Financial advisers and mortgage brokers are being offered big commissions – up to 30 per cent bigger than last year – to sell completed apartments during the downturn.
In further moves to get sales going, potential buyers are also being offered extras like luxury fixtures, more flexible terms and partial rental guarantees.
In inner-Melbourne areas the apartment market is facing multiple hurdles as apartments flood the market that were being built during the boom. Now that demand is falling, developers and also contending with fears around flammable cladding and building standards, a fall in foreign investors and tightened lending.
In a bid to combat this, developers are targeting financial advisers specialising in self-managed super funds that allow limited recourse lending for investment properties and the mortgage brokers who arrange loans.
The advisors are being targeted with a rise in commissions. A year ago commission rates for apartments were around 2-5 per cent and now they are being offered at around 9 per cent.
Higher commissions are being paid for off-the-plan apartments that require less sale numbers before qualifying for finance.
Financial advisers are bound by law to disclose any incentives being offered to them to their clients and disclosure rules for mortgage brokers are currently being revised.