Borrowers refinancing have allowed the major banks to maintain their market share dominance, the aggregator has revealed.
The latest AFG Index released by the Australian Finance Group (AFG) has revealed that the market share of Australia’s big four banks rose to 61.7 per cent during the third quarter of the 2024 financial year.
Meanwhile, the non-major banks recorded a slight decrease in market share, falling from 39.8 per cent to 38.3 per cent.
According to AFG, the rise in market share for this quarter was largely due to borrowers refinancing and upgrading their home loans, while only first home buyers seemed to have more favour towards the non-major lenders.
The increasing concentration of major lenders, margins, and pricing remains challenging for non-major lenders, despite the crucial role brokers continue to play in the market and the lower cost of customer acquisition model the channel represents for lenders, AFG stated in the index.
For all other product types, the major banks took the majority of market share in investment volume at 60.6 per cent, first home buyer volume at 70.6 per cent, refinance volume at 58.5 per cent, upgrader at 61.7 per cent, interest only at 63.7 per cent, and principal and interest volume at 61.3 per cent.
As mentioned previously, first home buyers had an increasing preference for non-major banks, with volumes increasing to 29.4 per cent during this quarter from 28.1 per cent.
This was also the only product type that recorded a quarter-on-quarter decrease for the major banks, down from 71.9 per cent.
Record-high broker market share
This data came as the latest statistics released by the Mortgage & Finance Association of Australia (MFAA) revealed that mortgage broker market share reached a record high of 71.8 per cent during the December quarter of 2023.
AFG chief executive David Bailey commented: “Australians know their broker is there to help them and the fact that brokers have a legislated duty to put their customers’ best interests first, makes them the clear channel of choice.
“As bank branch closures continue across the country, brokers provide a vital distribution service.
“Mortgage brokers continue to be the channel that delivers choice and convenience for Australian home buyers.
“In a high interest rate environment with cost-of-living pressures impacting us all, having a trusted broker onside to guide home buyers through their options and help them secure the right finance to suit their individual needs continues to be vital.”
