Home loans market 'must remain competitive'

Those comparing home loans may be interested to hear some financial experts are concerned about the lack of competition in the market.

According to a recent report in the Australian, six economists recently wrote to the government suggesting an investigation is carried out to ensure the industry remains strong.

For the most part, the country has avoided the problems seen in the US and UK property markets – mainly due to the recent increase in the number of home loan providers available to consumers.

However, the financial crisis did have an effect on some of these firms, with many unable to lend to the same extent the once did, the report suggested.

Commentators fear the major banks – Westpac, Commonwealth, National Australia Bank and ANZ – could become the only main players in the market and competitive offers could dry up.

As a result, they are reportedly seeking assistance from the government in ensuring those comparing home loans are able to do so in a reasonable market.

Meanwhile, a recent article on news.com.au suggested the country’s housing market could be set to avoid slumps such as those in the UK and US by having investors filling the gap left by first-time buyers – which will be brought about by the end of the government grant scheme.

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