Loan Market Group’s executive chairman Sam White said 2010 would herald the return of non-bank lenders to the market.
During a press speech yesterday, Mr White said the decision by three of the majors to raise interest rates above the Reserve Bank had left a bad taste in the mouth of borrowers, which would open the flood gates for the second tier lenders to make a grab for extra market share in 2010.
“The aggregate movement, rather than individual rate rises had a huge effect on borrowers,” Mr White said.
Mr White also said that while big banks have had significant market share, they have also been under cost pressures, dealing with corporate loan losses and the rolling over of their funding books.
Due to these pressures, Mr White said he foresees “the emergence of the smaller lender” in 2010.
“Australians will need to look to talking to mortgage brokers to make sure they are getting the best possible deal in the marketplace,” he said.
“The issues I see for 2010, compared with two to three years ago, are the need for bigger deposits for people entering the market for the first time, as well as a tighter examination of borrowers’ loan repayment abilities.”
However, Mr White considered these issues to be positive, as they would give the lending sector more integrity and ultimately strengthen the economy.
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