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HYPOSTAT 2008 A review of europe’s mortgAge And housing mArkets
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Alessandro Sciamarelli Statistical Adviser E-mail: firstname.lastname@example.org Tel: +32 2 285 40 42
Susan Yavari Head of Economic Affairs E-mail: email@example.com Tel: +32 2 285 40 46
Rodolfo Labadie Economic Adviser E-mail: firstname.lastname@example.org Tel: +32 2 285 40 41
LIST OF CONTRIBUTORS OF DATA AND ANALYSIS
Frans Meel Adviser Union Professionnelle du Crédit (Febelfin) E-mail: email@example.com
Joszef Hegedus Managing Director Metropolitan Research Institute E-mail: firstname.lastname@example.org
Sergiu Oprescu Business Manager Alpha Bank Romania E-mail: email@example.com
Odd Kristiansen Adviser Norwegian State Housing Bank E-mail: firstname.lastname@example.org
Jindrich Thon Hypoteční banka E-mail: email@example.com
Tom O’Connor Adviser Irish Banking Federation E-mail: firstname.lastname@example.org
Miroslava Mizerakova Mortgage Broker/Lawyer Hypocentrum, a.s. E-mail: mirka.mizerakova@ hypocentrum.sk
Andrey Krysin President of European Trust Bank European Trust Bank E-mail: email@example.com
Kaare Christensen Association of Danish Mortgage Banks E-mail: firstname.lastname@example.org
Angelo Peppetti Retail Credit Department Associazione Bancaria Italiana E-mail: email@example.com
Andreja Cirman University of Ljubljana E-mail: firstname.lastname@example.org Srna Mandič University of Ljubljana E-mail: email@example.com
Goran Milicevic University of Belgrade E-mail: firstname.lastname@example.org
Ari Laine Senior Statistical Officer Housing Fund of Finland E-mail: email@example.com
Jonas Grincius Chief Financial Officer Parex Bank E-Mail: firstname.lastname@example.org
Oleksiy Pylipets Ukrainian National Mortgage Association E-mail: email@example.com Oleksandr Moiseienko Ukrainian National Mortgage Association E-mail: firstname.lastname@example.org
Jean Marie-Gambrelle Directeur des Relations Internationelles Union Sociale de l’Habitat E-mail: jean-marie.gambrelle@ creditimmobilierdefrance.com Marielle Thomas Direction des Etudes Economiques et Financières Union Sociale pour l’Habitat E-mail : email@example.com
Lorena Mullor Gomez Economist Asóciacion Hipotecaria Española E-mail: firstname.lastname@example.org Irene Peňa Cuenca Asóciacion Hipotecaria Española E-mail: email@example.com
Peter Sant Economic Research Officer EU Affairs Bank of Valletta E-mail: firstname.lastname@example.org
UNITED STATES OF AMERICA
Dwight Jaffee Professor of Banking and Finance Haas School of Business University of California, Berkeley E-mail: email@example.com Sean Wilkoff Haas School of Business University of California, Berkeley E-mail: firstname.lastname@example.org
Marja Elsinga Delft University of Technology E-mail: email@example.com
Christian Nilsson Economist Swedish Bankers’ Association E-mail: christian.nilsson@ bankforeningen.se
Thomas Hofer Verband deutscher Pfandbriefbanken E-mail: firstname.lastname@example.org
Agnieszka Nierodka Mortgage Credit Foundation E-mail: email@example.com
James Tatch Council of Mortgage Lenders E-mail: firstname.lastname@example.org
Claude Taffin Housing Finance Economist The World Bank, Washington E-mail: email@example.com Michael Ball Professor of Urban and Property Economics University of Reading E-mail: firstname.lastname@example.org
Theodore Mitrakos Economic Research Department Bank of Greece E-mail: TMitrakos@bankofgreece.gr
José Jesus Martins Manager Caixa Economica Montepio Geral E-mail: email@example.com
Magnus Arni Skulason Reykjavik Economics ehf E-mail: firstname.lastname@example.org
Note: Housing and Mortgage Markets in 2008 overview and other country chapters written by the EMF
KEY FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 HOUSING AND MORTGAGE MARKETS IN 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 THE RENTAL SECTOR IN HOUSING POLICY AND HOUSING FINANCE . . . 11 OVERCOMING THE CRISIS IN EUROPEAN HOUSING MARKETS. . . . . . . 16 EU27 COUNTRY REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Austria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Belgium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Bulgaria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Cyprus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Czech Republic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Denmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Estonia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Finland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Greece. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Hungary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Ireland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Latvia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Lithuania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Luxembourg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Malta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Poland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Portugal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Romania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Slovakia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Slovenia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Spain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Sweden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 United Kingdom. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 NON-EU COUNTRY REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Iceland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Norway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Serbia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Ukraine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
STATISTICAL TABLES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 1. Residential mortgage debt to GDP Ratio % . . . . . . . . . . . . . . . . . . . . . 59 2. Residential Mortgage Debt per Capita, 000s . . . . . . . . . . . . . . . . . . . 60 3. Covered Bonds as % GDP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 4. Owner Occupation rate, % . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 5. Total Dwelling Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 6. Housing Starts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 7. Housing Completions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 8. Building Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 9. Number of Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 10. House Prices (national) annual % change . . . . . . . . . . . . . . . . . . . . . 68 11. Building Prices, annual % change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 12. Total Outstanding Residential Loans, € million. . . . . . . . . . . . . . . . 70 13. Gross Residential Loans, € million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 14. Net Residential Loans, € million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 15. Total Outstanding Non Residential Loans, € million . . . . . . . . . . 73 16. Gross Non Residential Loans, € million . . . . . . . . . . . . . . . . . . . . . . . . 74 17. Net Non Residential Loans, € million . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 18. Loan-to-Value ratios for mortgage loans, national averages (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 19. Representative Interest Rates on new mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 20. Total Covered Bonds Outstanding (backed by mortgages), € million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 21. Total Covered Bonds Issuance (backed by mortgages), € million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 22. Total Residential Mortgage-Backed Securities (RMBS) Issues, € million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 23. GDP at Current Market Prices, € million . . . . . . . . . . . . . . . . . . . . . . . 81 24. GDP per capita at Purchasing Parity Standards (PPS), UE27=100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 25. Real GDP growth rate, % . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 26. Real Gross Fixed Investment in Housing, annual change (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 27. Harmonised Index of Consumer Prices (HICP), annual change (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 28. Population, 000s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
2008 EMF HYPOSTAT |
The Hypostat, the annual statistical compendium on EU mortgage and housing markets published by the EMF, enlarges its scope this year well beyond the borders of Europe and includes for the first time data on the United States. This is in recognition of the important fall-out of the international US-triggered subprime loans crisis, which was among the factors behind the credit crisis and the loss of confidence, as well as the macroeconomic downturn of 2008. These factors were also reflected in figures for mortgage and housing indicators in 2008 across the EU. For the sake of immediate cross-country comparability and homogeneity, national annual values for mortgage lending indicators in the statistical tables are expressed in Euros. We are fully aware that this may cause some problems in the correct interpretation of the data itself, due to the potentially considerable exchange rate effects which can distort the size of mortgage lending figures expressed in national currencies.
