A new report shows that the Big Four banks continue to dominate the mortgage market in Australia.
The latest JP Mortgage/Fujitsu report says that despite growth in the mortgage markets has been slow, the Big Four are holding much of market.
The Australian Mortgage Industry Report also says that mortgage stress will increase, and estimates that the number of households suffering mortgage stress will rise from 800,000 to one million this year. Defined as a household paying more than 35 per cent of their income on loan repayments, mortgage stress is predicted to be occurring in greater numbers.
"System housing growth has contracted from a peak three month annualised growth rate of 23.4 per cent in November 2003 to 6.0 per cent in August 2008," JPMorgan's banking analyst Brian Johnson said. "The big banks have a competitive advantage - by that I mean AA rated banks - because securitisation markets are still open, but they are open at rates that are prohibitively above the rate you would use to write the loan." The report found the big four banks - National Australia Bank, ANZ, Westpac and Commonwealth, enjoy around 65 to 70 per cent of the mortgage market, with the smaller banks taking the banking sectors's total share to 90 per cent. Compiled before the RBA made the one per cent cut in official rates, the report was released one day before the RBA decision.
The number of people behind on their mortgage repayments in Australia is currently at about 1 per cent - which is lower than the US, which has 6 per cent, and the UK, at 2.5 per cent.
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