The non-bank sector made $142.8 billion of loans and advances in November, according to Reserve Bank of Australia data.
That is 18.6 per cent less than the $175.4 billion result posted in August 2008, which was a high point for Australian non-bank lending.
It is also the worst November result since 2005, when non-banks made $138.1 billion of loans.
That was followed by three years of growth – by 9.3 per cent to $150.9 billion in 2006, by 10.3 per cent to $166.4 billion in 2007 and by 4.8 per cent to $174.5 billion in 2008.
During the 12 months to November 2009, non-bank lending fell by 9.5 per cent to $158.0 billion after the GFC was triggered in September 2008 by the collapse of Lehman Brothers.
Two years of growth then followed – by 2.4 per cent to $161.8 billion in 2010 and by 0.4 per cent to $162.5 billion in 2011.
There have since been three years of losses – by 4.8 per cent to $154.8 billion in 2012, by 5.1 per cent to $146.9 billion in 2013 and now by another 2.8 per cent in the latest result.
By contrast, bank lending increased by 8.2 per cent to $2.0 trillion during the 12 months to November 2014.
Australian First Mortgage managing director David White told Mortgage Business that the fall in non-bank volumes since the GFC might be due to continuing industry consolidation.
Mr White said that although rates, products and services have recovered from the GFC, there are now fewer non-bank lenders, which has probably translated into fewer non-bank loans.
Iden Group director Barrie Gaubert said the decline in non-bank volumes over the past year or two can partly be explained by intense competition in the mortgage market.
“The mid-tier players are being far more competitive than they have been in the past,” he said.
Mr Gaubert said that Iden had recently lost out on a deal when its own “very good rate” was trumped by a big four bank that offered an unadvertised three-year rate of 4.49 per cent.
“We’re the mouse in the room, and if the elephant wants to sit down, we get out of the way,” he told Mortgage Business.
“Our product can be unbelievably good, but sometimes people don’t appreciate that difference, so it’s our job to give them education.”