Big Banks lose home loan market share to Non-Bank Lenders

The major banks have lost market share to non lenders over the past 12 months in the competitive home lending market.

With increased competition from non-bank lenders and the impact of rising interest rates the major banks housing finance commitments are the lowest level in more than a year.

The banks provided $4.35 billion for housing loans during April, down from $5.83 billion the previous month, based on non-seasonally adjusted Bureau of Statistics figures.

The slump reduced the major bank’s share of the home lending market to 83.1 percent, down from 83.8 percent in the previous month and 84.2 percent a year ago.

Among the non-bank lenders, permanent building societies lent $155 million during April, down from $225 in the previous month; mortgage managers lent $492 million, down from $587 million: and other lenders lent $728 million, down from $896 million.

The turn in the interest rate cycle has also led to a shift away from fixed interest loans. Fixed interest loans in April comprised 7.9 percent of all loans, down from 8.3 percent in the previous month.