The government’s focus on ‘competition’ appears to have done little to help the non-banks.
The latest data from the Australian Bureau of Statistics [ABS] showed the nation’s smaller lenders continue to lose ground on the majors.
In fact, Australia’s banks accounted for 90.2 per cent of all housing loans transacted in February 2011 – the largest share since last September 2010. Of that 90 per cent, the big 4 banks accounted for approximately 80 per cent.
At the same time, non-bank lenders have experienced their worst market share since they joined the mortgage market in 1995, accounting for just 1.9 per cent of all new housing loans written.
On the basis of this trend, non-bank lenders are likely to struggle when exit fees are totally banned in July 2011. So how can it be good for consumers when the most competitive lenders are forced out of the market?
Remember non-bank lenders are synonymous with bringing down the margin on home loans in Australia, making them more affordable for all Australians. Unfortunately without competition Australians could end up paying more for their mortgages.
This at a time when 25% of mortgage holders said they would not be able to make their repayments if rates lifted by 50 basis points before the end of the year. [see our finance article for more and to discover how our new debt negotiation service can help you get rid of your bad debts and get you back on track]
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