Big 4 lose market share to non-major lenders

The latest AFG Index released by aggregator Australian Finance Group (AFG) has shown Australia’s major lenders lose market share across most home buyer categories to their non-major rivals in 1Q25, reaching the lowest market share level since 3Q22.

The index showed an increase in lodgements with non-major banks by AFG brokers, from 42.8 per cent in 4Q24 to 44.1 per cent in 1Q25, while major bank lodgements fell from 57.2 per cent to 55.9 per cent.

For investment volumes, non-majors saw volumes increase to 44.3 per cent from 42.8 per cent during this same period, while the big four and their associated brands saw investment volumes drop from 57.2 per cent to 55.7 per cent.

However, the major lenders saw first home buyer volumes increase in 1Q25, from 66.5 per cent to 67.3 per cent, while their non-major counterparts recorded a decrease from 33.5 per cent to 32.7 per cent.

“Despite the majors recently announcing a new range of lower fixed rates this does not appear to have tempted home loan customers with the percentage for the quarter still well below long-term averages,” AFG’s index said.

1Q24 lodgement record

The AFG index further revealed that its brokers had broken the 1Q25 home loan lodgement volume record, reaching $24,183,546,844. This also marked the highest lodgement level since the second quarter of 2022.

Additionally, Western Australia, South Australia, and Queensland recorded the highest lodgement quarter to date. Western Australia broke the $3 billion threshold for the first time since the index began tracking activity.

AFG CEO David Bailey explained the results: “The continued momentum shows home buyers are becoming increasingly confident cash rates are at their peak.

“This quarter’s results are the highest Q1 on record and as we head into the spring selling season, we expect our brokers will again be seeing a lift in demand as borrowers look to secure competitive finance, so they are ready to make their move in a tight housing market.”

First home buyers are the only category of buyer to drop this quarter, dropping slightly from 12 per cent to 11 per cent, indicating that affordability remains to be a hurdle for this cohort.

“With increasing house prices, average loan sizes are also on the rise,” Bailey said.

“This could be a result of pre-approvals increasing, as borrowers try to secure the maximum amount, they can service in a bid to secure a home in a market restricted by the availability of stock.”

[RELATED: Brokers a ‘source of confidence’ for home buyers]

Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.