Non-major mortgage lenders are experiencing record-high market share, according to the latest AFG Index.
AFG’s loan writers reveal that 42.3 per cent of homebuyers are lodging their mortgages with a non-major lender, a small increase of 0.9 per cent from the previous quarter.
Macquarie experienced the highest growth among the non-major lenders increasing to 9.76 per cent market share of AFG business from 5.3 per cent the previous year.
ING started at a 4.15 per cent share in July 2018, increased to 5.7 per cent in November 2018 and dropped back to 4 per cent at the end of the quarter.
AFG is reporting signs of growth in the mortgage market with $13 billion in lodgements in the June quarter, up 12 per cent from the previous quarter. However, the overall market is still weak, as this is an 11 per cent decrease from the same time last year.
AFG chief executive officer David Bailey says: “There are tentative signs of increased activity with both lodgement numbers and volumes up significantly for the quarter. It will be important to see the impact of recent moves by the RBA but we remain cautiously optimistic.”
The major lenders’ market share dropped from its peak of 60.4 per cent in August 2018 to 55.9 per cent in the June quarter.
Commonwealth Bank experienced the highest growth among the big four banks, jumping from 15.3 per cent in the previous year to 17.7 per cent. This was followed by NAB reaching 7.3 per cent.
ANZ suffered a steep decline from 12.7 per cent in the previous year to 8.5 per cent in the June quarter.
Non-major lenders have 44.5 per cent of market share for interest only loans, 41.8 per cent of market share for principle and interest and 34.6 per cent for first home buyers.
The percentage of interest only mortgages lodged has remained relatively stable, fluctuating between 19 per cent and now to 20 per cent in the last 12 months.
This is the same for the percentage of principle and interest mortgages lodged, shifting between 81 per cent and to the latest figure of 80 per cent.
Bailey says: “With investor lending up, it is interesting to also note the major banks’ responses to the recent cash rate reductions where investor loan rates have seen larger rate cuts passed on to customers. With those APRA-related restrictions now lifted, this could signal a new battleground for customers.”
The average mortgage value grew to an all-time high of $515,000. This is an increase of $10,000 from the previous quarter. South Australia is the only state to record a drop, now sitting at $402,473.