Mortgaging their future: Exposure to mortgages leaves industry vulnerable to a slowdown

The Building Societies industry has declined significantly over the past five years on the back of prominent exits and a falling cash rate. Intense competition from national banks and a low-interest rate environment have placed significant pressure on the industry. Building societies have struggled to fully capitalise on the rising demand for mortgages, as firms have been forced to raise more funds from depositors. The lack of access to further capital has been a key factor that has led to the conversion of several former operators to banks. These exits have been detrimental for industry revenue, which is projected to decline at an annualised 19.0% over the five years through 2017-18, to total $509.4 million. In the current year, revenue is forecast to decline more.

Industry Statistics & Market Size
Annual Growth 13-18
Forecast Growth 18-23

Industry Threats & Opportunities

  • Industry consolidation is set to continue, as operators face growing competition from banks
  • Residential housing loans have become an increasingly significant part of the industry
  • Further exits and conversions to banks are expected to drive industry revenue down
  • Industry Report - Starting a New Business Chapter

    The industry has high barriers to entry. The main barriers include the strict regulatory requirements imposed on prospective operators, difficulty in accessing funds, the existing presence of established players’ branch networks and the capacity to appeal to and retain a loyal member base. Potential entrants also need to compete not only with other building societies, but also other ADIs.The regulatory requirements imposed on existing building societies and any potential entrants into the industry are highly stringent. This makes it difficult for new entrants to set up operations and compete successfully. Furthermore, the large amounts of capital required to issue loans and enter the industry also represent a significant barrier to entry. Cha...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 assets 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?

    Industry businesses take deposits and provide loans for home building or purchasing purposes.

    Industry Products
  • Owner-occupied mortgages
  • Term and other loans
  • 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
  • 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
  • Mortgage Brokers

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

  • Demand Determinants
    Major Markets
  • Owner-occupiers
  • Investors
  • First home buyers
  • Commercial and other
  • 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
  • Profit
  • Interest expense
  • Wages
  • Other
  • 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, Maitland Mutual Building Society Limited,
  • Table: Newcastle Permanent Building Society Limited - financial performance
  • Table: Australian Unity Limited - 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 (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • Total Assets (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
  • Authorised Deposit-taking Institution
  • 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?

    IBISWorld’s Building Societies market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

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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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