Target Market Determination – Property Expense Loans

This Target Market Determination (TMD) has been prepared in accordance with the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 (Cth) and associated Regulations. TMDs are designed to assist issuers to ensure that the financial products they issue are likely to be consistent with the likely objective, financial situation and needs of the consumers for whom they are intended (the target market) and to assist distributors to ensure that financial products are distributed to the target market.

This TMD is general in nature and should not be construed as financial advice. Consumers should obtain independent advice prior to acquiring the product to ensure that it is appropriate for their objectives, financial situation and needs.

Product

Property Expense loans.

Product Issuer

This product is issued by Property Credit Pty Ltd ACN 638 329 674, Australian Credit Licence Number 528878

Date of TMD

12 December 2022

Target Market Determination

Description of target market, including likely objectives, financial situations and needs

This product has been assessed as meeting the likely objectives, financial situation and needs of consumers who:

• Meet the company’s eligibility criteria (including but not limited to):
  • Are over the age of 18 years of age
  • Are an Australian citizen or permanent resident
  • Are the legal owner of a residential investment property in Australia
  • Have appointed a real estate agency to manage the property as a rental
• Require a line of credit to cover expenses required to enhance or maintain the property
• Have property which is rented or available for rent
• Require the ability to progressively draw funds
• Can make repayment from the rental income of the property
• Can complete the application form online.

Description of product including key attributes

This product’s key attributes include the following:

• Loan Advance is subject to lending criteria, the loan to value ratio in the property and gross rental income
• Loan repayments maybe weekly, fortnightly or monthly
• Fees and charges include establishment fees, monthly fees and late fees
• Product features:
  • Online application process
  • Digital Verification Service capability for verification of identity requirements
  • Customer portal
  • Customer support including phone, email and chat capabilities
  • Electronic contract distribution and signature capability

Class of customers for whom this product is not suitable

This product may not be suitable for consumers who:

• Do not meet our eligibility criteria
• Do not have sufficient equity in the property
• Have not appointed a real estate agent to manage the property
• Do not rent out the property

Explanation of why the product is likely to be consistent with the likely objectives, financial situation and needs of consumer in the target market

The product allows property owners who own a residential investment property managed by a property manager or real estate agent to have a facility available to cover expenses required to enhance or maintain the property so as to enable the property to be in a presentable condition for rent.

The product also allows borrowers to progressively access funds.

Distribution Conditions

This product can be distributed through the distributors set out below. All distribution channels require an application for the loan to be submitted to Property Credit via its website or the Property Credit sales team.

1. Direct – Property Credit’s website and sales team 

Property Credit staff are required to undertake training prior to assisting applicants with loans and must follow all documented procedures. Property Credit will ask screening questions as part of the application to ensure that a prospective borrower is within the target market set out above.

Property Credit considers this is an appropriate distribution channel because the nature of the target market and the requirement of all sales staff to have the necessary training, skills and knowledge to assess whether the consumer is within the target market.

2. Third Party – Real Estate Agents 

Real estate agents who are appointed as property managers by property owners of residential investment properties may refer those property owners to Property Credit to assist them with funding expenses required to enhance or maintain their residential investment property. Property Credit will only enter into agreements with real estate agents who it considers are reputable and who have the necessary licences Property Credit require.

Property Credit considers this is an appropriate distribution channel due to their industry knowledge and the nature of the target market.

Review Triggers

The following events are review triggers that would reasonably suggest that the TMD is no longer appropriate: 

• A significant dealing of the product to consumers outside the target market occurs
• A significant number of systemic complaints are received from consumers in relation to the product
• There is a material change by Property Credit to the product or the terms and conditions.
• There are significant and adverse changes in the credit performance of the product such as overdue payments, defaults or hardship applications.
• There are significant changes to Australian credit laws that affect the product.

Review Period

First review date
6 months after the date of this TMD

Period review
Every 12 months after the initial and each subsequent review.

Trigger Review
Review to be completed within 10 business days of the identification of a trigger event.

Reporting Requirements

The following information must be provided to Property Credit by distributors if they become aware of any of the following matters within the corresponding timeframe.