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The major bank has reported a lift in new housing lending in September following three months of falls.
The Commonwealth Bank of Australia (CBA) has reported a lift in new housing lending in the September 2023 – excluding refinancing – following three consecutive months of declines in this category. According to the major bank, changes in market shares “could have played a role” in the recent differences between system growth and CBA.
However, the major bank recorded a further drop in the share of new housing lending at fixed rates during the month, with less than 2 per cent of new housing loans being fixed rates. CBA confirmed that this means that “virtually all new lending at CBA is now at variable rates”.
The update followed the most recent Australian Prudential Regulation Authority (APRA) statistics on authorised deposit-taking institutions (ADIs) that showed another month of losses for the major bank.
CBA’s mortgage portfolio suffered a $1.4 billion drop in August, down to $543 billion from the $544 billion recorded in July 2023.
Additionally, CBA’s owner-occupier loan book dropped from $364 billion in July to $362 in August, while its investor loan book saw only a marginal decrease, remaining at $180 billion. CBA was the only major bank to record losses in its mortgage portfolio for the month.
However, CBA maintained its leading position in mortgage market share at 25.7 per cent, followed by Westpac at 21.3 per cent, NAB at 15 per cent, and ANZ at 13.4 per cent.
The next mortgage war may be upon us
During a webinar discussing the lending market on 24 October, head of Trial Homes, Nick Young, noted that while the mortgage wars are over, there’s potential for CBA to spark up competition amid a drop in its market share.
This year saw banks battle for refinancing through cashback incentive offers in order to attract borrowers away from their current lenders as refinancing spiked.
Mr Young cautioned that should CBA decide to regain market share, competition could be reignited, although cashback offers may not be the method of choice due to the associated losses.
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“I think they’re probably dead and buried for a while,” Mr Young said.
Competitive interest rates are expected to be the banks’ next move to regain market share, led by CBA.
At the time of writing, the only major bank to still offer cashback deals is ANZ, although they have reduced incentives from 26 August 2023.
[RELATED: Rate cuts may trigger the next mortgage war, warns analyst]
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