Non-bank lenders hold market share of mortgage and home loan lending

20 December 2013 - Which Way To Pay

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Home loans: Non-bank lenders secure increasing percentage of the mortgage market share

As the home loan market continues to set new records, smaller lenders are grabbing a bigger share of mortgage customers. Non-bank lenders increased their lending by twice the pace of banks in October as the home loan sector continues to rise. The value of new loans reached a record of almost $22 billion in October. But what does the term ''non-banks'' mean? This refers to specialist home loan lenders, building societies and credit unions. While smaller lenders made some headway, banks still accounted for 93 per cent of all loans in October.

The home loan market continues to set new records

"The latest housing finance figures add to the body of evidence showing a significant response from the housing market to the RBA's stimulatory policy stance," Deutsche Bank chief economist Adam Boyton said "last week, home loan and mortgage approvals for owner-occupiers rose by 1 per cent in October to 52,305."

Home loan approvals for owner-occupiers rose by 1 per cent in October to 52,305

In a submission to the government, the Customer Owned Banking Association, said the big banks' dominance should be looked at. "Our four major banks are among the world's 20 largest banks. Around 50 per cent of all Australian household deposits are held by just two of the majors - CBA and Westpac. The majors have increased market share and market power significantly," the submission says. Many first home buyers are being priced out of the market as house prices rise.



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