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 - Industry Locations Chapter

    The branches of building societies are primarily located in New South Wales due to the historic roots of the remaining institutions. The remaining operators in the industry include Newcastle Permanent Building Society, Big Sky Building Society and Maitland Mutual Building Society. Newcastle Permanent Building Society and Maitland Mutual Building Society are headquartered in New South Wales and operate branches across the state, while Big Sky Building Society's headquarters are located in Melbourne with a branch in Queensland, South Australia and Western Australia.Building societies have focused their attention on establishing a presence in remote and regional towns around Australia, with a focus on New South Wales. Bui...purchase to read more.

    Additional Insights for the Building Societies Industry

    IBISWorld has determined the most important Key Success Factors for the Building Societies 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

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    IBISWorld’s Building Societies market research report is a comprehensive guide to market size and growth prospects. Our industry reports offer strategic industry analysis of the factors influencing companies, including new product developments, economic, lifestyle and demographic influences, distribution and supply chain factors and pricing issues. Full analysis accompanies our data forecasts to illustrate how the market responds to emerging industry trends.

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    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
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    • 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
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