UPDATE 1-Macquarie eyes a slice of Australian banks' home mortgage pie

Its push comes as Macquarie diversifies away from investment banking into less riskier areas, and is seen as smart use of capital when return on equity from the mortgage market is high. The investment bank also has more liquidity, giving it a strong base to fund home loans.Other firms too are delving deeper into Australia's home loans market,Fashion Dresses including mortgage group Yellow Brick Road Holdings Ltd, 14.9 percent-owned by Macquarie, and the Australian arms of ING Groep NV and Citigroup Inc .To raise more funds to lend to home buyers, those smaller lenders are now securitising mortgages in a market which came to a halt just a few years ago after the global financial crisis spooked investors Fashion Dresses and lifted the cost of funding to exorbitant levels.While funding costs are still significantly more expensive than in 2006 before the crisis, they have sufficiently fallen from the peak to allow small lenders to take a crack at the Big Four's stranglehold of the home loans market.

The Big Four haven't always had such dominance. Before the crisis, smaller lenders had 30 percent of the market. They included Australian regional banks such as St George Bank, Suncorp Metway and Adelaide Bendigo Bank, and non-bank lenders like Resimac and FirstMac.Australian arms of international lending institutions were also part of the group, with Citi and ING able to gain a solid presence even without the brand recognition Fashion Dresses in the country that Macquarie enjoys.Talk that Australia's housing market is in a bubble has intensified with a spike in an index for home prices in the country's major cities to an unprecedented high as well as close to record auction clearances in parts of Sydney.

ANZ, Commonwealth Bank, NAB and Westpac are on track to report an 8.5 percent rise in combined full-year cash earnings to A$27.1 billion.Any shifts in home loan market share for individual banks are also set to go under the microscope, with analysts citing commentary on mortgage demand and pricing from the banks as drivers for share prices.Australian mortgages represent 61 percent of gross loans and advances for Westpac, 60 percent for Commonwealth Bank, 45 percent for NAB and 42 percent for ANZ,Fashion Dresses according to figures from UBS.Westpac may be of particular interest after it experienced slower growth in its domestic mortgage book of 3.8 percent in the 12 months to the end of August, compared to the banking industry average of 5.1 percent.
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