Aussie Dream
New data shows people are diving into debt to attain the Aussie dream of owning their own home – $1.143 trillion of residential debt, in fact.
While interests rates are rising and borrowers are complaining, that isn’t stopping them taking on a massive debt burden, with outstanding residential lending increasing by 8.2%, or around $86 billion, in the 12 months to September 2010.
And where are all these borrowers going to get their loans? Commonwealth Bank, of course.
CBA currently holds 25.9% of the value of all outstanding mortgages in Australia – a level the bank has maintained for the past year – but is losing growth momentum in the short term, with the 1.0% mortgage book increase for the September quarter the smallest for the year.
‘Big two’ goliath Westpac has a mortgage book of $278 billion (just $18 billion shy of CBA’s), although growing much faster with the 12.1% current annual growth almost 1.5 times system, although the bank likewise experienced a slow down in the last quarter.
The small two of the big four also remain popular with borrowers.
The National Australia Bank mortgage book jumped 3.6% in the September quarter 2010, with the strong inflows potentially an indication of mortgage acquisition success post the broker channel purchase, and currently has $152 billion outstanding.
ANZ, with a mortgage book of $149 billion, is the smallest of the big four, and to put ANZ into perspective, the bank’s mortgage book is almost half that of that of CBA.
Crunching the numbers, here is the market share.
The big four banks currently hold 76.5% of all outstanding mortgage debt, with Tier 2 Australian banks 10.2%, non- banks including mutuals 8.8%, with foreign banks 4.6%.
Those borrowers complaining about above official cash rate increases by the big banks on mortgages, go to the US or Europe and get a loan for just a couple of per cent.
But just remember, you won’t actually be able to get a job to pay for this loan.
Figures in this article were referenced from the Australian Mortgage Report Q4, 2010, released this week and published quarterly.
For further information, contact CoreData on 02 9376 9600.
One Comment on “Aussie Dream”
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Steve says:
Not impressed with this article, heading and first part talks about homeowners borrowing more, then the rest of the time is spent promoting the major 4 banks (stating that all these borrowers will go to the CBA when the CBA is reported to ony hold 25.9% and not 100%) and then finishes off with a sarcastic remark. Who are you to say they won’t get a job? They would have a 9 out 10 chance of getting one in the USA. They may have around 10% unemployed but that means there is still 90% employed. Unless your a banker and then it may be harder.