The only part of the lending market to show any worthwhile growth this year is the owner-occupier mortgage segment, and it is being dominated by a couple of the big banks and other ADIs.
According to the latest Reserve Bank lending data, lenders’ owner-occupier mortgage balances grew 0.4 per cent in October, compared with the previous month, and by 5.4 per cent over the 12 months to October.
Housing investor loan balances grew 0.1 per cent in October and were down 0.3 per cent over 12 months.
Overall, housing loan balances grew by 3.3 per cent over the 12 months to October.
Personal credit balances fell 12.7 per cent over 12 months and business credit balances grew just 1.4 per cent.
AFG chief executive David Bailey told shareholders at the company’s annual general meeting last week that the group had a record month in October, with lodgements of A$6.7 billion – up 16 per cent on October last year.
Bailey said first home buyers accounted for 23 per cent of activity and the major lenders wrote 65 per cent of first home buyer loans.
Overall, the majors now account for 60.1 per cent of the loans being arranged by AFG brokers – up from 52 per cent a year ago.
“Non-ADIs’ ability to compete and retain existing customers in the residential mortgage market is being negatively impacted by the very low funding pricing available to ADIs through the Reserve Bank’s term funding facility support package,” Bailey said.
APRA lending data released yesterday shows the big banks have not all benefited from these conditions.
While ANZ and Commonwealth Bank grew their mortgage books above system over the past 12 months, Westpac and NAB continue to go backwards.
Westpac’s mortgage book has shrunk by 1.1 per cent over the past year, as the bank has struggled with chronic system problems, and NAB’s book has shrunk by 0.5 per cent.
Some of the other ADIs that have reported above-system growth include Bank of China, Bendigo and Adelaide Bank, HSBC Bank Australia and Macquarie Bank.