for people to take out a loan or refinance under the assessment criteria of CCCFA. While affordability is essential for accessing a loan, there needs to be some flexibility for commercial judgment in providing credit. We need an assessment guide rather than hard fast rules. The requirement for advisors to be qualified gives a new level of safety and comfort for borrowers, reducing the need to be governed by strict test criteria, and making now an appropriate time to reconsider how the CCCFA is applied in a practical sense.

However, more than assisting New Zealanders to get their home loan, the role of a financial advisor is to coach their clients in financial management. Financial independence is really important and should be embedded from a young age, the results of which are powerful – it’s why I joined NZHL. There can be life-changing benefits for people who achieve financial freedom, not only mentally with the weight of their loan lifted off their shoulders but also in terms of wealth creation. Interest cost savings can be used to invest in income generators, lifestyle, or retirement savings, offering more financial freedom.

As we embrace market and industry changes and our responsibilities as qualified advisors, we should consider how we can assist in easing the pains of this economic climate for our clients and guide them in creating a better financial future. While we continue to navigate operating our businesses in this extremely challenging environment, we should remember that this cycle won't last forever. There are undoubtedly more challenges to come, but as inflation and interest rates begin to ease, the housing market will start to unlock creating additional growth opportunities again.

 

About NZHL

NZHL is a passionately Kiwi, passionately local home loan and insurance network currently helping more than 50,000 New Zealanders collectively save millions of dollars in interest costs every year.

Part of Kiwi Group Capital Ltd (KGC) which are 100% Government owned, NZHL operates with an Independent Board and 70 local business owners nationwide.  NZHL believes in helping Kiwis achieve financial freedom, faster and takes a structured, personalised approach to bring this to life.

* Please note – Kip Hanna is the CEO at NZHL and has written this opinion piece based on his experience. This article is intended to be general in nature and should not replace personalised business or career advice.

Tags: NZHL

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AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 ▼6.75 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 ▼6.75 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.35 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.75 6.65
Median 8.64 7.29 7.32 6.65

Last updated: 8 April 2024 9:21am

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