The proportion of mortgages being written by brokers to the major banks has fallen by 6.55 per cent in just one year, new figures from a major aggregator have revealed.
Data collected through AFG’s latest Competition Index has revealed that the major banks and their subsidiaries (ANZ, CBA, Bankwest, NAB, Westpac, Bank of Melbourne, Bank SA, and St.George Bank) saw 65.25 per cent of all mortgages written to them through the broker channel in the quarter to February 2017.
While this figure is up from the low of 64.09 per cent in the quarter to December 2016, it is markedly down from the comparative period last year, when the majors accounted for 71.8 per cent of all mortgages written by the third-party channel.
As well as an overall drop in market share, the major banks saw a substantial drop in the share of fixed rate mortgages being written to them, with the most recent quarterly figure coming in at 56.66 per cent, down from 64.98 per cent on the quarter ending January 2017, and a whopping 12 per cent down on the comparative period in 2016.
Notably, refinancing through the major lenders hit a record low for the quarter ending February 2017, dropping to just 54.93 per cent of market share, while the proportion of investor mortgages being written to the major banks also fell to a record low in the quarter ending February 2017, to 67.56 per cent of market share. This is around 7 per cent less than the same period last year.
According to the aggregator, the major lenders have “fallen out of favour” with consumers, while the non-major lenders continue to increase their market share.
Fixed-rate mortgages with non-major lenders at all time high
Indeed, the non-majors saw their market share increase to 34.75 per cent, the highest level this calendar year and the highest quarterly figure since the global financial crisis.
The non-majors performed particularly strongly when it came to fixed-rate mortgages, with AFG finding that they held 43.45 per cent of market share for these types of home loans in the quarter ending February 2017, the highest figure yet recorded for this sector and a massive 8 per cent more than in the quarter ending January 2017.
ME Bank and ING DIRECT had particularly strong performance in their fixed rate home loan offerings, with the two banks seeing a lift of 2.04 per cent (to 5.13 per cent of market share) and 4.66 per cent (to 9.13 per cent of market share) between the quarter ending January 2017 and the quarter ending February 2017, respectively.
The non-major lenders also had a strong quarter for refinancing, taking 45.07 per cent of the market share, their highest quarterly figure for this type of loan.
Speaking of the figures, Mark Hewitt, AFG’s general manager for sales and operations, said: “The non-majors have continued to take market share from the majors this quarter, particularly among those seeking to refinance.”
He added that first home buyers were also increasingly “drawn towards to the non-majors”, with this group seeing a 2 per cent gain in market share (on the quarter ending January 2017) to 31.79 per cent.
“Recent changes made by the Victorian state government to exempt first home buyers from stamp duty if they are purchasing a property for less than $600,000 will make this segment of the market one to watch,” Mr Hewitt added.