Annual 2008 statistics on the European mortgage markets reveal that the generalised slowdown - first reported by the EMF in the first half of 2007 1 - continued in marked contrast with the very buoyant performance of previous years. Mortgage activity across the EU was largely driven by monetary tightening by the ECB in July 2008 as inflationary pressures in the economy built up; this was later offset by an expansionary monetary policy in the last quarter of the year, while at the same time lenders’ difficulty in raising funding resulted in tightened lending criteria. In addition, macroeconomic fundamentals and general economic sentiment rapidly deteriorated in the second half of 2008. Nominal house prices in many EU markets recorded year-onyear falls, although these drops in housing values should be put in the context of the peaks they had reached around 2006. The continued slowdown which was observed in housing and mortgage markets during 2008 should be seen in the context of worsened conditions both in the macroeconomic and mortgage funding environments which exacerbated an expected correction after the record levels reached at the end of an extraordinarily buoyant past cycle.
In summary, Hypostat 2008 provides the following information: In the EU27 the aggregate volume of residential mortgage lending outstanding slightly decreased for the first time on record, from 6.2 trillion Euros (or 6,160,877 million Euros) in 2007 to 6.1 trillion Euros (or 6,087,928 million Euros) in 2008, which represents a negative annual growth rate of 1.2%, in comparison with the 11.6% and 7.9% positive growth rates recorded in 2006 and 2007 respectively. Residential mortgage lending in the EU27 also accounted for 49.8% of the EU`s GDP (51.2% in 2007); While remaining largely positive in several EU countries, growth rates in total outstanding mortgage loan volumes slowed down in comparison to 2007 almost everywhere. As in previous years, the new Member States of the EU27 recorded much higher annual growth rates than the EU15 Member States; Only two out of the EU27 Member States experienced higher growth in outstanding mortgage loan volumes in 2008 compared to 2007, and these were Austria and Poland. The countries that recorded negative annual growth rates in outstanding mortgage loans expressed in Euros were the UK (-16.4%), although it is worth noting that this contraction was due to the exchange rate effect with the dramatic fall of the Pound in Q4 2008 – when expressed in Pounds outstanding mortgage loans in the UK actually increased by 3.2%2 in 2008. Germany also saw negative growth (-0.7%), marking the second annual decrease given that in 2007 the German market recorded an annual decrease of 2.4%; As regards growth rates in gross residential loans, while these had generally been much more moderate compared to previous years (or even negative) in most countries in 2007, in 2008 they were sharply negative in all the EU countries surveyed. Evidence of positive growth rates could be observed only in Germany (1.8%); Housing supply, both in terms of housing starts and building permits issued fell significantly in several EU countries in 2008. After some signs of cooling-off in residential construction activity which were already reflected in 2007 data, falls in housing supply indicators were recorded in all countries for which information is available, with the exception of Romania. More severe falls were reported in countries which recorded historical peaks in residential construction activities in the past housing cycle; With regard to house prices in nominal terms, the correction process from record levels reached around 2006 continued in 2008 and led to negative year-on-year growth rates in many EU15 countries. Also in the markets where positive increases were reported, these growth rates were significantly lower than 2007. On average, nominal house prices increased by 0.3% in the EU27 and, according to ECB data, a growth rate of 1.7% was recorded in the euro area; Interest rate increases by the ECB and other EU central banks in the third quarter of 2008 can partly explain the downturn in the EU’s residential mortgage markets in the second half of the year. Though by the last quarter of 2008, the ECB dramatically reversed its monetary policy and lowed its central rate by 175 basis points (from 4.25% in October 2008 down to 2.50% at the end of the year) in order to relaunch economic activity, and ease interbank lending. This was also intended to alleviate ongoing funding problems for mortgage banks and support mortgage markets, by passing these cuts to mortgage interest rates; Mortgage interest rates in the EU and in the euro area substantially increased from December 2007 to November 2008 across all loan maturities; these increases were higher than those recorded from December 2006 to December 2007. Yet, interest rates dropped dramatically in December 2008 after the large cuts in the ECB repo rate in the last quarter of 2008 and thus saw a return to the levels observed in the same month of the previous year. However, due to accelerating inflation in the euro area, real interest rates remained at low levels, which helped soften the mortgage market slowdown. The increase in nominal mortgage interest rates during 2008 contributed to the shift in borrowers` preference towards longer-term and fixed rate mortgages.
See EMF Quarterly Review Statistics, Q2 2007 and Q3 2007. It should also be reminded that the largely negative performance in outstanding mortgage lending (expressed in Euros) in the UK determined the negative growth
rate in the aggregate EU27 mortgage lending, since the UK market in 2008 accounted for 24.0% of the aggregate EU27 market.
