Major lenders prove more dominant in mortgage market after APRA intervention

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Recent regulatory changes to Australia’s lending markets have allowed major lenders to become even more dominant in the mortgage industry.

Released yesterday, the latest Competition Index from mortgage aggregator AFG shows that over July and August, Australia’s major lenders accounted for 74% of the mortgage market, rebounding from June when their share slipped to 69%.

“With regulator enforced changes to investment and interest only lending, this is the most disruptive period we have seen in the market for some time,” AFG general manager of sales and operations Mark Hewitt said.

“Major lenders are capitalizing on this and using the size of their balance sheets to dominate their smaller competitors,” Hewitt said.

While the big banks remain the dominant players, the Competition Index shows there has been some fluctuation in the amount of market share they hold.

“Most of the investor changes were announced during July and are now starting to have an impact. Amongst the major lenders ANZ and CBA have both gained ground while Westpac has fallen back,” Hewitt said.

“For the non-majors the most dramatic change has been with ING who have fallen from 5.2% of investment lending in July to 1% last month.”

Over the 12 months to August 2015, ANZ was the biggest lender to investors accounting for 21.4% of lending, followed by the CBA with 17.4% and then Westpac with 10.8%.

For non-major lenders, AFG Home Loans had the largest investor market share with 5.6%, followed by the Bank of Queensland with 5.4% and then Macquarie with 4%.

For first home buyers, the CBA was the dominant player with a 19.2% market share, while Keystart was the most prominent non-major lender 7.3%. 

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