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ISCOVER
Staff Reporter
Despite lifting their rates independently of the Reserve Bank, Australia’s majors have increased their dominance in the home lending sector, new research has revealed.
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An analysis of the data from the Australian Bureau of Statistics for 2011 found banks boosted their market share by four per cent from 80 per cent in 2010 to 84 per cent last year.
Non-bank lenders now command just 11 per cent of the home loan market compared to 14 per cent the previous year – a fall of 15 per cent.
Wholesale lenders also had a tough year, losing more than 36 per cent of their business to hold just 2 per cent of the market.
Loan Market Group spokesperson Paul Smith said the results weren’t surprising as Australians are traditionally loyal to the major banks in times of economic uncertainty.
But he said more mortgage holders will consider switching to smaller lenders if the major banks continue to raise interest rates independently of the Reserve Bank of Australia.
“The current high cost of funding and overseas market conditions have prompted some banks to increase their variable home loan rates independently of interest rate decisions by the RBA,” Mr Smith said.