2008 EMF HYPOSTAT
Kennedy. As in the first years that followed their membership of the EU. such as Estonia (-3.9% respectively). although less than in 2007 (10. in some countries the drop was less pronounced than in 2007. Gros.europa. This was the result of of the harsh correction in the housing market cycle which began in 2007 after years of sustained growth (Chart 1)7.0%. which were however above the 2% inflation target set by the ECB. This rate cut was then followed by two further cuts.8% in 2007). 3 4 See European Commission. according to the data available at the end of 2008.Housing and mortgage markets in 2008 1.0%). in Germany it was much less marked than in 2007 (-4. MACROECONOMIC OVERVIEW In 2008 real GDP growth in the EU27 was only 0. this was exacerbated by deterioration in the macroeconomic environment during 2008. One of the major factors behind the collapse of house prices in the US was the excess supply in fixed investment in housing between 1997 and 2006. OECD. and the number of housing completions on the other.6 In 2008. These developments in unemployment rates in 2008 were more consistent with a non-recession scenario (i.50%. 11. output growth differed considerably between the EU27. 2008 EMF HYPOSTAT | 7 5 5 . N. This expansionary stance in monetary policy was expected to continue in the next year.3%. Agnello and L. In 2008. Schuknecht. in October. but the role of housing supply should not be ignored. resulting in flat contributions to GDP growth. For a more detailed focus on the role of housing supply in explaining housing market cycles. so that at the end of 2008 the repo rate in the euro area was 2. ECB Working Paper Series no. André. In Spain. In the euro area it was slightly below the EU27 level (3. Hungary. van den Noord and C. EU27 aggregate figures cannot be compared on a year-on-year basis.3%). in the aggregate EU27 employment growth in 2008 clearly slowed down but was still positive (0. Inflation rates were therefore generally higher in 2008 than in 2007 in all EU countries. changes in interest rates and income. Slovakia (6. such as Romania (7.6%) and Latvia (-4. Slovakia. annual average unemployment rate went above 10% for the first time since 2004. historical data shows that residential building activity returned to almost 1998 levels. the strongest growing countries in the EU were among the new Member States. CEECs such as Bulgaria. see `Recent house price developments: the role of fundamentals`.00% to 4.9% in 2007 and 3. HOUSING MARKETS 2. housing completions and housing starts provided evidence of a further decline in housing supply in EU countries for which data is available. that is 1. Vol. due to the more limited availability of historical data for the above indicators in some countries. Italy (-1. As a result of expectations of continued easing in housing markets. fuelled by the initial expectations of a sustained and long-lasting increase in housing demand. 1067.0%) and Poland (5. but dramatic rises in unemployment rates were observed in some countries over the last quarter of the year. as measured by the Business and Consumer Surveys carried out by the European Commission3.9%) while growth rates were lower than in 2007 and 2006 all across the rest of the EU15. Denmark (-1.2%. 1071. In the euro area real GDP growth was also 0. See Booms and Busts in housing markets: determinants and implications. 1999. M.25%. on the one hand.9%.2 points above 2007). from 4.6%). However. versus -26. after 7. Moreover. there is empirical evidence from the economic literature which shows that in countries that experience recession the adjustment of the labour market to changes in the macroeconomic environment appears with a time lag4.1 Housing Supply Developments The importance of housing supply indicators has increased over recent years. In fact.4 points above 2007). However. 2.e. the rise in house prices over the last housing cycle is explained by the impact of fundamental factors such as demographics.8% against 2. reaching 3.6%) and Latvia (15. from 1.3% in the previous year). the ECB reversed its policy and lowered interest rates by 50 bps.7% on yearly average (1.8%. Due to the unavailability of data for some countries. it was not possible to collect aggregate figures for all EU27 countries. while all the other CEECs recorded much lower increases in real GDP than in 2007. Huge increases in oil prices and other commodities over the first half of the year fuelled growing inflationary pressures which led the ECB to increase its repo rate in the euro area by 25 basis points (bps) in July 2008. the first in November by 50 bps and the second in December by 75 bps. Girouard. The dynamic effects of shocks to wages and prices in the United States and the euro area by R. in 2008 building permits decreased in all the EU countries observed. due to the ongoing deterioration of the macroeconomic environment and the dramatic developments in inter-bank lending markets as a consequence of the credit crisis.7% respectively. The strongest support to economic growth came from private consumption (though at a meagre 0.9%). the numbers of building permits. inflation in the EU27 (measured as the Harmonised Index of Consumer Prices) accelerated in comparison with 2007 due to the considerable pressures on prices in the first half of the year.8% and 2.3%).eu/economy_finance/db_indicators/ db_indicators8650_en. 6 See the Country Chapter on the United States for more details.135. but also countries which experienced economic recession in 2008 recorded very high inflation rates. The modest economic growth in the EU was due to drops in both internal demand (particularly gross fixed investment) and exports. are indicators of changes in the supply side. in Review of World Economics. while housing completions measure the most recent changes in the supply side and usually react to changes in building permits and housing starts.1% and 7. while in many other EU15 countries annual average unemployment rates also increased. Belke and D.1%). The number of building permits issued and housing starts. and Estimating the costs and benefits of EMU: the impact of external shocks on labour markets.1% in 2006. The countries which experienced a recession in the EU15 were Ireland (-2.1. ECB Working Papers no. inter alia. other new Member States. and many EU countries experienced a decline in real GDP for the first time in over a decade. it can alleviate in the long run pressures in the market and can contribute to softening house price increases. where buoyant economic growth had by far outpaced that of the EU15 in past years. Finland. It is worth noting that Germany has been countercyclical compared with other EU countries which experienced an extraordinary growth in housing supply in the past years. Nevertheless the employment outlook across the EU for 2009 worsened sharply in the last quarter of the year. taking into account a group of 8 countries for which a full set of data from 1998 to 2008 is available (Czech Republic. such as Estonia (10. However. Such corrections in activity were to some extent predictable given the preceding four years of sustained growth. and the outlook for growth and employment. by A. Unemployment rate in the EU27 on yearly average remained stable (7. Sweden). The countries which recorded lowest inflation rates were Portugal and Germany with 2.4%).5 Typically. bearing in mind that 2007 was the first year following the abolishment of subsidies which had boosted residential construction activity in 2006. http://ec. P. R. Duarte and C. by L. July 2009. As a result of their more sustained economic growth. As a result. 2006.9%. so that the decrease in real GDP was not yet reflected in the 2008 unemployment figures.1% in 2007). which sustained the economy despite the continued decline in consumer confidence throughout 2008. Bulgaria (6. were also hit by economic recession.1%). 475. Lithuania and Romania recorded inflation rates well above the EU27 average (12. It is worth recalling that. the second half of 2008 saw further weakening in economic activity. After a considerable slowdown in the first two quarters of the year. July 2009.9%). Spain. Yet. This was the first repo rate hike since June 2007. The labour markets in the EU suffered from negative developments in the general economic scenario only to a limited extent. Marques. Economics Department Working Papers No. Denmark. The former can be interpreted in terms of expected changes in the supply side.more like lower economic growth) in some countries. No.0%) and Luxembourg (-0. except for Romania where the number of building permits issued increased by 7. The global recession that hit the world economy during the last two quarters of 2008 severely affected the macroeconomic environment of the EU.0%. Poland. For example. In addition.htm See.
