Australia's leading lenders and mortgage brokers are predicting a recovery in the nation's overall lending growth in 2020, a trend established in the second half of last year.
This was one of the main themes to emerge from a roundtable discussion by representatives from some of the nation's biggest lenders and broker groups, along with Deloitte partners.
"The total outstanding stock of mortgages in calendar year 2019 grew to $1.82 trillion overall, which was an annualised increase of 3.7 per cent to 30 June 2019," said Deloitte partner James Hickey.
"This was the lowest rate of mortgage lending growth in Australia in the past decade."
Although the growth rate is relatively low, the roundtable attendees suggested the mix would change.
"That 2 to 3 per cent growth won't be split evenly across the market, a point made by several roundtable participants," said Deloitte Financial Services partner Heather Baister in an interview with Banking Day.
"It's much easier to show double digit growth if you are coming from a low base, much harder for large banks."
Baister cited Macquarie's latest results, which were 11 per cent up on their previous quarter.
"They've done that through a combination of investments in technology, consistent application of policy, fast turnarounds, a real focus on the broker market," she said.
"Although the Deloitte roundtable group predicts a relatively modest recovery in 2020 in terms of settlement volumes overall, the competitiveness between lenders will mean outcomes at a lender level is likely to vary noticeably."
"The composition [of outstanding mortgage volumes] by customer segment, channel and by individual lender within that very macro number is likely to be quite different [in 2020].
"For the market to sustainably grow, we need to be building more houses and customers will need more income and confidence," said NAB's general manager, home lending, Paul Riley.
Nathan Walsh, founder of neobank Athena, added to those comments: "As a specialised digital lender, we are seeing a shift in channel preference from intermediary to digital channels. Athena has written more than a billion dollars of home loans over our first 12 months since launch."
These shifts are likely to come at the expense of the major banks. Lisa Nelson, Equifax, said Comprehensive Credit Reporting data across all four big banks from February 2018 to September 2019 shows they dropped about 4 per cent market share in total.
"Fintechs are on the rise, but that's still nascent. It's the internationals and regionals that have really gained market share, with regionals up 1.5 per cent and internationals up nearly 3 per cent," Nelson said.
The roundtable attendees also debated the customer segments with the best prospects for growth in settlements in 2020, as well as funding and pricing issues, regulatory focus areas, distribution requirements and innovation.
"If productivity is not going to boost wages growth, it's really hard to see first home buyers make headway against others in the market," said Michael Thomas, Deloitte Access Economics financial services lead.
"Housing construction is headed down rapidly, at the same time that house prices are headed up rapidly. Those seesawing conditions - prices up, volumes down - suggests housing construction has rather further to fall.
"However, Australia's population growth is too strong for falls to be sustained much beyond 2020, which is likely to be the low point."
Deloitte's James Hickey said: "Interestingly, only 5 per cent of the participants believe that there will be customer inertia [over open data, and therefore open banking], which means that this representative group of Australia's lenders believe that giving customers more information, a level playing field, and allowing some innovative fintechs and established lenders to supply innovative offerings will benefit consumers in 2020."