The unit price across all three of our retail funds remains stable at $1.00.

All monthly distributions have been paid in full for the month of June.

Lending Activity Update

Quarterly Loan Settlements
as at 30^th of June 2022

Loan originations this month were $19,713,000, with an increasing proportion being originated via our online origination portal.

Current Loans by Fund Source
as at 30^th of June 2022

Current Loans Geography
as at 30^th of June 2022

Why Invest with ASCF?

An Interesting Transaction

Problem:

ASCF was recently approached directly by a veterinarian who required cash to fund renovations on his home whilst his property was prepared for sale. He had recently retired and was living in regional New South Wales. After living and working regionally all his life, he felt a change was needed and planned to move closer to a regional city. By selling his current home, he would have the money to purchase a new home, but his current property was in dire need of renovations to maximise its value.

Solution:

ASCF obtained a valuation and took a 1st mortgage over his property, providing the borrower with a loan of $600,000 at 9.75% for six months on an LVR of 51.05% enabling him to refinance his existing mortgage and providing the funding to undertake the renovations.

The borrower plans to use the proceeds from the sale of his freshly renovated property to pay back the debt.

What ASCF Does Differently:

Many borrowers wish to make the most of their assets and maximise their returns. ASCF’s solutions-focused lending approach is just another way we help borrowers achieve their goals.

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Market Update

Aggregated property values across the country on a monthly basis have slowed marginally, (-0.80%). The highest performer this month was Adelaide (+1.30%), followed closely by Perth (+0.40%).

Australia’s property price increases experienced over the last 18 months are now well and truly past their peak rate of growth.

Interestingly however unit prices are holding their value better than houses across capital cities with regional property still remaining in positive growth.

The market is quickly becoming a buyers market with aggregate home sales nationally through the June quarter now 15.9% lower than a year ago.

However, with housing conditions cooling, the flow of new listings to the market is slowing which along with a strong labour market should help support prices.

Rental markets around the country also remain extremely tight with rents and residential property yields now rising at a faster rate than housing values also providing a buffer for property investors. Ultimately however it will be interest rates which will have the largest impact on the path of housing markets.

The weighted average clearance rate across the country is lower than last year at 59.8% compared to 2021’s 75.4% clearance rate (-15.60%).

Other cities across the board also achieved rates marginally lower than last year, with the exception of Brisbane.

Brisbane increased by +5.90% compared to the previous year, with Canberra being dropping in comparison (-29.70%).

Rob Sciacca
Senior Investor Relations Executive

E: [email protected]
M: 0407 101 222
T: 07 3506 3690

Donna Rodriguez
Investor Relations Officer

E: [email protected]
M: 0405 183 051
T: 07 3506 3690

Loan originations this month were $13,603,402.30, with an increasing proportion being originated via our online origination portal.

The unit price across all three of our retail funds remains stable at $1.00.

All monthly distributions have been paid in full for the month of May.

Lending Activity Update

Quarterly Loan Settlements
as at 31^st of May 2022

Current Loans by Fund Source
as at 31^st of May 2022

Current Loans Geography
as at 31^st of May 2022

Why Invest with ASCF?

One of the benefits of investing in ASCF pooled mortgage funds is that it grants investors access to the property sector without owning, operating, or directly financing properties.

Our managed pooled mortgage funds pay monthly targeted distribution rates of 4.5% to 5.5% per annum, depending on your choice of fund and investment term, allowing for income without the hassle and time cost of tenants.

Direct property investment takes time, as such, investing with ASCF relative to direct property investment may provide further liquidity advantages, with terms as short as three months.

Further, with lower capital investment requirements, you can access our range of pooled mortgage funds starting from $10,000, denoting that it is unnecessary to make large deposits to be invested in the property market.

An Interesting Transaction

Problem:

ASCF was approached directly by a charity foundation that builds accessible educational programs for disadvantaged children of Australia. The charity had been growing recently thanks to donor interest in their work and they planned to expand their operations. Unfortunately, the charity lacked the required funds to pay the stamp duty on their new regional office location, and traditional lenders were taking far too long.

Solution:

ASCF reviewed in independent valuation on a 1st mortgage property they owned and approved a 6-month loan of $160,000 at 8.28% pa with an LVR of 17.78%. The borrower paid the duty owing and plans to repay the debt with their newly acquired donor funding.

Repayment will come from cashflow.

