[Report] Australia Low-documentation & Non-conforming Mortgage Market Research, Trends, Analysis TOC

CHAPTER 1 INTRODUCTION
- Who is the target reader?
- Scope
- How to use this report
CHAPTER 2 AUSTRALIA' S MORTGAGE MARKET
- Despite a decline in 2004, the Australian mortgage market continued to exhibit strong growth over the 2001-2005 period
  - Housing lending commitments grew from A$127.4 billion in 2001 to A$211.7 billion in 2005
  - Housing credit aggregates grew from A$385.1 billion in 2001 to A$723.9 billion in 2005
  - Greater refinancing increased churn in the market, resulting in further business for lenders
    - Poaching competitors customers is successful for some lenders
CHAPTER 3 THE LOW-DOCUMENTATION MORTGAGE MARKET
- The potential of the low-doc mortgage market
  - The number of self-employed individuals in Australia exceeded 1.3 million at the end of August 2006
    - Self-employed individuals in Australia grew by 12.3% over the 2004-2005 period
    - Many small business owners have only recently launched their operations
  - The number of contract or casually employed individuals rose to 26% of all employees
  - Sizing the low-doc mortgage market
    - Step one - calculating the number of employers, self-employed and casual workers
    - Step two - Quantify the potential low doc customer base
    - Step three - Quantify the number of potential low-doc households
    - Step four - Calculate the number of low-doc households with a mortgage outstanding
    - Step five - Calculate the total number of dwellings being purchased with a mortgage by low-doc households as a percentage of the total number of dwellings being purchased with a mortgage in Australia
    - Step six - Calculate lending commitments to low-doc borrowers
  - Reasons behind the strong growth of the low-doc market
- Competitor dynamics
- Forecasting the size of the low-doc market
  - Lending commitments for the low-doc market will rise to to A$58.4 billion by the end of 2011
  - Current issues in the low-doc market
CHAPTER 4 NON-CONFORMING MORTGAGE MARKET
- The potential size of the non-conforming mortgage market continues to grow
  - The number of credit impaired people increased
    - The number of bankruptcies rose by 22,299 over the July 2005 to June 2006 period
    - Debt agreements are popular athough demand is somewhat volatile
    - Defaults will also affect an individual' s credit history
  - The number of divorcees remains high
  - Australia has a high number of new or temporary residents who fall into the non-conforming target market
  - Quantifying the non-conforming population
    - The non-conforming population consisted of 2.5 million individuals at the end of 2006
    - Individuals with a bad credit history continue to account for more than 35% of the non-conforming population
  - Sizing the potential non-conforming mortgage market
    - The potential size of the non-conforming mortgage market in 2006 was $15.9 billion
  - Market shares
    - Market shares of non-conforming specialist lenders in perspective of the whole non-conforming market
    - Market shares of non-conforming specialist lenders in perspective of specialist lending only
- Competition in the non-conforming market intensified
  - Bluestone
  - Liberty Financial
  - Pepper Australia Pty Ltd
  - GE Money
  - Challenger (Interstar)
  - Mobius
  - Market issues
- Forecasting the size of the non-conforming mortgage market
  - Lending commitments for the non-conforming market will rise to to A$22.1 billion by the end of 2011
CHAPTER 5 APENDIX
- Supplementary data
- Definitions
  - AAGR
  - CAGR
  - Cash rate target
  - Contributing family worker
  - Employees
  - Employers
  - Lending commitments
  - Low-documentation mortgage loans
  - Non-conforming
  - Own-account worker
- Future readings
- Relevant links
- SPP writing team
- How to contact experts in your industry
- List of Tables
  - Table 1: Macroeconomic factors used to forecast lending commitments in the non-conforming mortgage market, 2007-2011
  - Table 2: Macroeconomic factors used to forecast lending commitments in the non-conforming mortgage market
  - Table 3: Housing lending commitments, 2001- September 2006
  - Table 4: Housing credit aggregates, 2001- October 2006
  - Table 5: Refinancing in the mortgage market, 2001-2005
  - Table 6: Housing credit aggregates of market shares of banks, December 2004-July 2006