000 1.5% on the previous year (after a drop of 19. this signalled an increase in housing completions on 2007.1). House price growth rates in nominal terms remained positive in some EU countries. including the additional housing starts.0 4.8 in 2008.000 1998 1999 2000 housing completions building permits 16.9%9). due both to the sharp downturn in housing activity in most EU15 countries. had increased by 42. national data available for 2008 shows a general decline in values. SE) housing starts CHART 2 HOUSING COMPLETIONS PER 1000 INHABITANTS . In 2007 house 8 prices started slowing down. Chart 3 shows increases in house prices from 1996 to 2008. As far as CEE countries are concerned. such as Romania (36.3%) for the first time since 2002.8% in 2007).600 units) in 2006.6%. ES.2008 Source: European Mortgage Federation Source: European Mortgage Federation The fall in the number of building permits was more moderate than in 2007 in Sweden (-13.1%).2 Trends in House Prices From 1996 to 2008 Ireland. DK. EU 8 (CZ. before impacting on the wider economy. but accelerated in Finland (-19. SK. which is consistent with a scenario of much reduced housing completion activity. FI. This was largely the consequence of a large adjustment in the production of new dwellings as a response to the severe drop in housing demand. PL.2%). Housing starts decreased everywhere in the EU15 economies in 2008 following on from the year-on-year falls recorded in 2007.8%). The housing starts. though year-on-year decreases were recorded in 2008 in most countries for which data was available.6%) than in 2007 (8.7% fall in completions to 51.000 850.0% in 2007 over 2006) and remained far below the number of completions. 9 6| 2008 EMF HYPOSTAT Spain Ireland Finland Slovenia Netherlands Poland Estonia Czech Republic Denmark Sweden Hungary Latvia Lithuania Slovakia Romania Bulgaria Germany Luxembourg 1. and Poland (23. while most of the new Member States still recorded significant increases in housing completions.0 6.150.000 450.2% down to 22.6%). Among the EU15 countries.Housing and mortgage markets in 2008 CHART 1 Housing Supply Indicators.9 in Luxembourg (in 2007 the highest level was Ireland with 18. as a consequence of a very sustained housing activity in the previous years.0 in 2007 to 11.5%).0 0. According to EMF figures on housing completions per 1. while Spain and the UK have similar house price inflation and their growth rates are also far above the EU average. coming off the record highs in house price indices reached in 2006 which had been fuelled by the very buoyant developments in housing demand of the previous years. the UK and Spain have been the countries where housing supply responded more rapidly to strong housing demand and also the countries which recorded the strongest increase in house prices in the period (Chart 3). 1997-2008.000 650. in Sweden.6%) after recording sustained annual increases since 1999.050. See footnote 8. Signs of continuing cooling off in the CEECs housing markets were observed throughout 2008 after the record levels in house prices seen in the previous cycle. Data in the EU27 range from a value of 13. As regards housing completions. but the cooling-off accelerated again in 2008 with a more pronounced fall (-15. According to available data.000 1. Indeed. this slowdown resulted in year-on-year falls in some EU countries that were in some cases dramatic and in others more moderate. In Ireland. 2.3% in 20078).000 950.000 inhabitants in Poland.5% and 37.6 in Spain to 1. This would suggest that the “catching-up” in residential construction in the latter countries has accelerated. In 2008. which was the biggest decrease from the previous year. On It should be noted that. while in Finland the fall in housing starts resulted in a more pronounced negative growth rate in 2008 (19.852 units indicating that the tightening of housing supply is likely to continue into 2009 as the sustained decline in the construction sector in this country was also demonstrated by the 33. compared to the 2007 picture.0 10. page 11.0 12. particularly in the more mature EU15 housing markets where some year-on-year falls were reported for the first time in years.0 8. The construction slowdown translated into increasing unemployment and falling tax revenues in the first instance.0 and the lowest was Lithuania with 0.000 750. when the interest rate subsidies and the investment grants were abolished. It is estimated that 7.000 to 8. Lithuania (27.4%. and to the buoyant state of housing demand in almost all CEECs.2% and 20.3%). these falls were much less severe than for housing starts and building permits. For all these countries. where year-on-year growth was negative (-5.250. a downturn in housing activity was also recorded in Poland.350.0 2001 2002 2003 2004 2005 2006 2007 2008 . In Spain the number of housing starts fell by 41. but they decelerated sharply.000 550.0 14.5% (up to 45. France experienced a negative growth rate in housing starts (-15. housing starts fell by 53. positive year-on-year developments in completions were recorded only in Sweden (by 13.9% respectively) were less pronounced than in 2007 (39. compared to -37. the gap between the EU15’s mature housing markets and the markets of the Central and Eastern European countries narrowed in comparison to previous years. due to the fact that more severe consequences for housing activity had already been recorded in 2006 (-14. In Denmark and Sweden the decreases in the number of housing starts in 2008 (by 27. Growth rates in house prices became extremely dynamic. the sustained growth in building permits in 2006 and the sharp fall in 2007 were due to the abolishing of interest rate subsidies starting from 2007. compared to -7.500 housing starts were brought forward before the 1st of January 2007 due to the abolished subsidies.0%). Ireland outperforms the other countries in the whole period.000 inhabitants in 2008 (Chart 2). In Greece. in 2007 the decrease in housing activity had been milder (-5.4%) when the new tax regime on properties entered into force. HU. the figure went up above 4 completions per 1. above 2 in Romania and above 3 in Lithuania.0 2.000 1. The same was true for all CEECs for which housing starts data was available except for Romania. In Ireland. one of the `housing boom countries` it fell from 18.724 units in 2008.
In Germany.1%). When looking at historical data. growth in house prices.0 110. the deceleration in house prices still needs to be put in the context of the historical peaks that were recorded around the second half of 2006. Moreover. which was the deepest fall in house prices recorded in the EU27). France (-2. In 2007 Ireland had been the only EU country recording a negative growth rate in house prices (-7.7%.2 trillion Euros in 2007 (or 6.1%).3% in the EU27 and a growth rate of 1. Other examples of positive but further slowing growth rates in house prices in 2008 (following on from the deceleration recorded in 2007.4%.0 0.7%) which marked a change in the housing cycle after the stagnation observed since 2001. In the Netherlands.1 Mortgage Market Developments In 2008. from 6. once put in context. These countries recorded no harsh correction in house prices by the end of 2008. was still positive in the first two quarters of the year10.0 210.