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FLATPACK FINANCE: HAS THE BANK FINALLY UNBLOCKED THE BUILDING PIPELINE? · The Real Estate Show

• 0:00
  Speaker 1: Well, cam flat pack finance, what actually is that? And
• 0:04
  Speaker 1: has the bank finally unblocked the building pipeline?
• 0:07
  Speaker 2: Now?
• 0:07
  Speaker 1: You know, when we're running with a headline like that
• 0:09
  Speaker 1: in our show, it can only come for one of
• 0:11
  Speaker 1: our regular guests, one of our very special regular guests,
• 0:15
  Speaker 1: Bushy Martin from No How Property Finance. Bushy, good morning,
• 0:18
  Speaker 1: Good morning guys.
• 0:19
  Speaker 2: I love the subject, so they can't wait to unpack
• 0:21
  Speaker 2: it for you.
• 0:22
  Speaker 1: Yes, unpack the flat pack. Now, look tell us what
• 0:26
  Speaker 1: all this means? What has changed with the way modular
• 0:29
  Speaker 1: homes can now be financed?
• 0:31
  Speaker 2: Yeah, well this is a really good story because up
• 0:33
  Speaker 2: until now banks have treated factory built homes a bit
• 0:36
  Speaker 2: like suspicious luggage at the airport. They wouldn't release the
• 0:39
  Speaker 2: money until a house had safely landed on site, which
• 0:41
  Speaker 2: is a bit like delivering the fix thing which are
• 0:44
  Speaker 2: after the sheds burnt down, guys. And to be honest,
• 0:46
  Speaker 2: about as useful as contraception as a convent. So yeah,
• 0:49
  Speaker 2: technically available but actually practically pointless, which means that flatbat
• 0:53
  Speaker 2: finances finally and has been a bit of a financial
• 0:57
  Speaker 2: face up till now. But that's finally changing, to say,
• 1:00
  Speaker 2: because one major bank can now find up for sixty percent,
• 1:03
  Speaker 2: sometimes after eighty percent while the home's off site, and
• 1:06
  Speaker 2: Tasmania is also backing that same gap with a government guarantee.
• 1:10
  Speaker 2: So factory fabrication sactory finance are finally facing the same
• 1:14
  Speaker 2: direction and the money can now travel with the house
• 1:16
  Speaker 2: instead of waving goodbye from the lading dock. So it's
• 1:19
  Speaker 2: really good news.
• 1:19
  Speaker 3: Okay. So two questions come out of that for me
• 1:21
  Speaker 3: straight away. Number one, why the aversion? So why have
• 1:24
  Speaker 3: banks have been not supportive of this? And then which bank?
• 1:30
  Speaker 2: Yes, well, i'll answer the second one. First, it's actually
• 1:33
  Speaker 2: the Commonwealth Bank that's got behind it, and I guess
• 1:36
  Speaker 2: the issue has been that banks generally lend against the
• 1:42
  Speaker 2: land and whatever's bob to tour it. So that means
• 1:44
  Speaker 2: that half the house seeing in the factory isn't yet
• 1:46
  Speaker 2: considered security by the banks on a suburban block, and
• 1:50
  Speaker 2: you can understand its ability goes belly up. Bank can't
• 1:52
  Speaker 2: exactly repossess the pantry tie away, they on sweat and
• 1:55
  Speaker 2: then flog the roof on marketplace guys. Because the traditional
• 1:59
  Speaker 2: finance follows as sort of four neat completion steps on site,
• 2:03
  Speaker 2: So a slab a frame like up and finish. But
• 2:06
  Speaker 2: as we know, modular housing can do several stages at
• 2:09
  Speaker 2: the same time under one factory roof while the foundations
• 2:12
  Speaker 2: are actually happening somewhere else. So the builders of one
• 2:14
  Speaker 2: of the cash before the construction and the banks of
• 2:16
  Speaker 2: want in construction before cash, and that's led buyers trapped
• 2:19
  Speaker 2: between them a bit like a possum and evolving doors,
• 2:22
  Speaker 2: leaving them pretty busy in But we're getting absolutely nowhere.
• 2:25
  Speaker 2: So it's great that we're finally seeing this come through
• 2:29
  Speaker 2: and we're finally seeing the removal of that banking blockage
• 2:33
  Speaker 2: because there's never been a construction issue. So you know,
• 2:35
  Speaker 2: we're now pulling that fat financial cork out of our
• 2:38
  Speaker 2: housing supply pipe, hopefully.
• 2:40
  Speaker 1: And so Commonwealth's on board. Do you think other banks
• 2:43
  Speaker 1: are likely to come on board to eventually or there'll
• 2:46
  Speaker 1: still be that reluctance there.
• 2:48
  Speaker 2: Well, I think that you know, the Commonwealth Bank is
• 2:50
  Speaker 2: still the biggest bank in the country by by far,
• 2:53
  Speaker 2: and that if they and they're pretty conservative, so if
• 2:56
  Speaker 2: they're making them moves, and it's likely they're coming on board,
• 2:59
  Speaker 2: and it's having it a good time because the bank's
• 3:01
  Speaker 2: business is down given what's happening in the marketplace generally,
• 3:05
  Speaker 2: and they're starting to sharpen their pencils. So this is
• 3:07
  Speaker 2: a really good time to get on board. And I
• 3:09
  Speaker 2: actually hope government's at state and federal level get on
• 3:12
  Speaker 2: board with this as well, because everyone's talking about their
• 3:15
  Speaker 2: housing supply shortage. Well, this is a great way to
• 3:18
  Speaker 2: improve that pretty significantly.
• 3:19
  Speaker 3: And I tell you what, Bushy, and you won't know this,
• 3:21
  Speaker 3: but overnight it's just been announced here in the Act
• 3:24
  Speaker 3: parcele of land that has had a question mic over
• 3:26
  Speaker 3: it for a long long time, it's just been released.
• 3:28
  Speaker 3: It is huge and so this is an opportunity for
• 3:31
  Speaker 3: three thousand brand new homes.
• 3:33
  Speaker 2: To be built. Incredible, now, bring it on. I mean,
• 3:37
  Speaker 2: this is what Australian needs to be doing, is getting
• 3:41
  Speaker 2: out of the way with some of these exercises that
• 3:44
  Speaker 2: have just been done forever but it haven't improved the situation.
• 3:47
  Speaker 2: We've got a really good opportunity now and it's a
• 3:49
  Speaker 2: good time given the pressures that are on housing generally. Yeah.
• 3:52
  Speaker 1: Absolutely, Well we'll wait and see what happens. Super interesting
• 3:54
  Speaker 1: development and love that you are able to join us
• 3:57
  Speaker 1: to share the details of that, Bushy. Thanks so much thanks.
• 4:00
  Speaker 2: Thanks.
• 4:01
  Speaker 1: She is Bushy Martin from Nohow Property Financed. They're talking
• 4:04
  Speaker 1: about flat pack finance.