Newcastle Permanent’s history can be traced back over 110 years.
From its beginning to the present day, the core principle of mutuality has underpinned the operational philosophy of Newcastle Permanent.
Newcastle Permanent's origins date back to 2 February 1903.
A meeting held in Wickham (a Newcastle suburb) on that day saw a few visionary individuals determine to help low income families achieve the security and dignity that comes from home ownership. This goal was to be realised through the establishment of a building society based on the Starr-Bowkett model that had worked successfully in the United Kingdom since the 18th century.
A Starr-Bowkett Society was a cooperative based on the principle of mutual agreement and advantage and was designed to provide the type of stability and security within a community that comes from home ownership. The establishment of the first Starr-Bowkett Society in Newcastle was permitted under the NSW Government's Building and Cooperative Societies Act of 1901.
Members of the Society made regular monetary contributions. When sufficient funds were available a draw was conducted to determine which member would receive a loan to build or buy their home. Progressive draws continued, as funds allowed, until all members had received their loan.
The inaugural Newcastle District Starr-Bowkett Building Society soon established a respected position in the city's financial hierarchy. The Society had a singular purpose. Members made affordable subscriptions and repayments and, in time, all had the opportunity to buy their own home.
The running cost of the Society was modest and there was no accumulation of capital. For many members the loan they received was interest-free. The overriding principle was that every member contributed to the Society, and the Society existed for the benefit of those members. The founders created a financial structure in which each member shared the benefits of the whole endeavour.
Home ownership and the growth of Newcastle
The success of the mutual cooperative concept in delivering a significant increase in home ownership, and the related social stability and prosperity that follows, was responsible for the creation of a number of similar societies based on the Starr-Bowkett principle in Newcastle and further afield, in line with the steady growth of other population centres in the Hunter Valley.
In time, as the prosperity of NSW grew, the NSW Government introduced legislation that allowed the Society to operate as a non-terminating organisation and, by virtue of government guarantees, these societies were able to offer a more diverse portfolio of loans and to lend a greater proportion of the valuation amount on a property.
The advent of the Newcastle Permanent we know today can be traced to the formation in 1939 of a new entity, the Newcastle Cooperative Building and Investment Society Limited, a non-terminating hence 'permanent' society.
The end of World War II saw a significant increase in demand for housing in Australia, especially in the Newcastle area. While Starr-Bowkett societies were still functioning in parallel with the new non-terminating building societies, restrictions on their ability to match the demand led to a growth in membership of the building societies.
The growth of Newcastle Permanent aligns very strongly with the growth of suburbs throughout the Newcastle and Lake Macquarie area. The pattern of the release of land for subdivisions in the suburbs matches the opening sequence and location of many Newcastle Permanent branches.
Until 1966 Newcastle Permanent had only one branch located in the head office building at 450 Hunter Street. In 1966 a second branch was opened at Charlestown.
Since that time, a total of 55 Newcastle Permanent branches have been opened and the Newcastle Permanent brand became a familiar and trusted name throughout the Hunter, Central Coast, Mid North Coast, New England and Northern Rivers regions.
A level playing field
In 1999 the federal government introduced new legislation covering the operation and jurisdiction of Authorised Deposit-taking Institutions (ADIs). This legislation meant that all Australian ADIs would be covered by the same regulator: the Australian Prudential Regulatory Authority (APRA).
Effectively, the financial playing field had been levelled and building societies were now able to offer an equivalent range of products and services to the major retail financial services providers.
Other subtle changes that were made possible by the switch to APRA's jurisdiction included Newcastle Permanent being able to: issue financial institution cheques in its own name; offer Trust Accounts for solicitors and real estate agents; offer a Newcastle Permanent branded credit card.
While the 1990s saw a period of rationalisation of the number and form of building societies throughout Australia, many choosing to either merge and/or demutualise, the directors of Newcastle Permanent held firmly to the concept of mutuality as a core operational philosophy.
Today Newcastle Permanent is Australia's financially strongest mutual building society with total assets of over $7.4 billion. We operate a steadily growing network of branches throughout the Hunter, Central Coast, Mid North Coast, New England and Northern Rivers, and have reinforced the strength of our support for the communities in which we operate through the creation of Newcastle Permanent Charitable Foundation.