% and 7. where the drop in house prices was much more dramatic (-28. on the contrary. it should be noted that at the end of 2008 nominal house price indices remained very high in absolute levels.2% in 2007). and in 2008 the year-on-year fall was more serious (-9.8% of the EU`s GDP (51. In Portugal house prices fell by 6. on the other hand.0%) for the first time since 2004. when the new series of house price index became available (house prices fell by 4.2% fall in 2007. which represents a negative annual growth rate of 1.0 160.0 310.Housing and mortgage markets in 2008 average. In 2008.1% in 2006). These results can be partly explained by countryspecific situations. In Bulgaria. The Swedish housing market experienced a less dramatic correction in house prices than other EU markets to some extent explained by a chronic housing shortage which helped to soften the downturn in prices. growth in house prices was flat (-0. Countries that had experienced a clear slowdown in house price growth in 2007 recorded sharp decreases in house prices for the first time such as Denmark (-5. the very positive developments in housing supply recorded in previous years across the EU did not lead to an excess over demand. For more details see table 12 in the statistical tables section. although it is worth noting that this contraction was due to the exchange rate effect with the dramatic fall 10 11 of the Pound in Q4 2008 –when expressed in Pounds outstanding mortgage loans in the UK actually increased by 3.0 60.7% from 8. In addition. which left less room for speculation. the total volume of residential mortgage lending outstanding expressed in Euros in the aggregate EU27 decreased for the first time on record. and Greece (2. although not as high as the `housing boom countries` (Chart 3).9%). albeit already slowing down. According to provisional data. In these and in other EU countries. in the latter country. and this explains the positive annual year-on-year growth rate in 2008 of 0. Spain. nominal house prices increased by 0.9%) .was observed.928 million Euros)12.0 3. In the CEECs. Mortgage Markets 3.160.3% after 23. as house prices tended to stabilise rather than dramatically fall due to the general absence of any excess of housing supply in the EU.1 trillion Euros in 2008 (or 6. in 2008 Hungary experienced a housing market recession for the first time since 2004. However. residential mortgage lending in the EU27 accounted for 49.0 260.6.9%) and the UK (-0. Source: European Mortgage Federation 2008 EMF HYPOSTAT | Source: European Mortgage Federation 7 . 1996-2008 (1996=100) Belgium Greece France Netherlands UK Denmark Spain Ireland Sweden 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 CHART 4 Nominal House Prices ` Growth Rates in 2008 and 2007. More broadly. in 2008 housing indicators (both on the supply and on the demand side). which experienced very buoyant housing market conditions over the past years.2%). % Bulgaria Cyprus Germany Sweden Greece Luxembourg Italy Finland Spain Belgium Austria Netherlands UK France Hungary Denmark Portugal Ireland Estonia -40. recorded a negative growth rate in house prices only in the last quarter of the year. house prices grew more than the previous year (24. the scenario was mixed.9%) – albeit much more moderate than in 2007 (10. evidence suggests that the importance 12 See EMF Quarterly Reviews no Q1 2008 and Q2 2008 for details. a few countries excepted. a trend already reflected since the EMF Quarterly Review of Q2 2007 and reinforced in the 2007 edition of the Hypostat.1%). after the positive increases recorded in 2007 (1. Countries such as the Netherlands and Sweden had also experienced large increases in house prices.0 360.0 1996 Nominal House Price Indices. However.3%. In the Netherlands. after the 1.3%). and so did Estonia. CHART 3 410. In Austria. The slowdown in housing supply in 2007 contributed to the easing of house price dynamics. confirm that recent developments in Germany were countercyclical in comparison with the rest of the EU11.9% positive growth rates recorded in 2006 and 2007 respectively.2%.0 20. in comparison with the 11. the highest increase among EU15 countries.7% was recorded in the euro area.087.0 -10. the housing market showed signs of further vitality and prices grew by 5. the declining performance in outstanding residential mortgage lending in 2008 can be seen as a correction after recording sustained increases in the past years. Italy (1.0 -20. after years of sustained growth in prices) include Belgium (0.5% in 2007).877) to 6.5% on 2007).2%.6% from 4.3% from 5.6%). and in Sweden a year-on-year increase (2.2%.0 10.0 2008 2007 2008 -30. See Country Report on Germany for details. growth in house prices was flat (0. the slowdown in house price growth rates in the Spanish market to date since the peak in prices (Q3 2006) was significant. This decrease in aggregate residential mortgage lending came as a result of the continued general slowdown in mortgage market growth rates across the EU.0 30. a large part of housing supply was for consumption rather than for second homes.
Luxembourg (22. Eurostat Please note that.3 39.1 62. Out of the EU15 Member States. the three Baltic countries recorded much weaker performances also as a result of the dramatic deterioration both in their macroeconomic environments and in inter-bank funding over the second half of 2008.3 35. the German market saw a decrease of 2.8 99. while total outstanding residential lending volumes continued to register high growth rates in a number of EU countries. Only two out of the EU27 Member States experienced higher growth in outstanding mortgage loan volumes in 2008 than in 2007: Austria and Poland. Swedish lending figures in 2008 cannot be directly compared with earlier figures Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK n/a 26.0 Source: European Mortgage Federation. 13 although it is worth noting that this contraction was due to the exchange rate effect with the dramatic fall of the Pound in Q4 2008 –when expressed in Pounds outstanding mortgage loans in the UK actually increased by 3. Among the CEECs.8 25.8 16. Slovakia and Romania. while national data on mortgage lending as a percentage of GDP in 2008 and in 2007 are reported in Chart 5.and Germany which also saw negative growth (0.0 15. The overall EU picture was characterised by positive performances in mortgage markets for the new Member States.6 50.1 32. decreasing confidence among consumers and growing funding problems for mortgage banks.5 n/a n/a n/a n/a 23. In general.0 3.3 14.3% and 14.8 44.2008 1998 2008 25.9 46.5 38.6 Source: European Mortgage Federation. 8| 2008 EMF HYPOSTAT .5 35. The fastest growing mortgage markets in the EU15 in 2007.2 16.3 4. but that the international crisis resulting from subprime loans-originated in the US in 2008 precipitated developments in mortgage lending in the EU. due that due to changes in the official sources for statistics on mortgage lending in Sweden.5 Netherlands Denmark UK Ireland Portugal Spain Sweden Cyprus Finland Germany Luxembourg Belgium Estonia Malta France Greece Latvia Austria Italy Lithuania Poland Hungary Slovakia Bulgaria Czech Republic Slovenia Romania 0.1% (from 43. Greece (21. 2008 and 2007 Table 1 Residential Mortgage Debt to GDP ratio (%).7 n/a 53.0 n/a 16.2%13 in 2008 .7 29. the large differences in annual increases in outstanding residential lending between the mature markets of the EU15 countries and in the CEES were confirmed by 2008 figures (see Chart 6).1 12.9 23.9% respectively) was less than a half that of 2007 (31.5 20. all recorded more moderate It should also be reminded that the largely negative performance in outstanding mortgage lending (expressed in Euros) in the UK determined the negative growth rate in the aggregate EU27 mortgage lending.5 50.0 80.2 n/a 38. gave way to a combination of rising mortgage rates (up to November 2008).0 60.0 40.4 20.3 n/a 26. and Spain (13. In Latvia.6 63. all countries where growth in mortgage lending outpaced 20%.5 7.5% and 61.8 31.6 80. which were by far the fastest growing markets in the EU27 in 2008.8 11.0 100. from 2002 to 2007. slowing growth in house prices.2 49.0 51.7%). 1998 .0 120. which all experienced growth in mortgage lending exceeding 15% (with the exception of the three Baltic countries and Malta).Housing and mortgage markets in 2008 CHART 5 Residential Mortgage Debt to GDP ratio (%). only Luxembourg and Greece recorded comparable growth rates. since the UK market in 2008 accounted for 24.0 19.0 80.1%).9 6.1%).8 n/a 0. As far as national data is concerned.5 18. growth rate in outstanding residential loans in 2008 was only 6.6 EU27 33.2 9. there was some basis for believing that the EU mortgage markets started slowing down already in 2007.9% recorded in 2007).3 43.8 1.1 15. there was a noticeable slowdown in growth compared to what was recorded in 2007.3 n/a 60.0 14. marking the second annual decrease given that in 2007. where growth in mortgage lending in 2008 (10.8 95.0 20.5 n/a n/a n/a 75.4%).0% of the aggregate EU27 market. The same remarkable deceleration in mortgage markets’ growth rates was observed in Estonia and Lithuania.2 47.4%). Mortgage lending developments continued to be extremely positive for Poland.3 39. The latest boom cycle in housing and mortgage markets in the EU.2 10.4%.8%). Eurostat of mortgage lending within the EU economy has in fact grown enormously. The countries which recorded negative annual growth rates in outstanding mortgage loans expressed in Euros were the UK (-16. Total growth in mortgage lending as a percentage of GDP from 1998 to 2008 is reported in Table 1.1 29.3 n/a n/a n/a 20.9 2008 2007 60.3 n/a n/a n/a n/a 38. Moreover.0 growth in mortgage debt 1998-2008 n/a 13. EU27.0 13.9 -5.2 17.
