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Majors saw no net mortgage growth in NSW in October

Despite October 2020 recording the highest level of mortgage activity this year, the major banks saw zero net growth in volume, according to new data.

The October 2020 edition of the NSW Land Registry Services’s (NSW LRS) Mortgage Share Insights: Residential Mortgage Activity report, found that last month recorded the highest level of mortgage activity in the last 12 months.

The report pulls all new and refinanced mortgages held against residential properties registered on the NSW Land Title Registry. 

In NSW, 23,084 mortgages were registered on titles in October (both new and newly refinanced), the largest number this year and up 13.3 per cent, compared with the same time last year (when around 20,000 mortgages were registered).

While the big four banks continue to receive the largest proportion of mortgages in NSW (around 66 per cent of mortgages registered in the state), as an overall segment, they experienced zero net mortgage growth last month in terms of total volumes – with around the same proportion being removed due to refinance activity.

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This ends the trend that started in April 2020, when the majors were seeing more loans coming onto their books than moving off. Prior to the pandemic, borrowers had been refinancing out of the big four banks in their droves, but this had reversed when the pandemic began and many banks began offering competitive cash back offers.

Overall, refinance volumes continue to remain significantly above pre-COVID-19 levels, with a total of just over 8,800 loans. This is up by around 1,000 loans on 2019 levels.

As a segment, non-major domestic banks (“other domestic banks”) were found to be growing their NSW residential market share (as were customer-owned banks). For example, other domestic banks gained 1.9 mortgages to every one lost via refinancing in October 2020, the report shows.

Indeed, NSW LRS noted that major banks lost 1.6 mortgages to every loan gained from other domestic banks.

Non-banks lost 2.0 loans for every mortgage “won”, while foreign banks lost 1.7 loans.

Director of analytics and insights at NSW Land Registry Services, Jerry Goldfried, commented: “As a segment, other domestic banks have largely returned to pre-COVID-19 levels and are the only segment to record a positive net refinance position in October 2020.” 

The stats follow on from the major banks’ annual results, which show that both National Australia Bank (NAB) and Westpac reported contractions in their mortgage portfolios, decreasing by $700 million each over September. While the mortgage portfolios of ANZ and the Commonwealth Bank of Australia posted a combined total growth of around $5.3 billion over September, driven by an increase in owner-occupied lending.

[Related: Major banks split on mortgage portfolio growth]

Majors saw no net mortgage growth in NSW in October
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