As banks continue to tighten their commercial property lending, opportunities are opening up for second-tier companies, says a Hamilton consultant.
Noni Martin also says the market for smaller duplex and townhouse developments is proving resilient during Covid-19.
Noni Martin
Martin, who has just started with Hamilton-based mortgage broking house Omega Capital, says the company is cautiously optimistic after it “hit the ground running” once Covid-19 lockdown restrictions eased. “There was a lot of inquiry and a lot of good signs there around demand.”
She says duplexes or townhouses are where they are seeing the strongest support in terms of sales.
“The data and sales at the moment [show]there’s still some really, really good support out there for the townhouse market, the affordable end of the market. Those types of assets are still being purchased, and in fact, we had some customers sell while they were in lockdown.
“We are seeing confidence at the moment. We’re cautiously optimistic about the medium term.”
Second-tier firms such as Omega are benefiting as banks pull back on commercial property lending, in a continuation of a trend that pre-dated the pandemic, Martin says.
Some of the smaller deals that banks would once have done with little hesitation are now off their radar, she says.
“That creates an opportunity for us in the second tier space to have some lower-risk deals that we wouldn’t normally see.”
The firm is handling more inquiry from people who have always been with a bank and have not accessed second tier lending before, she says.
“We’re seeing that a lot with contractors, guys who are home builders, who have had a consistent line of funding from banks previously, but are now finding it hard to do what they want to do. And any type of farm asset financing is quite difficult to get in a bank. That’s the feedback that we’re getting.”
Martin, a former Olympic basketballer, shifted from Auckland to Hamilton with a young family in March, for an easier lifestyle.
She says the major barrier for professionals such as her when weighing a job offer in the Waikato is the lack of future career opportunities. But greater connectedness via rail and the developing expressway has mitigated that, and contributed to her own decision to leave her Queen Street job.
“I thought, well, what’s the worst case scenario here? I mean, I can catch a train or commute an hour and a half a day. I built that into my thinking around whether or not we should permanently move.”
She wasn’t banking on the worst case scenario involving a pandemic lockdown that meant her new job was suddenly up in the air. “It was very much touch and go.”
Now that is behind her, she is enjoying the flexibility of her new role after a corporate career with major banks including ANZ, BNZ and, in Perth, Bankwest.
“Sometimes when you get a deal down on paper, it doesn’t tick all the boxes, but you know in your gut it’s a good deal. And you don’t necessarily get discretion to push those ahead when you’re at a bank,” she says.
“I’m really enjoying the ability to have some discretion using my experience to get deals done that are genuinely good deals that should be being done to help our economy get ahead.” She says, however, Omega is looking closely at the deals coming in. “We have to be a lot more thoughtful about the type of asset, where it is, what it is. We’re considering them each on their merits. We are taking the pandemic issue into account.”
