Big four banks’ collective market share drops in year to May: RateCity

Big four banks’ collective market share drops in year to May: RateCity
Big four banks’ collective market share drops in year to May: RateCity

Home loan borrowers are increasingly heading to smaller banks, moving market share away from the major banks over the 12 months to May 2014, according to RateCity data.

They have recorded a 0.37% market share drop for ANZ, Commonwealth Bank, NAB and Westpac collectively, based on APRA data.

With CBA, NAB and Westpac announcing cuts to some of their fixed rates, CEO of RateCity, Alex Parsons, says that they’re competing aggressively to bring back new borrowers.

“The latest Salvo in the competition war, this is the first time we’ve seen the big banks move rates under the 5% mark for five-year fixed term home loans,” said Parsons.

“While there has been plenty of action as low as 3.99% on one- and two-year terms, the five year category has not historically seen this level of competition.”

Of course, the major banks are still the dominant players in the home loans market – making up an incredible 84.6%.

Parsons says that despite this, consumers’ brand loyalty is reducing and they’re more keen to shop around. 

“People are getting smarter with their money and, as cost of living pressures bite, realising that paying a higher rate is a waste of money,” he said.

“This latest round of rate cutting is evidence that the majors are starting to feel the pinch of the shift in the market and are having to meet the market. The real winners from this competition will be consumers who will be able to materially reduce their costs of borrowing if they understand and compare the different offerings in the market.”

Jennifer Duke

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

Tags: 
Home Loans

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