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More Australians turning to non bank lenders - featured image
By Brett Warren

More Australians turning to non bank lenders

Home lending is on the improve according to data released by the Australian Bureau of Statistics (ABS) this week.

The number of approvals rose by a seasonally adjusted 1.1 per cent in May from April, showing the first improvement in six months. recession-australia-note-money-economy-squeeze-tighten-save-saving-budget-cut

The value of owner occupier financing drove the increase, offsetting another modest decline in the value of investor home loans.

In seasonally adjusted terms the ABS data showed a modest increase of 0.5 per cent in the total value of housing finance, with owner occupier loans increasing by 0.7 per cent and investor lending decreasing by 0.1 per cent.

However, Australians are turning to non-bank lenders in increasing numbers as the big banks banks tighten their lending criteria, according to the ABS finance figures.

RateCity analysis of the ABS data shows non-bank lenders have increased the value of new loans written by 3.60 per cent from the previous month and 14.11 per cent over the year, according to the seasonally adjusted figures for May.

In comparison, the value of new loans written by banks has increased by just 1.20 per cent annually. economy-property-market-grow-wealth-house-dream-first-home

RateCity spokesperson Sally Tindall said while the non-banks still only held 7.85 per cent of the market share, the move back to non-bank lenders was significant.

“Australians are starting to look for finance beyond the banks in steadily increasing numbers,” she said.

“Non-bank lenders are known for their low rates which can make a difference, particularly in a market where every cent counts.

“A year ago, non-banks had just 7.02 per cent of the market share. Today it is 7.85 per cent.

“This move, while small, will not be lost on the big banks. They don’t like giving up market ground for anyone,” she said.

Housing Finance May Final

About Brett Warren Brett Warren is National Director of Metropole Properties and uses his two decades of property investment experience to advise clients how to grow, protect and pass on their wealth through strategic property advice.
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