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Kiwibank made little difference to mortgage market growth: Tripe

The mortgage market would have grown by about the same amount through the global financial crisis (GFC) even if the government-owned Kiwibank hadn't existed, says David Tripe, head of banking studies at Massey University.  

Thursday, November 25th 2010, 9:52PM

by Jenny Ruth

Kiwibank has dominated mortgage lending by registered banks since the December quarter of 2008 and, although its hectic growth has slowed in recent quarters, continues to lend at a much greater rate than its market share.

"Kiwibank is getting them (mortgages) because they've made the decision they want that business," Tripe says. In Kiwibank's absence, the mortgages it has been writing would have been shared around the other banks, making little difference to the overall amount of mortgages written, he says.

Excluding SBS Bank, which became a registered bank in October 2008, mortgage lending by registered banks rose $0.97 billion in the December 2008 quarter and Kiwibank accounted for a staggering 89.7% of that.

In the nine months ended June 2009, Kiwibank accounted for 45.9%, or $2.27 billion, of the $4.95 billion in mortgages written by registered banks. Over the following year, it accounted for 29.4% of the $6.34 billion written.

In September 2008, Kiwibank accounted for 3.76% of the bank mortgage market. By June 30 this year, it accounted for 6.11%.

"I don't think it (Kiwibank's existence) has made any difference as to whether the business has been done in the first place - maybe a little bit of difference at the margin," Tripe says.

Similarly, if the proposed "heartland bank," formed from the merger between Pyne Gould's Marac and the Canterbury and Southern Cross building societies, gains the banking licence it hopes for, it's unlikely to make a huge difference to how competitive the banking market is, Tripe says.

"They're simply going to be too small in any market segment - they will provide competition around the edges," Tripe says.

"Heartland bank" had total assets of $2.2 billion at June 30 compared with SBS Bank's $2.58 billion and its mortgage book was just $278.5 million.

 

« ASB's mortgage book shrinks for a second successive quarterKiwibank's growth momentum slows »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 5.44 - - -
AIA - Go Home Loans 7.99 5.99 5.69 5.69
ANZ 7.89 6.59 6.29 6.29
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.99 5.69 5.69
ASB Bank 7.89 5.99 5.69 5.69
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.40 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.94 - - -
BNZ - Rapid Repay 7.94 - - -
BNZ - Std 7.94 5.99 5.69 5.69
BNZ - TotalMoney 7.94 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.79 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 7.65 5.99 5.75 5.69
Co-operative Bank - Standard 7.65 6.49 6.25 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 6.40 6.10 -
First Credit Union Standard 8.50 7.00 6.70 -
Heartland Bank - Online 7.49 ▼5.65 ▼5.55 ▼5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.00 6.50 -
ICBC 7.49 5.99 5.65 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.75 6.89 6.59 6.49
Kiwibank - Offset 8.25 - - -
Kiwibank Special 7.75 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.44 ▼5.95 6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.99 6.95 6.29 6.29
SBS Bank Special - ▼6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.44 ▼5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.69 6.79 6.49 6.49
TSB Special 7.89 5.99 5.69 5.69
Unity ▼7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society ▼8.10 ▼6.19 ▼5.79 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 7.99 6.07 5.79 5.69

Last updated: 4 November 2024 9:31am

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