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Small lenders overtake big banks in NSW mortgage market

Some smaller lenders have managed to increase their new mortgage volumes over the past 12 months, according to new research.

Official data from the NSW Land Registry Service has analysed newly originated mortgages in NSW for the year up until September 2022.

The data excluded all mortgages registered on land titles outside of NSW as well as any refinances.

Through this, the land registry was able to identify the top 25 lenders with the highest number of mortgage registrations over the last year, which were then ranked by year-on-year percentage change.

Only three banks (MyState, Suncorp and Great Southern) and three non-bank lenders (BNY Mellon, Bluestone and Pepper Money) recorded year-on-year percentage increases.

MyState Bank saw an increase of 96.4 per cent in new mortgage registrations (363 to 713), followed by BNY Mellon at a 41.3 per cent increase (460 to 650), Bluestone at 21.5 per cent (753 to 915), Suncorp at 14.2 per cent (2,532 to 2,892), Great Southern at 10.1 per cent (1,253 to 1,379) and finally Pepper Money at 2.1 per cent (2,321 to 2,370).

However, all of the big four banks (Commonwealth Bank, NAB, ANZ and Westpac) saw declines in year-on-year percentages in NSW new mortgage volumes, along with Macquarie Bank, ING and Bendigo & Adelaide Bank.

Head of data and insights for the NSW Land Registry Services, Jerry Goldfried, said the decline in new mortgage volumes among the larger banks echoed the downturn in the Sydney property market.

“The reason those banks experienced a decline in new mortgage volumes was because there were fewer active buyers in the market, compared to the property boom,” Mr Goldfried said.

“That can be seen in property price growth statistics, which show that Sydney’s median property price increased in the year to September 2021 but then fell in the year to September 2022.

“As a result, NSW Land Registry Services data show that new mortgage volumes in the New South Wales market as a whole fell 8.7 per cent in the year to September 2022.”

Commenting on the smaller lenders increasing their new mortgage volumes, Mr Goldfried stated that smaller institutions sometimes have an easier time seeing growth due to starting from a lower base.

“It’s also possible those institutions took certain strategic or marketing decisions that allowed them to do more new business, even as the market as a whole went backwards,” Mr Goldfried concluded.

[RELATED: NSW mortgage volumes falling]

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