Industry Analysis & Industry Trends
Mortgage lenders help consumers to realise the dream of owning a home. The industry was not immune to the economic downturn, which led to a drop in demand for home finance. The beginning of the past five years was characterised by consumer deleveraging, low credit availability and generally low consumer sentiment. This started to change, however, as the government lowered the official cash rate and implemented numerous assistance programs to support growth in the residential housing market. As a result, the value of mortgages issued by the industry has grown over the past five years. New loan approvals declined in 2010-11, but have grown at an increasing rate since then. In March 2014, approvals of new loans were 27.7% higher than the previous year... purchase to read more
Industry Report - Starting a New Business Chapter
The industry has high barriers to entry. To be able to issue home loans, a lending institution needs to have access to capital that it can use to finance the loan. Therefore, a firm considering entry into the Mortgage industry in Australia must first establish a reliable source of funding. The cost of funding is important because it determines how competitively priced the new lender's products will be. Since the exit of investors from securitisation markets has occurred following the global financial crisis, funding has become far more difficult to obtain, resulting in increased barriers to entry.
Entrants that are able to overcome the funding issues must also have adequate distribution channels and the geographic reach to be able to compete successfully... purchase to read more