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By: Staff Reporter
Australia’s major banks will ration their lending to home buyers in the months ahead, a new report has found.
According to a joint mortgage industry report by JP Morgan and Fujitsu Australia, the majors will sit on their current housing portfolios and optimise profitability by cherry-picking customers rather than seeking additional market share gains.
The big four dominated the mortgage market throughout the global financial crisis, with their combined market share peaking at 92.5 per cent last year, according to APRA data.
But despite the banks’ extreme market share growth, Fujitsu executive director Martin North said lenders were starting to pull back their lending on the back of increases in wholesale funding requirements.
Mr North said banks would ration credit by enforcing risk-based pricing and pursuing lending opportunities where there is low risk.
“We have a fundamental issue about housing and affordability and the supply of property, and I’m not sure that there is a will or intent to deal with this very thorny, difficult strategic issue,” he said.
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