The easing in markets continued and by the end of 2008 it led to sharp negative year-on-year growth rates in several EU markets. Growth rates in outstanding residential lending as of the end of 2008 were significantly lower than the previous year in Belgium.4% and -42. mortgage interest rates for variable rate and three common types of fixed rate (initial fixed from 1 to 5 years. in 2008 they were sharply negative in all the EU countries surveyed.e.0 30. As in the previous year. Interest Rates Developments It has been widely reported that one of the major reasons for the buoyant developments in mortgage markets in the EU over the last ten years has probably been the decline in mortgage interest rates in the euro area which started in the mid 1990s and continued into the 2000s. Despite these developments. Portugal.1%. note that annual growth rates in mortgage lending for Bulgaria and Denmark were the same as if they were calculated in Euro values given that these countries’ currencies are pegged to the Euro according to the ERM-2 (Exchange Rate Mechanism).Housing and mortgage markets in 2008 lending growth rates in 2008 (15.50% in December respectively. 12. 5. 15 and 10 bps respectively. (9. but remained at low levels if put in historical context and if considered adjusted for inflation. As regards the CEECs for which data is available.28%. Evidence of positive growth rates could be observed only in Germany (1.6% in 2008 against 7.5% in 2006). new lending activity generally started decreasing significantly across the EU on a year-on-year basis. 5. from -15. bringing it down to 2. In all remaining EU15 countries. 31. All these factors led to a shift in borrowers’ preferences towards fixedrate mortgages. in two out of the three Baltic countries falls in new lending activity were reported (14.7% in Lithuania). cuts in a row.3%).0 80.0 100.8%). new lending growth rates were negative for the second year in a row in France (-16. • please note that due to changes in the official sources for statistics on mortgage lending in Sweden. From December 2007 to November 2008. increases in mortgage rates were higher than in 2008 for all maturities. in new lending (for the definitions of lending indicators. This declining trend led to historically low levels but after Q4 2005 (Chart 7) interest rates started to increase due to expectations of an increase in the ECB repo rate.0 40. i.9%. 2008 and 2007 (%) Poland Romania Bulgaria Slovakia Romania Slovenia Cyprus Hungary Czech Republic Sweden Luxembourg Lithuania Greece Estonia Malta Austria Belgium Finland France Netherlands Ireland Latvia Denmark Spain Portugal UK Italy Germany -10. ECB monthly aggregate data for the euro area shows that in 2008 interest rates increased across all loan maturities. real interest rates remained at absolute low levels across the EU and this contributed to soften the downturn in housing markets.10% and 5. to 3. during 2008 mortgage interest rates rose in most EU countries.2.1% respectively). Swedish lending figures in 2008 cannot be directly compared with earlier figures 3.2%). it can be observed that after the peaks in new lending that were reached around the second half of 2008. In general.0 90.7%) also experienced a slump after their recovery in 2007 (of 7. Most of the increase was recorded in the first three quarters of 2008 for all maturities of mortgage interest rates.4%). Netherlands.8%) and Sweden (-11. Finland (-7.2%.0 Source: European Mortgage Federation Notes: • annual growth rates are calculated on values in national currencies. According to EMF data on representative mortgage interest rates14 (Table 19).7% in Estonia and 9. reaching 5. from 5 to 10. from-13.22% and 5. As regards major EU15 markets.25% in November and to 2. except for Austria. from -1.0 2008 2007 10. which were the sharpest declines in the EU27 (-48.0% and 4. CHART 6 Mortgage markets` growth rates.0 70. Therefore. the 2008 variable mortgage rates continued to increase more than fixed rates across all maturities. looking at quarterly developments since Q4 2007. however. This was also confirmed by 2008 figures.63%. more than 10 years) increased by 31. In 2007.6%). Portugal and the UK recorded decreases in new lending for the first time since 2003 and 2005 respectively. Italy. and then lowered it with 3 9 .25% in July 2008.00% in December. from -13.13% and their decreases on December 2007 were by 23 bps for variable rates and 5 bps for fixed rate over 10 years. 5. Finland. France. and Ireland (-31.2% and 10. 5.0 50. to 3.34%. and short term interest rates increased more than long term interest rates.8%.06%.1% in 2007) the slowdown in mortgage activity from 2008 to 2007 was quite pronounced.0 60.3% respectively).0 0. Denmark (-14.09%.75% in October. see the annexed `Explanatory Note on Data`) while these had generally been much more moderate compared to the previous years in most countries in 2007 (or even negative).0 20. The ECB raised its benchmark interest rate to 4. marking the beginning of a period of tightened monetary policy. The Bank of England lowered its rate in February 2008 and then lowered it further with four cuts in a row during the year. mainly as a result of the tightened monetary policies of the ECB and other Central Banks15. This increase in interest rates was due to expectations of further 14 15 central bank rises stemming from growing inflationary concerns in the first half of 2008. In December they went down to 5. 2008 EMF HYPOSTAT | Representative mortgage rates are the most representative mortgage rates offered by lenders on loans granted during the period (average period rate). An increase in representative mortgage rates had already been observed in 2007 and this was a trend that continued until Q3 2008 (with the exception of Q1 2008).7%. mortgage interest rates in the euro area started increasing from 2006 to 2008 as a response to the ECB`s tightened monetary action. Spain (38. As regards growth rates in gross residential loans.
