First home buyers to return soon: St George
With the share of new loans being issued to first home buyers at a nine-year low as investors bid up house prices, Mr Frazis said "natural demand" would trigger a broader recovery in the property market next year.
The comments come amid official concern over the dominant role of investors in NSW, where St George controls about 11 per cent of the mortgage market.
Mr Frazis said the recovery in the housing market was sustainable and investors' dominance would inevitably fade.
"We're still yet to see a big increase in first home buyers coming into the market," he said. "My expectation, however, is that next year we might start seeing more activity in the first home buyers."
Westpac is betting on economy-wide credit growth accelerating in 2014 to its fastest pace since the global financial crisis.
"I think it's just natural demand," Mr Frazis said. "You've got population growth, you've got growth in immigration, particularly in NSW, and then if you look at the supply of housing, that's been constrained for a number of years now, so effectively your first home buyers will eventually come in."
First home buyers accounted for just 13.7 per cent of all new loans approved in August - the lowest share since 2004 - latest figures from the Bureau of Statistics show.
The Reserve Bank has expressed concerns that investor lending had accounted for 40 per cent of all home loan approvals in NSW, a share not recorded since the heady days of 2004.
Despite this, Mr Frazis argued recent activity in the property market was sustainable because it was not being driven by households borrowing as aggressively as in the past.
"You've got to remember, we've had 10 years of very subdued activity, particularly in NSW, so there's a lot of catch-up occurring," he said.
St George, which posted growth of 17 per cent in cash earnings to $1.2 billion last year, also includes Bank of Melbourne, BankSA and mortgage lender RAMS. It is likely to play a key role in Westpac's plan to arrest a decline in its market share in home lending, with St George and Bank of Melbourne upping their market share last year.
Mr Frazis is also targeting the business lending market, which he predicted was approaching "tipping point", which would translate into stronger credit growth in the first half of the year.
The bank's pipeline of approved business loans that had not yet been drawn down had surged 30 per cent in the last year, he said. "My view is that people are looking at opportunities, but they haven't quite yet got to the point where they're pushing the 'yes' button."
Frequently Asked Questions about this Article…
According to George Frazis, the chief executive of St George Bank, first home buyers are expected to return to the housing market due to natural demand driven by population growth and constrained housing supply, particularly in NSW.
According to George Frazis, the chief executive of St George Bank, first home buyers are expected to return to the housing market due to natural demand driven by population growth, increased immigration, and constrained housing supply.
As of the latest figures, first home buyers account for just 13.7% of all new loans approved, which is the lowest share since 2004.
The share of new loans being issued to first home buyers is currently at a nine-year low, with first home buyers accounting for just 13.7% of all new loans approved in August.
Investor lending has accounted for 40% of all home loan approvals in NSW, a level not seen since 2004, which has contributed to the dominance of investors in the market.
Investor activity has been dominant in the housing market, particularly in NSW, where investor lending accounted for 40% of all home loan approvals. This has contributed to the low share of loans for first home buyers.
St George Bank, along with Bank of Melbourne, is key to Westpac's plan to arrest a decline in its market share in home lending, having increased their market share last year.
St George Bank believes the housing market recovery is sustainable because it is not driven by aggressive household borrowing, and there is a lot of catch-up occurring after 10 years of subdued activity.
George Frazis believes the recovery is sustainable because it is not driven by aggressive household borrowing as in the past, but rather by natural demand factors.
Westpac plans to increase its market share in home lending by leveraging the growth of St George Bank and Bank of Melbourne, which have both increased their market share recently.
Westpac is betting on economy-wide credit growth accelerating in 2014 to its fastest pace since the global financial crisis, driven by factors like population growth and immigration.
St George Bank, along with Bank of Melbourne and RAMS, plays a key role in Westpac's strategy to arrest a decline in its market share in home lending by increasing their market presence.
The business lending market is approaching a 'tipping point' with a 30% surge in the pipeline of approved business loans that have not yet been drawn down, indicating potential for stronger credit growth.
St George Bank's chief executive, George Frazis, predicts that the business lending market is approaching a 'tipping point,' which could lead to stronger credit growth in the near future.
Factors such as population growth, immigration, and constrained housing supply are expected to contribute to an increase in first home buyer activity in the coming year.
The pipeline of approved business loans at St George Bank that have not yet been drawn down has surged by 30% in the last year, indicating potential for future growth in business lending.
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