Invest
Nation turns back on bank home loans
Aussies turned in droves to the non-bank sector for home loans last year, as banks tightened their credit offerings and customer satisfaction fell throughout the royal commission.

Nation turns back on bank home loans
Aussies turned in droves to the non-bank sector for home loans last year, as banks tightened their credit offerings and customer satisfaction fell throughout the royal commission.

According to Standard & Poor’s (S&P) latest report, the non-bank sector issued 60 per cent of home loans in 2018, skyrocketing from 31 per cent the year prior.
In its Structured Finance Outlook 2019 report, the ratings agency stated that it expected alternative lenders to continue to “dominate” the home loan sector in 2019, as APRA’s strong lending standards continue to take a toll on authorised deposit-taking institutions (ADIs).
“Many Australian bank issuers remained on the sidelines in the past year, leaving the non-bank sector to pick up the slack,” S&P noted.
“Even as home-lending growth slowed to around 5 per cent, the non-banks were able to achieve lending growth rates more than double their banking peers by capitalising on a tightening of lending standards in the [ADI] sector.”
However, the ratings agency said that although the non-bank sector’s proportion of lending has significantly increased, the residential segment is remaining less than 5 per cent of total mortgages.
It suggested that although APRA has lifted its 30 per cent cap on interest-only lending, the move is unlikely to signal an increase in investor home loan adoption over the short term as many lenders will continue to strengthen their practices ahead of the release of the royal commission’s final report.
“Many lenders are applying greater scrutiny to expenses in their debt-serviceability assessments, and this is tightening many borrowers’ access to finance,” S&P stated.
“Lending standards are likely to remain more stringent in the wake of the publication of the final report on the royal commission findings, which is due to be released in February 2019.”
Customer satisfaction low during the royal commission
S&P’s findings reflect data released by Roy Morgan in the midst of the royal commission, which found that satisfaction with banks overall declined.
The research house’s August Customer Satisfaction-Consumer Banking report found that the big four banks each experienced drops in customer satisfaction, with NAB down 3.9 percentage points, Westpac down 3.6, ANZ down 2.7 and CBA down 2.5.
This has sparked millions of Aussies to look towards new providers in the non-major segment.

Property
Labor’s ‘Help to Buy’ scheme not without its risks
With Anthony Albanese sworn in as Australia’s 31st PM, home buyers are excited at the prospect of accessing the new ‘Help to Buy’ scheme, but a property expert has warned that the risks may be g...Read more

Property
Australia's housing market is entering a ‘broad-based correction phase’
Westpac believes the housing market downturn is now underway. ...Read more

Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more

Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more

Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more

Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more

Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more

Property
HSBC forecasts 2023 house price decline of up to 10%
The firm had previously predicted a modest rise for house prices next year. ...Read more

Wrapping up an eventful 2021
Listen now

What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now

Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now

Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now

Property
Labor’s ‘Help to Buy’ scheme not without its risks
With Anthony Albanese sworn in as Australia’s 31st PM, home buyers are excited at the prospect of accessing the new ‘Help to Buy’ scheme, but a property expert has warned that the risks may be g...Read more

Property
Australia's housing market is entering a ‘broad-based correction phase’
Westpac believes the housing market downturn is now underway. ...Read more

Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more

Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more

Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more

Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more

Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more

Property
HSBC forecasts 2023 house price decline of up to 10%
The firm had previously predicted a modest rise for house prices next year. ...Read more