Better together: Industry consolidation has ramped up in response to external competition

A period of sustained decline has characterised the Building Societies industry over the past five years. Intense competition from national banks and a low-interest rate environment have placed significant pressure on the industry. Overall, industry revenue is expected to decline at an annualised 22.1% over the five years through 2016-17, to total $474.2 million. A large proportion of industry revenue is made up by interest income. Consequently, changes to the cash rate are a key component to the industry’s sustainability. Over the past five years, the Reserve Bank of Australia has sought to stimulate economic growth by cutting the cash rate. As a result, interest generated by building societies on their loan books has fallen. In 2016-17, revenue is expected to decline by more.

Industry Statistics & Market Size
Annual Growth 12-17
Forecast Growth 17-22

Industry Threats & Opportunities

  • Industry consolidation looks set to continue, as operators face growing competition from banks
  • Housing loans are expected to contribute to the largest share of industry revenue
  • Projected increases in interest rates are likely to support sporadic industry growth
  • Industry Report - Industry Products Chapter

    Building societies generate revenue by charging interest on loans, and fees for administration, maintenance and processing of loans and transactions. The industry's major source of funding for lending comes from retail depositors, to whom building societies pay interest. Building societies provide largely the same core products and services as banks, but offer a narrower range, focusing more on mortgage lending. Due to their mutual ownership structure, building societies do not benefit from the same scale as banks and are typically more risk-averse. There is also a historical aspect to the industry's focus on housing. A strong community desire to secure housing without relying on banks drove the creation of building societies...purchase to read more.

    Additional Insights for the Building Societies Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Building Societies Industry are

  • Management of a high quality asset portfolio
  • Having marketing expertise
  • Having an extensive distribution/collection network
  • IBISWorld analysts also discuss how external factors such as Residential housing loan rates and Residential housing prices in the Building Societies industry impact industry performance..

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    What's in this report

    What is the Building Societies Industry?

    Businesses in this industry take deposits and provide loans for home building or purchasing purposes.

    Industry Products
  • Owner-occupied mortgages
  • Term and other loans
  • Fee and commission income
  • Investment property mortgages
  • Industry Activities
  • Deposit accounts
  • Mortgage lending
  • Personal lending
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Residential housing loan rates
  • Residential housing prices
  • Consumer sentiment index
  • Residential property yields

  • Current Performance
  • Member-owned structure
  • Lending portfolios
  • Industry exits
  • Chart: Revenue Growth

  • Industry Outlook
  • Interest rates
  • Grants and regulation
  • Further industry exits
  • Table: Building Societies Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Building Societies Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Professional Services
  • Consumers

  • Key Selling Industries
  • Accounting Services
  • Custody, Trustee and Stock Exchange Services
  • Finance

  • Products & Services
  • Owner-occupied mortgages
  • Investment property mortgages
  • Fee and commission income
  • Term and other loans
  • Other
  • Chart: Building Societies Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Other buyers
  • First homebuyers
  • Investor buyers
  • Business clients
  • Chart: Major Market Segmentation for the Building Societies Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Building Societies

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Building Societies Industry

  • Industry Globalization
    Newcastle Permanent Building Society Limited, Australian Unity Limited, B & E Ltd, Maitland Mutual Building Society Limited,
  • Table: Newcastle Permanent Building Society Limited - financial performance
  • Table: Australian Unity Limited - financial performance
  • Table: B & E Ltd - financial performance
  • Table: Maitland Mutual Building Society Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Building Societies Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Building Societies Industry
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)
  • Total Assets (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Authorised Deposit-Taking Institution
  • A corporation authorised under the Banking Act 1959 to take deposits from customers.
  • Investment Housing Loans
  • Loans for investment properties.
  • Mutual Organisations
  • These are organisations owned by and for the benefit of members. They exist for the purpose of raising funds from members, which are used to provide common services to all involved.
  • Revolving Loans
  • Loans offered against a property with repayment accepted at any time.
  • What Our Customers Say

    Why buy this report?

    The Building Societies market research report provides key industry analysis and industry statistics, measures market size, analyzes current and future industry trends and shows market share for the industry’s largest companies. IBISWorld publishes the largest collection of industry reports so you can see an industry’s supply chain, economic drivers and key buyers and markets.

    IBISWorld industry market research reports enable you to:
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    This report on Building Societies:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Building Societies market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Building Societies, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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