What ASCF Does Differently:

ASCF is no stranger to charities; we are a platinum partner of the national food insecurity non-profit Dig In: and are quick to provide for foundations in need of funding.

Market Update

Aggregated property values across the five major capitals on a monthly basis dropped by -0.4%, with the highest performers being Brisbane showing +0.80%, and Adelaide at +1.80% both continuing to show growth. Sydney and Melbourne dropped by -1.00% and -0.70%, respectively.

Regional Australia has been shielded from the slight slowdown in housing values across the capitals.

Specifically, in Sydney and Melbourne, stock levels have been rising by +1.5% and +8.1% above average levels in the past five years. In Adelaide and Brisbane, stock levels are below average at -39.5% and -38.2%. These conditions weaken values in the former and significantly boost values in the latter.

With interest rates expected to normalise over the next 12 months, we anticipate continued softness in the Sydney and Melbourne property markets; however, we expect the impact to be limited due to a structural undersupply of housing across the country and unprecedented levels of international migration and investment.

The weighted average clearance rate across the country is lower than last year at 63.7% compared to 2021’s 73.5% clearance rate (-9.80%).

Other cities across the board also achieved rates marginally lower than last year, with the exception of Perth, and Adelaide.

Perth increased by +23.60% and Adelaide by a further +4.60% compared to the previous year, with Canberra being pushed down in comparison (-14.70%).

A Modest Mortgage Market

CoreLogic has released new figures suggesting mortgage repayments can be significantly cheaper than rents in over 250 suburbs. The areas affected include Adelaide and Darwin where differences can be as stark as $1000 a month. Many younger home buyers and investors are attempting to cash in as rents rise across the country.

Source: Australian Financial Review

Apartment Attraction

More and more buyers are now entering the apartment market as the difference between median unit prices and house prices grows by 41%. This trend has been buoyed by a 5.9% increase in first-home buyers in the market.

Source: Australian Financial Review

Loans under Labor

Labor’s newly proposed plan “Help to Buy” will endeavour to relieve housing affordability for homebuyers earning under $90,000 per annum. The plan will see the government take a 40% stake in purchased houses valued under $950,000. Buyers will be exempt from lender’s insurance, and they will not pay rent on the portion of their property owned by the government.

Source: Australian Financial Review

Loan originations this month were $6,977,000, with an increasing proportion being originated via our online origination portal.

The unit price across all three of our retail funds remains stable at $1.00.

All monthly distributions have been paid in full for the month of April.

Lending Activity Update

Quarterly Loan Settlements
as at 30^th of April 2022

Current Loans by Fund Source
as at 30^th of April 2022

Current Loans Geography
as at 30^th of April 2022

Why Invest with ASCF?

Our managed pooled mortgage funds aim to provide a predictable monthly interest distribution to investors. But how have we performed so far?

Since its inception in 2016, we have paid all investors the advertised distribution rate in full each month and no investor has ever lost any capital. We have continued to grow, even through a challenging and changing environment. Curious to see more in-depth performance statistics?

See our Performance History to view past averages of the interest paid to investors.

Investors’ capital and interest payments are not capital guaranteed and our past performance is not an indicator of future performance.

An Interesting Transaction

Problem:

A broker approached ASCF on behalf of their client in February, who required funding to facilitate the purchase of a new home close to the picturesque Blue Mountains. Unfortunately, the borrower did not have the cash on hand to realise their dream of a tranquil mountainside life. However, the borrower did own a home in the rural village of Orange, New South Wales, and wished to sell the property after moving.

Solution:

After ASCF obtained an independent valuation, we were able to approve a bridging loan of $217,000 at 8.45% pa for a 3-month term, with an LVR of 53.17%. The borrower used the funds to successfully purchase their new home and repaid their loan this month from the sale of their Orange village property.

Market Update

Aggregated property values across the five major capitals on a monthly basis dropped by -0.4%, with the highest performers being Brisbane showing +0.80%, and Adelaide at +1.80% both continuing to show growth. Sydney and Melbourne dropped by -1.00% and -0.70%, respectively.

Regional Australia has been shielded from the slight slowdown in housing values across the capitals.

Specifically, in Sydney and Melbourne, stock levels have been rising by +1.5% and +8.1% above average levels in the past five years. In Adelaide and Brisbane, stock levels are below average at -39.5% and -38.2%. These conditions weaken values in the former and significantly boost values in the latter.

