The mortgage industry faces more than half a decade without competition, according to AFG’s managing director Brett McKeon.
Mr McKeon said recent consolidation within the banking sector and the withdrawal of foreign banks had stifled competition and would continue to do so well into the future.
The aggregator head is calling on the federal government to introduce an array of initiatives to reinvigorate competition.
“The first thing they should do is sort out the mining tax,” Mr Mckeon told The Adviser.
"Right now we’re suffering from a failure of leadership. All the data suggests that ordinary Australians are worried about rate rises. They are in lock down mode, saving their money, instead of spending it, which would be healthier for the economy. The politicians in Canberra are responding to this fear with populist claptrap about inquiries and regulation, but the horse has already bolted and unless something is done it will take half a decade to see proper competition return.”
According to Mr McKeon, a lack of competition will not only hurt consumers but also the broker proposition.
Yesterday, AFG reported its worst October mortgage sales for four years.
The aggregator arranged just $2.2 billion of mortgages in October – down 17.5 per cent in volume compared to October 2009 and 4.3 per cent lower than last month.
NSW was the worst affected state, where mortgage sales fell 13.1 per cent month on month. Victoria and WA saw falls of 3.9 per cent and 4.3 per cent respectively, while QLD and SA bucked the trend, with rises of 6.4 per cent and 5 per cent, although on relatively low, September figures.
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