Australia's big five banks are slowly easing shareholder fears by increasing their competitive power away from non-bank lenders in the home loan market, according to a new report. It is not all good news however, with the same report outlining how current economic conditions are leading to concerns over the vulnerability of the home loan market and the possibility of an increase in home loan defaults.
The report, State of Play - the Australian mortgage market, includes the country's most comprehensive data on market share in the home loan market. It is produced by research group Infochoice and industry newsletter The Sheet.
It says the big five banks are picking up 80 per cent of all new
mortgages being written in Australia and have lifted their market share
of home loans to about 60 per cent. The report says that the increase
in the big banks' market share has been accompanied by a fattening of
margins.
The report says banks have raised interest rates on home loans despite there being no change in the cost of funding for banks since February.
And it also warns about the impact that higher interest rates would have on Australia, saying that research by a think tank at the University of Newcastle shows that the average new mortgage is now about $225,000 and an average monthly repayment is a third of household income.
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