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Jessica Darnbrough
Competitive pricing has helped the big four steal even more market share from Australia’s non-major lenders.
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According to AFG’s quarterly Competition Index, the overall share of loans processed by the company for the major lenders increased from 75.7 per cent in September 2012 to 79.4 per cent last month.
Driving the increase was the major lenders’ success in out-pricing their much smaller rivals in fixed rate loans – a product category that has soared in popularity in recent months.
Major lenders accounted for 76.4 per cent of all fixed rate loans in September last year; last month that share had risen to 84.5 per cent.
Particularly strong performers were ANZ, which saw its fixed rate loan share rise from 8.7 per cent to 15.1 per cent over the period, and the Commonwealth Bank, which grew from 18.0 per cent to 21.1 per cent.
AFG’s general manager of sales and operations, Mark Hewitt, said the scale of the major lenders gives them an inherent advantage when sourcing funding.
“As the figures show, they’ve been able to leverage that advantage to the point that they now account for four out of every five new home loans overall. While this is good news for the majors, it’s bad news for consumers who are deprived of the more competitive pricing they would enjoy if we had the same levels of competition seen in other developed economies,” he said.
Major lenders have made especially deep inroads into the first home buyer market, where non-majors – some of which, such as Keystart, specifically target this group – have traditionally been strongest.
The majors had 74.4 per cent of the first home buyer market in September, a share which had grown to 77.9 per cent by March 2013.
