Major banks lose home loan market share as FHBs dwindle: AFG

Major banks lose home loan market share as FHBs dwindle: AFG
Major banks lose home loan market share as FHBs dwindle: AFG

Non-major bank lenders accounted for more than a quarter of home loans arranged by AFG mortgage brokers in July.

The latest AFG Mortgage Index shows that non-major lenders have increased their collective share of home loans from 20.7% in March to 26.4% in July - their highest proportion of the market since AFG began reporting this rend in 2010.

‘This figure may seem unexceptional by international standards. But in Australia more than 90% of all home loans are with only four lenders and their subsidiaries," says AFG's head of operations, Mark Hewitt.

"To be seeing competition at this level is encouraging because it offers greater choice and helps keep rates down, both of which are good news for borrowers.

"Non-major lenders have grown market share among borrowers looking to refinance and investors, while maintaining their stronger market share among first home buyers."

However, the first-home buyer market slumped further with AFG reporting that just 11.6% of home loans arranged by its brokers over July were for this segment compared with 12.8% last month and 17.3% a year ago.

Investors accounted for 35.9% of home loans arranged in July with 35.2% being refinanced mortgages.

In total, AFG processed over $3.4 billion of mortgages over July, up 25% over July 2012.

"July is traditionally a quieter month for mortgages than August, and last month’s strong figure reflects reports of active property markets over the winter," says Hewitt.

"However, there is no sign of overheating in the mortgage data.

"The average new home loan last month was $401,000, the same figure as last December.

Loan to value ratios (LVR) remain steady on 68%.

Fixed home loans comprised 29% of all home loans processed by AFG – just below the all time high of 30.7% recorded in April 2013.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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