When it comes to their share of the home loan market, Australia’s non-major lenders are still finding it hard to compete with the big four.
According to AFG’s Quarterly Competition Index, the collective market share of non-major lenders was 25.2% in June 2014. This is only a slight decrease from the 26.3% market share recorded a year ago in July 2013, but AFG general manager of sales and operations Mark Hewitt
said it belies the actual position of the non-major lenders.
“On the surface competition appears as strong as any time in the last 20 years. However the reality is that the major banks and their subsidiary brands continue to dominate and non-majors have made little or no headway in the past 12 months,” Hewitt said.
The big banks are still dominating despite the recent CUA National Mortgage Survey finding that 60% of respondents are concerned about major banks owning smaller subsidiaries, and a third of respondents saying they would feel “extremely annoyed or misguided” if they found out that their mortgage lender was owned by one of the big four.
On a positive note for the non-majors, the AFG Competition Index found that ME Bank recorded substantial increase in fixed rate mortgage share, from 1% in July 2013 to 10.3% in June 2014. Macquarie
Bank was popular among borrowers seeking refinancing, growing its share from 7.8% in July 2013 to 10% in June 2014. Bank of Queensland also fared well in the survey, growing their share of the first homebuyer market from 1.8% in January 2014 to 6.4% in June 2014.