Mortgage market grows 53% since 2018
The Reserve Bank’s (RBNZ) latest dashboard data highlights the winners and losers in the long-term battle for home loan market share.
Since the RBNZ dashboard was established in 2018, housing loans have grown by 53%, compared with just 15% growth across all other forms of lending. Home loans remain the single largest lending activity in New Zealand’s banking system, supported by capital rules that make mortgage lending more profitable for banks than other types of credit.
Those incentives intensified after Basel III came into effect following the Global Financial Crisis, and capital settings remain under active review. RBNZ has recently opened consultation on prudential capital requirements for deposit takers, considering whether current rules strike the right balance between stability, competition, and efficiency.
Big banks dominate, but smaller players advance
The five major banks continue to dominate, accounting for over 93% of all mortgage lending — the highest level since records began in 2018. The big are getting bigger, with entrenched positions that are hard to dislodge, interest.co.nz reported.
Kiwibank and BNZ have been the standout performers, steadily growing their share of the mortgage market to record highs.
In contrast, ANZ and ASB, New Zealand’s two largest lenders, have seen mixed results. ANZ has largely held its ground over the past eight years, while ASB has slipped fractionally.
Westpac loses ground, turns to price competition
The biggest underperformer is Westpac, which has consistently given up mortgage share over the dashboard’s eight-year history. Much of that flow has shifted toward BNZ and Kiwibank.
In response, Westpac has emerged as one of the most rate-competitive lenders in the market, cutting pricing to claw back lost ground. Analysts note that reversing these long-term shifts will take time, with gains just as incremental as the losses, interest.co.nz reported.
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