Non-major market share surges amid refinancing trend

by Miklos Bolza19 Dec 2016
An increasing number of mortgage holders are leaving the country’s major lenders, according to new figures from the Australian Finance Group (AFG).
The latest AFG Competition Index shows that overall mortgage sales for the majors and their subsidiaries has decreased by 8.1% over the last quarter and is now sitting at 64.1% of the market.
This is a post-GFC low, said Mark Hewitt, general manager of sales and operations, in a trend that has been driven mostly by refinancers.
“The non-majors lifted their share of the refinancing market to 43.2% across the last quarter,” he said. “Suncorp with an increase of 3.3% and AMP with a lift of 2.1% led the way with refinancers, largely at the expense of the Westpac stable.”
Westpac and its other brands such as Bank of Melbourne, Bank SA and St George, lost a combined 8.4% of its total market share for the quarter.
Additionally, the market share for investor lending at the major banks also dropped by 7% during the same time period.
“In the past week many lenders have been increasing fixed and variable interest rates. They have been targeting areas such as investment loans and this is often a trigger to encourage consumers to shop around.”
Due to the growing acceptance by consumers and brokers to look for other options, AFG has expanded its panel significantly over the past couple of years to provide additional choice, Hewitt told Australian Broker.
This trend would almost certainly continue into 2017, he added.
“I think some of the majors have looked at this year and are reasonably satisfied where they are at the moment,” he said. “That creates the opportunity for growth to come from the non-majors who are keen to write business and grow their market. It’s all about competition and there’s more competition than there’s ever been.”
In November, the AFG index revealed that the non-majors with the largest market share for mortgages in general were as follows:
  • AFG Home Loans (8.23%)
  • Suncorp (4.80%)
  • ING (4.05%)
  • AMP (3.34%)
  • ME (2.99%)
  • Macquarie (2.13%)
  • Liberty (2.27%)
  • Bank Australia (1.83%)
Other non-majors were found to have less than 1% market share each.
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Big four market share on the decline