With interest rates expected to normalise over the next 12 months, we anticipate continued softness in the Sydney and Melbourne property markets; however, we expect the impact to be limited due to a structural undersupply of housing across the country and unprecedented levels of international migration and investment.

The weighted average clearance rate across the country is lower than last year at 63.7% compared to 2021’s 73.5% clearance rate (-9.80%).

Other cities across the board also achieved rates marginally lower than last year, with the exception of Perth, and Adelaide.

Perth increased by +23.60% and Adelaide by a further +4.60% compared to the previous year, with Canberra being pushed down in comparison (-14.70%).

To Buy or Not To Buy

Interest rates have never been lower, and with the number of rental homes falling for some time, many are discovering purchasing a home to be more affordable than renting.

Source: Australian Financial Review

Beach-Day Boom

A six-bedroom, three-floor home in Noosa is set to break records in a startling show of growth in the housing market. The property was built in 1985 on land costing only $90,000 ($274,015 inflation-adjusted). However, the home is now set to sell for over $17 million!

Source: Australian Financial Review

Loan originations this quarter were $86,513,720, exceeding expectations when compared to the previous year’s performance at $28,311,300 (+205.58%). We continue to see elevated demand in loan originations.

The unit price across all three of our retail funds remains stable at $1.00.

All monthly distributions have been paid in full for the month of March.

Lending Activity Update

Quarterly Loan Settlements
as at 30^th of March 2022

Current Loans Geography
as at 30^th of March 2022

Why Invest with ASCF?

ASCF operates three pooled mortgage funds with monthly distributions for investors secured by mortgage investments over Australian property.

Our business serves a niche area in the market for borrowers. We provide a short-term solution for borrowers where, if approved, funds can be provided in as little as 72 hours subject to the loan meeting our lending criteria and valuation policy.

The higher rate the borrower pays for our service is a short-term rate for a specific purpose and intended to be treated as such. When assessing a loan, we examine a range of factors, including the property location and quality of the asset, the purpose of the funds and the loan to value ratio.

The most important criteria however is the borrower’s exit strategy. We require evidence of how the borrower intends to exit the loan at the expiration of the term which could include the sale of the security property or refinance.

A key question in our assessment is always whether the borrower will be better off after they leave us as a result of having taken out the loan.

An Interesting Transaction

Problem:

A broker approached ASCF on behalf of their client, who required funds that would allow him to fulfil his dream of living in a tropical paradise on his own houseboat.

Unfortunately, he did not hold the funds to purchase the boat. However, the borrower owned a home in Port Macquarie, New South Wales, which he intended to sell once he had embarked on his new life.

Solution:

After ASCF reviewed an independent evaluation, we were able to approve a sale funding loan of $139,000 at 7.95% pa for a 3-month term, with an LVR of 26.99%. This provided him with sufficient funds to purchase his new home on the high seas.

Market Update

The number of auctions across Australia’s eight capitals rose from 2,710 to 3,062 (+12.99%) this week compared to last year, with Melbourne conducting 182 more auctions (+13.77%), Brisbane with 37 (+24.34%), Sydney with 20 less (-1.95%), and the remainder of the country at 155 more auctions than the same period in 2021.

The weighted average clearance rate across the country is much lower than last year at 69.8% compared to 2021’s 80.9% clearance rate (-11.10%). Other cities across the board achieved rates marginally lower to last year, with the exception of Adelaide. Adelaide increased by (+1.60%) compared to the previous year, with Perth being pushed down in comparison (-27.90%).

Aggregated property values across the country on a yearly basis have continued to grow (+16.20%), with the highest performer being Brisbane (+30.00%), followed by Adelaide (+26.30%) once again. Property values continue to grow throughout this year. Although clearance rates have slowed, median sale prices have climbed.

This state of affairs has had many economists concerned about housing affordability in recent years. But as stated in our Quick Insights section, the Government’s attempts to intervene are not assisting or balancing the situation. Instead of assisting developers and construction contractors, the government programs subsidise mortgage borrowers increasing demand beyond serviceable means.

Guaranteeing Growth?

The Federal Government’s new home guarantee scheme is set to roll out into regional areas and is likely to raise property prices. The supply of housing and construction services historically responds slowly to demand; however, the scheme, which allows first-buyers to purchase with a 5% deposit, will also be open to existing homeowners.

