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Mortgage lending will be one of Australia’s top five industries during the next 12 months, according to a research group.
An IBISWorld report has forecast that the mortgages sector will expand by 9.6 per cent in 2014/2015 and be the fourth-fastest growing industry in Australia.
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Home ownership and the ‘Australian dream’ are still cherished by a broad range of people, including members of Generation X and new migrants, according to IBISWorld.
Strong mortgage growth would continue the trend of the past five years, during which lenders “significantly increased” their residential mortgage portfolios, the report said.
That demand for housing was driven by “favourable lending conditions, declining interest rates and a suite of government assistance packages”.
Meanwhile, building societies have been tipped to be the number one industry this financial year, with growth forecast at 15 per cent.
“We are witnessing revenue per enterprise grow exponentially, but the overall industry is shrinking as societies are acquired by banks and credit unions, and as smaller societies seek mergers with larger players,” the report said.
IBISWorld also said that any increase in the cash rate would “significantly boost” the sector’s revenue.
Building societies, like banks, have enjoyed considerable growth in the past five years, according to the report.
“The favourable lending conditions of the recent low-interest environment have allowed industry participants to build up their assets,” it said.
“When the tide turns and interest rates start increasing, the industry stands to reap large benefits.”
Superannuation funds management placed second on the IBISWorld list at 10.5 per cent, online education came third with 10.4 per cent and petroleum exploration came fifth with 8.2 per cent.
