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While brokers wrote 11.4 per cent more refinancing business in the June quarter than they did in the March quarter, it was the regional banks that grew their refinancing business the most, according to the Market Intelligence Strategy Centre’s (MISC’s) latest quarterly report.
Despite the big four’s offering low rates and cash incentives in a bitter price war, their refinancing business only rose by 10.5 per cent, compared with the 13.76 per cent increase seen by the regional banks, such as the Westpac-owned St George and BankSA and Commonwealth Bank-owned Bankwest.
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Aggressive marketing strategies, the abolition of exit fees and the offer of cash rebates has stirred up refinancing activity in the market, according to the report, but it was not this that drove the smaller banks’ victory.
“While the odd regional bank and mortgage manager or boutique has embraced the rebate process, this strategy has not been universal among them, even though they appear to have disproportionately benefited from the major banks’ impact on the entire channel,” the MISC report found.
According to news outlet Adelaide now, a recent study of Australia’s mortgage industry has shown that home lending growth had eased during the past year due to interest rates concerns and consumer caution.
Martin North, executive director of Fujitsu’s industry group, believes a combination of first home buyers’ inability to find affordable properties and investors’ reluctance to buy due to a lack of property price rises has largely contributed to a flourishing of refinancing activity.
Mr North said banks that rely largely on this type of lending for growth would experience lower profitability.