  - Table 7: Number of self-employed individuals, 2001-Aug 2006
  - Table 8: Australian workforce breakdown, 2001-August 2006
  - Table 9: Size of the low-doc mortgage market, 2002-2006
  - Table 10: Number of IV and XI bankruptcies, 1995/96 - 2005/06
  - Table 11: Number of debt agreements, 1996/97 - 2006/97
  - Table 12: Number of divorces, 2000-2004
  - Table 13: Temporary residents, December 2004-December 2005
  - Table 14: Individuals in the non-conforming population, 2001-2005
  - Table 15: Number of individuals with a bad credit history and also as a proportion of the non-conforming population, 2001-2005
  - Table 16: Non-conforming specialist lenders market shares, 2005-2006
  - Table 17: Market shares of the loans written by non-conforming specialist lenders only
  - Table 18: Forecasts of non-conforming lending commitments, 2007-2011
- List of Figures
  - Figure 1: Over the 2001-2005 period, housing lending commitments grew by 13.5% compounded annually
  - Figure 2: The proportion of investment housing lending declined since house price growth rates have fallen; that is, since 2003
  - Figure 3: Housing credit aggregates increased from A$385.1 billion to A$723.9 billion in 2005. By October 2006, they stood at A$805.4 billion
  - Figure 4: Refinancing as a proportion of total lending value increased over time, from 19.9% in January 2001 to 28.7% at October 2006
  - Figure 5: Refinancing increased over the 2001-2005 period, particularly when lenders began targeting their competitors customers
  - Figure 6: Over the December 2004 - July 2006 period, CBA saw the largest drop in market share in the mortgage market while ANZ saw the greatest increase
  - Figure 7: Over the 2001-2005 period, the proportion of self-employed workers declined, however over the first eight months of 2006 this proportion increased
  - Figure 8: The overall number of self-employed individuals increased over the December 2005 - August 2006 period, despite the proportion the number of contributing workers falling considerably
  - Figure 9: Datamonitor estimates lending commitments in the low-doc mortgage market will reach A$37.9 billion in 2006
  - Figure 10: Strong growth is expected to continue in the low-doc market with lending commitments reaching A$58.4 billion in 2011
  - Figure 11: The number of IV and XI bankruptcies has gradually started increasing in recent years, with the July 2006- June 2007 year expected to be higher again
  - Figure 12: The number of bankruptcies per quarter was relatively volatile over the last 10 years
  - Figure 13: The number of debt agreements signed has increased significantly since their introduction in 1996
  - Figure 14: The quarterly data indicates a general increase in the number of debt agreements although in the last few years there was some volatility
  - Figure 15: The number of divorces increased by 10.9% over the 2000-2001 period, although it has since declined
  - Figure 16: The number of temporary residents increased by 9.1% over the twelve months to December 2005
  - Figure 17: Datamonitor estimates that the potential non-conforming mortgage population was 2.5 million at the end of 2005 with an average annual growth rate of 4.6% over the 2001-2005 period
  - Figure 18: There were almost 870,000 individuals with a bad credit history in Australia at the end of 2005, accounting for approximately 35.6% of the non-conforming population
  - Figure 19: The non-conforming mortgage market continues to grow in 2005 and 2006
  - Figure 20: In both 2005 and 2006, Liberty had the largest market share when compared to other non-conforming lenders
  - Figure 21: Changes in the market shares of the non-conforming specialists are more obvious when in perspective of the loans that these players have written rather than the whole market
  - Figure 22: Catchy phrases and a unique marketing concept are likely to make Liberty' s latest venture, successful
  - Figure 23: HSBC' s Home Rewards loan encourages customer loyalty as borrowers receive a discounted interest rate which drops to 0.75% from the fourth year onwards
  - Figure 24: Non-conforming lending commitments are estimated to increase to A$22.1 billion by the end of 2011
  - Figure 25: Datamonitor' s core consulting capabilities

Low-documentation and Non-conforming Mortgage Markets in Australia 2006

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