Get ready to rumble

Australian Prudential Regulation Authority (or APRA) data suggest that the Big 4 Australian banks had 100% market share of new mortgages in July 2009. Their market share in September 2007 was just 65%! This is a huge change in a relatively short amount of time. Financial commentators suggest that the government needs to do something to assist funding the smaller banks. I agree. However, it will take years of government intervention and hard work by smaller lenders to claw back some of this market share. The problem is; once you give a bank something as valuable as market share, they will hang onto it for dear life! They’ll flight the smaller lenders tooth and nail and they’ll probably win. Therefore, government intervention is necessary but it’s not a solution – at least not in the short to medium term. Prepare yourself for less competition because it’s here to stay. I don’t think we’ve seen the full effects yet. One solution could be to find yourself a good debt advisor. They’ll know the lay of the land and can ensure you won’t be a victim of no competition.