The Big Four clean up with mortgage market share

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May 23, 2011

The major banks appear to be winning the battle for the lion’s share of Australia’s $1.2 trillion mortgage market. ABS figures for the March quarter reveal non-bank lenders’ market share fell from 2.7 to 1.2 percent. At the same time, the Big Four increased their stake to 91.5 percent, up from 89 percent in December 2010. Mutual lenders also lost ground, dropping from 8.3 to 7.4 percent of the market.

Non-bank lenders such as Aussie, RAMS and Wizard Home Loans entered the market in the late 1990s and quickly gained popularity through lower interest rates and creative mortgage solutions. In 2003, non-bank lenders peaked with a market share of 15.2 percent.

Mortgage and Finance Association of Australia CEO Phil Naylor expressed concern that the new figures are worrying in terms of competition in the industry. Naylor said the drop in the non-banks’ market share was in part due to fallout from the GFC, which heavily impacted their funding abilities.

However the news is not all doom and gloom for non-banks, with FAST CEO Steve Kane predicting funding channels are showing steady signs of recovery.

Banks by market share Feb 2011:
NAB – $109.3 billion
ANZ – $111.5 billion
CBA – $171.4 billion
Westpac – $188.9 billion
ME Bank – $3.7 billion


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