03 Mortgage Interest Rates in the euro area. In Spain. to just 3. since from December 2007 to November 2008 it went down to 2006 levels. 39 bps. Spain.06 nov.03 jan. In Belgium.07 nov.03 nov. Interestingly. the share of new loans with fixed rate (and with initial fixed rate) went up from 8. While in Sweden the proportion of mortgages with variable interest rate was considerably higher in Q4 2008 than in Q4 2007 (67. CHART 7 6.05 may.03 sept.05 nov.1% of total new mortgages issued (from 81% in 2006) but it declined to 82.50 5.08 may. 139 bps year-on-year).08 mar. 1 and 4 bps respectively.06 jul.04 sept.04 may.09 .6 to 27%).08 jul. i.06 may. in Germany the share of fixed rate mortgages remained substantially unchanged on the previous year. i. According to Q1 2009 data. see Quarterly Review issues of 2007.7% to 9.03 mar.00 4. since – as a response to the above mentioned rate cut by the ECB on December the 10th – interest rates across all maturities dropped dramatically and also converged to levels ranging from 5. and also Denmark (145 bps quarteron-quarter.13% (fixed interest rate up to more than 10 years). the share of new loans with a fixed rate dropped by almost 10 percentage points (from 38. The above developments in mortgage interest rates resulted in a more pronounced borrowers’ preference for longer-term mortgage rates and for fixed mortgage rates.04 mar. Ireland (110 bps quarter-on-quarter. This trend continued throughout 2008 and.08 jan. 10 | 2008 EMF HYPOSTAT may. Initial fixed mortgage rates during 2008 decreased also in Germany (17 bps) and in Sweden (80 bps). 177 bps year-on-year) Italy (240 bps quarter-on-quarter and 133 bps year-on-year) and Greece (109 bps quarter-on-quarter and 94 bps year-on-year). As regards more recent short-term developments in mortgage interest rates in 2009.06 mar.09 mar. at the end of November 2008 – before the last cut in ECB`s central rate by 75 bps . but slightly less.22% and 5. This situation changed considerably in the time-span of a month.00 3.07 mar. fixed rates across all maturities had decreased more than variable rates.05 mar.63%) was still above the three common types of fixed rates (5. Indeed. variable mortgage rates increased by 55 bps over the same period while fixed rate also increased.06% (initial fixed interest rate from 5 to 10 years) to 5. and at the end of the same year the level of average variable rate in the euro area was much higher than that of average fixed rates. so that new mortgages issued in variable rates remained largely predominant (up to 90.08 nov.the average variable rate in the Euro area (5.50% in the euro area as of March 2009) led to substantial decreases in mortgage interest rates across several mortgage markets.03 jul.05 jul. 5. variable interest rates decreased by 67 bps from the 4th quarter 2007 to the 4th quarter 2008 and initial fixed period rates from 5 to 10 years by 33 bps.06 jan. Moreover.06 sept. as reported in the EMF`s Quarterly Review focusing on data up to Q1 200918.07 sept.50 4. the record cuts in central interest rates by the ECB in the last quarter of 2008 and also in the first quarter of 2009 (which led the ECB rate down to 1.07 may. 2003-2009 (%) Variable 1 to 5 years 5 to 10 years over 10 years may. In some EU countries a shift from variable to fixed rates could be observed from the breakdown of new mortgage loans by type16.34%. 18 See EMF Quarterly Review on Q1 2009.1% but variable rates were still prevailing.7% at the end of 2008. As a result. saw representative mortgage rates decrease by 167 bps on the previous quarter and by 96 bps on the previous year.05 jan.04 jul.00 jan.50 3.6% of new loans issued in Q4 2008).28% respectively).0% against 48. For instance.e.07 jan. there is considerable room for further decreases in mortgage interest rates over the next quarters of 2009.Housing and mortgage markets in 2008 while fixed rates from 1 to 5 years and from 5 to 10 years increased by 3 bps.00 5. During 2007.e. as long the expansionary stance of the ECB remains in place to sustain the EU economy and the credit market. during 2008 the spreads between the average variable rate and the three common types of fixed rates in the Euro area considerably narrowed.07 jul. many EU mortgage markets recorded significant decreases in mortgage interest rates both on a quarter-on-quarter and on a year-on-year basis.09 Note: Annualised agreed rate (AAR) / Narrowly defined effective rate (NDER) Source: European Central Bank 16 17 See EMF Quarterly Review on Q4 2008 for details.08 sept.04 nov. thus returning to levels observed in July 2007. in Ireland.04 jan. traditionally regarded as a `fixed rate country`.4%) In Denmark. in 2007 it reached 85. For more details. these developments were not reflected in EMF quarterly data for some other countries17.05 sept. Despite this decrease in fixed interest rates. For example.
Study on the Cost of Housing in Europe. subsidies can be directly given to the end user. the interim role played by the rental stock is missing. rental housing generates a source of income that complements other income sources. It examines the conditions which should be met so that this too often “forgotten sector” of housing policy could play a vibrant role. An additional condition. which amortize on a longer period. However. As an investment. which can be seen as an advantage in societies going through rapid changes in the structure and localization of employment. which affects the way households can manage their portfolios. thus avoiding on both sides the higher risks linked to rental: tenure and rent increase on their own side. ownership entails higher fixed costs. On the contrary. defaulting tenant on the other side.H. 20 21 2. mobility within the rental sector entails relatively low fixed costs. Third. Only persons living in countries where older tenants enjoy higher protection or benefiting from special advantages (rented social housing and housing allowances – one may not be enough!) may consider remaining tenants all their life. partly for this reason and partly because of households characteristics (low income and large families that limit choices). young adults and mobile workers need rental housing However. J. tenants’ mobility may be hindered by rent regulations which create gaps between market prices and rents paid by nonmobile tenants.1 Low-income. In contrast. Equity loans in general and equity release (or reverse mortgages) allow to “unlock the housing value” but such products are available in a limited number or countries and it is often a nascent market. at a minimum for two sets of reasons : It requires a shorter term commitment. Green. This would characterize most transition countries (20).K. Introduction This paper emphasizes the role that rental housing should play in housing policy in current situations and. huge tax incentives were granted to investors. However. These costs are highly variable between countries (figure 1). and Hendershott. or have not saved enough to meet down-payment requirements for ownership. a controversial study that linked ownership and unemployment rates in Europe has been confirmed by US data (19). P. The Framework of the Private Rental Housing Sector in Germany. Disconnecting housing property from the main residence by being tenant and investing in rental housing allows households to remain mobile. It must be acknowledged however that households with low investment capacity should generally privilege the purchase of the main residence. the rental sector is a natural outlet for households that do not have sufficient income to buy a home. Second. more particularly. The permanent need for rental housing Many governments encourage home-ownership. tenant’s mobility tends to be low also in the social rental sector. housing as an asset has the two drawbacks of being indivisible and relatively illiquid. they also consider that they will make capital gains (this is usually true because of urban growth. is to find investors that accept long term commitments. In some countries it can also be a substitute for insufficient or volatile pension systems. Housing Finance Economist. taxation systems often make this choice irrelevant (in France for example). Figure 1 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Total Transaction Costs as a % of Total House Purchase Costs Purchase Costs Mortgage Loan Costs Italy France Germany Denmark Belgium Greece Spain Hungary Poland Sweden Source: EMF (2006). there is no evidence that German households are more mobile than other Europeans. Because of transaction costs. These benefits have now disappeared but the rental stock is still here (21). Germany has a majority of tenants because. as far as social or affordable rental is concerned. and one sees young adults living longer with their parents (Italy. Young adults and the poorer fractions of the population fit into these categories. guaranteed or subsidized loans. vibrant rental markets are necessary for workers’ mobility. 2. linked to purchase and mortgage loan. A. through supply or demandside subsidies. TS. Therefore increasing the home-ownership rate is a frequent housing policy objective while increasing the tenants’ proportion is seldom one. (1999) “Home-Ownership and Unemployment in the US”. “Rental Choice and Housing Policy Realignment in Transition Countries: Post-Privatization Challenges in the Europe and Central Asia Region”. Kofner (2009). an attractive rate of return and appropriate lending. R. 19 Oswald. it more easily allows leverage of market resources and is less prone to ghetto formation. enabling the development of a healthy formal rental-housing sector is important for a number of reasons. In spite of this. First.The Rental Sector in Housing Policy and Housing Finance By Claude Taffin. Spain). as part of a stimulus plan for the economy. in the post World War II years. It coincides with a widespread aspiration of the households themselves who see ownership as a social promotion and a safety net. thus being a critical element of welfare improvement for the elderly. (1999). Among low-middle income households in particular. “The Housing Market and Europe’s Unemployment: a NonTechnical Paper. with high costs and limited choice for the consumer. UK The World Bank (2005). Ownership can thus provide negative incentives to relocate closer to jobs. In countries where the private rental market is small or declining. Unfortunately. The World Bank 1. These conditions are the existence of a balanced framework for rights and duties of landlords and tenants. In most countries. a robust rental sector is needed to give households a larger choice for asset investment. 2008 EMF HYPOSTAT | 11 . the main residence is usually too large a part of their wealth. but volatility is underestimated).