Source: Australian Financial Review

Weekday Woes

According to recent data from Domain, the best time to auction your home are weekends. Auctions on weekends reportedly sell at prices up to 10% higher than during the working week. In Adelaide specifically, prices can increase by almost 19%.

Source: Australian Financial Review

ASCF Current Targeted Distribution Rates

ASCF Premium Capital Fund

6 Months	12 Months	24 Months
4.50%	4.75%	5.00%

The rate reduction will also ensure we are able to continue to maintain an adequate buffer against any future macroeconomic shocks such as we have seen over the last two years and as such we consider it to be in the best interests of all our investors.

Effective 1st April 2022 our investor interest rates on new investments across our funds are displayed to the left.

All current investments will continue to be paid at the same rates offered at the time funds were invested but will renew at the new investment rates on maturity.

We are also starting to fund longer-dated loans within the ASCF Premium Capital Fund and as such the Premium Capital Fund three-month investment term will no longer be offered.

Those investors who invested in Premium Capital with a three-month term will be contacted prior to their maturity and invited to invest in Select Income or High Yield for the same term or a longer-term within the same fund.

Loan originations this month were $7,471,000, above expectations when compared to February last year $3,810,500 in loans.

The unit price across all three of our retail funds remains stable at $1.00.

All monthly distributions have been paid in full for the month of February.

Lending Activity Update

Quarterly Loan Settlements
as at 28th of February 2022

Current Loans by Fund Source
as at 28th of February 2022

Current Loans Geography
as at 28th of February 2023

Why Invest with ASCF?

At ASCF, we like transparency and believe you should know what security backs up your investment.

That is why we publish our fully audited financial statements and a list of our current loan portfolio. The loan portfolio includes active loans and every loan we have ever written in the ASCF retail funds.

From this summary, investors can view how we invest the capital and what security we take. It demonstrates how we manage the funds and achieve the net monthly incomes paid to investors.

You can view the fund the loan is in, the term, the LVR, the type of mortgage security and the interest rate charged to the borrower, along with the geographical spread of the mortgages.

Mortgages over Australian property secure all the loans and you can see for yourself precisely what you are invested in.

An Interesting Transaction

Problem:

A broker approached ASCF on behalf of their client, who required funds to refinance an existing reverse mortgage and provide additional funding for the subdivision of their property in Yarramalong, NSW. The retired couple had received Development Approval to subdivide their large block and required a further $150,000 to complete the works.

Solution:

After assessment, ASCF was able to approve a loan of $475,000 at 9.85% pa for an 8-month term at an LVR of 39.58%. This provided them sufficient funds to refinance their existing loan and complete the works, and allowed them ample time for the subdivided block to be sold upon completion of the subdivision.

The couple intends to sell the subdivided block upon completion, allowing them to repay the loan.

Market Update

The number of auctions across Australia’s eight capitals rose from 2,473 to 3,384 (+36.84%) this week compared to last year, with Melbourne conducting 262 more auctions (+20.17%), Sydney with 365 (+43.25%), Brisbane with 107 (+92.24%), and the remainder of the country at 178 more auctions than the same period in 2021.

The weighted average clearance rate across the country is slightly lower than last year at 74.3% compared to 2021’s 79.3% clearance rate (-5%).

Other cities achieved rates reasonably similar, if marginally lower to last year, with the exception of Perth and Adelaide. Adelaide increased by (+5%) compared to previous years, with Sydney down marginally (-8.4%).

Aggregated property values across the country on a year on year basis have grown strongly (+19.03%), with the highest performer being Brisbane (+30.37%) followed by Adelaide (+25.77%).

Despite near-constant predictions that property values will fall over the next three years, property clearance rates, auction sale prices, and by extension, property values have risen considerably.

The market appears to be relatively robust in the face of such opposition by economists. However, we would expect that after a period of such growth any future growth would be considerably subdued and possibly flat.

Rental Crisis

The national shortage of rental property continues to increase as more real estate investors remove their property from the rental market and sell to take advantage of rising prices. This will likely result in significant increases in rents as tenants compete for available properties.

Source: Australian Financial Review

Discouraging Market Movements

Despite a shortage of rental property nationally, motivated by market movement, some property owners are opting to stay put. This comes as the stamp duty rates across Australia have continued to increase over the last several years, slashing the number of properties sold each year based on historical averages.

Source: Australian Financial Review