Research confirms big banks dominate mortgage market

cent/insurance/mortgage/commonwealth-bank/national-australia-bank/westpac/ACCC/ANZ/

5 November 2009
| By Caroline Munro |

CoreData research has confirmed that the major banks are dominating the mortgage market, with Westpac and Commonwealth Bank holding 48.9 per cent of all outstanding residential lending by value, up from 33.1 per cent before the mergers.

And CoreData’s Mortgage Market Share Ranking research revealed that the ‘big two’ are continuing to gain market share.

“The big two will soon control more than half of all outstanding Australian mortgages by value, as market share continues to accelerate reaching 48.9 per cent in September 2009 — compared with 45 per cent at the start of 2009”, said Tony Crossley, CoreData-brandmanagement head of mortgages and insurance.

The research places National Australia Bank in third spot with 12.8 per cent of market share, while ANZ is fourth with 12.5 per cent. Market share decreases dramatically from then on — the fifth biggest bank by market share, ING Direct, holds just 3.3 per cent.

The research does not delve into the impact of the government guarantee on the mortgage market, which analysts have pointed to as a precursor to the big banks’ dominance. Rather, it points to bank mergers.

CoreData stated that in August 2008, the big four banks held 59.1 per cent of all mortgages, with Tier 2 Australian banks 19.7 per cent, non-bank lenders (including mutuals) 13.2 per cent and foreign banks 8.1 per cent. Following the Westpac takeover of St George and the Commonwealth Bank takeover of Bankwest, the big four now hold 74.3 per cent of mortgages by value, with Tier 2 Australian banks 10.8 per cent, non-bank lenders 10.1 per cent and foreign banks 4.8 per cent.

“Concentration in the residential mortgage market by the big four has actually accelerated since these mergers were approved by the ACCC last year,” said Crossley.

“The particularly difficult environment faced by smaller banks at the time, however, meant that nobody could assume they would continue to compete as vigorously in retail banking as they had.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

3 weeks 1 day ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 6 days ago

One licensee has lost 27 advisers in the past week, now sitting at zero, according to the latest Wealth Data figures....

3 weeks 1 day ago

TOP PERFORMING FUNDS