Situations are more diverse elsewhere but most of the time these rates vary a lot between the central districts and the suburbs: the overall home-ownership rate is 33% in New-York City but it is 22% in Manhattan. not the other way round. 2008. in many countries. “The Swiss Housing Market”. the data are probably biased as rental develops informally to avoid taxation or tenant oriented legislation (Poland). Charles Boycott became famous for being ostracized but few people Source: Peter Kemp. M. according to S. The nightmare is not always for tenants only: for owners it is called rent control. As a result. Swiss Finance Institute. If there is any correlation. This is not a British speciality as France also has its Mr Vautour. 12 | 2008 EMF HYPOSTAT . is now a synonym for exploitation of tenants. from Peter Rachman. Raising home-ownership rate is a posted policy objective in some countries (France) but lowering this rate can be now one too. this is at least the case in Spain. as maintaining a large. which is the US average (23).5 %. implying affordable. for example. Figure 3 provides an overview of EU practices.3 The perverse effects of rent controls The rental sector often has to overcome the consequences of past errors. 46% in Queens and 68% in Staten Island. or 12% in Berlin.The Rental Sector in Housing Policy and Housing Finance 2. as illustrated by the cases of Germany and Switzerland (22). it is a negative one. 23 24 Furman Center for Real Estate and Urban Policy. “The Political Economy of the New Left” (New York: Harper and Row). the tenants are concentrated in urban areas. Rachmanism. New-York University (2009).2 Rental is the dominant tenure in larger cities Rich countries do not necessarily have high home-ownership rates. with the only difference being that the character was created after the name. Bourassa. Hoesli and D. Scognamiglio (2009). If they carry out rental projects. No finance is therefore available for investors in rental housing and developers do not often embark on this activity. A result of this imbalance is that. remember that it was because he mistreated tenants. the average owner occupation rate is more than 70% and Germany is now the only country with a majority of tenants (See Statistical Table 4). This happened. In this case. not only maintenance but also private investment may stop. Research Paper Series nº 09-16. sometimes for decades. up to a point where the size of the sector decreases. In the European Union. in the United Kingdom after drastic rent controls were put in place in the aftermath of World War II (Figure 3) and justifies the statement that “in many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing” (24). although not always explicitly.1978) 3) Reasonable rent calculated 4) Paris and suburbs only 5) Optional 22 37. Homeownership rates are as low as 14% in Geneva. Figure 2 Privately renting households in England Number of households Percentage of all households 2. rental sector requires the financial involvement of governments. they act more like builders than developers. In the countries with a large majority of owners however. rental housing is an unprofitable and risky investment. In many parts of the world. Newly rented dwelling Free Other New Tenancy Free Yes Yes (3) Yes Yes Yes Yes Yes Yes (2) Yes (1) Yes Yes Yes Yes (5) Yes (5) Yes (2) Yes (3) Yes Yes Yes Yes Yes Yes Yes Yes (4) Reference Index Other Yes (3) Yes Yes (3) Free Renewal Reference Index Other Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Portugal United Kingdom Yes (1) Yes Yes Yes Yes Yes Yes Yes Notes: 1) Except for subsidised dwellings 2) Administrative setting (Law equo canone . Assar Lindbeck (1972). it is normally because they have been commissioned to do so by investors or public authorities.
Also. However.000 and 50. The most recent ones reached between 60. Their major requirement was that the property should remain rented for a minimum period of time (from six to nine years). Moreover. several cases are met: free rent. 140 000 Renewed lease (same tenant): indexation can be used in addition to the free 120 000 and the reference-linked rent. cases of cross investment (two households renting to one another instead of buying their own unit) may also have occurred. such as a new rent index. gross residential rental income is usually lower. steadily decreasing. Documents that should exist in a written form (contract/inventory/notice to pay. all or part of the legal framework is often embedded in the Civil Code. Rent setting and rent increase are key issues. local justice…). Figure 5 New rental units (newly built or newly used as a rental unit): the rent tends to be freely negotiated: New tenancy (change of tenant). management. As a result. several schemes have been introduced in France since 1984 to encourage individual investment in newly-built housing for the rental market. the various costs (maintenance. Because the private rental housing stock was 60 000 40 000 20 000 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2007 Source: Association of Builders-Developers (FPC).The Rental Sector in Housing Policy and Housing Finance Rental is usually “forgotten” by housing policies because governments are reluctant to tackle this issue: launching a new subsidy plan for home-buyers is easier than changing the balance between tenant and landlord rights and duties and is thought less costly than alleviating taxes on rented property. Their long-term impact on the rental sector is less clear. How to ensure an attractive rate of return Any investor will compare rental investment to other forms of real estate or financial investment by considering the three following criteria: Total return (rental income and capital gain).000 and 70. 2008 EMF HYPOSTAT | AII IPD Europe 13 . Any investment in real estate faces a number of risks. the income return of residential property compares very unfavorably to other real estate properties (Figure 4). He will unfortunately reach the conclusion that this comparison is not often favorable to rental housing.000 (Figure 5). These schemes did succeed in supporting the building industry and increasing the housing stock. Liquidity. A long term-investor will focus on the rental income. It is estimated that between 30. Procedures for solving conflicts (conciliation. Potential difficulties (entailing costs and delays) in evicting a delinquent tenant or recovering the property vary from one country to another as they are influenced by the legal and regulatory framework that regulates relations between tenants and landlords. their location and the size of the units also seem to be questionable. Compared to other real estate investments (retail. Stability and adaptability (stable law is needed but local adaptation is necessary). Rent setting & rent increase (see below). thus costly. public or private. During the lease: indexation or no increase. is also a bigger risk in the residential sector. office and industrial). an important proportion of units were sold after the minimum rental period. Insurance products. exist that provide a partial coverage for the rental risks mentioned above. Distinction should be made between: Germany France Denmark Sweden Austria Finland Netherlands Switzerland UK IPD Eurozone 2006 Source: IPD (2009). Risk(s).000 units were sold each year to investors under the first schemes. they are little used. rent adjusted according to « references » or « reasonable rent ». Sine qua non to boost rental housing: Creating or restoring a balanced framework for rights of tenants and landlords The main items to be included in this framework are the following: Definition and description of the housing unit (main residence / unfurnished / …). taxes and fees) that lower this gross income are also higher for residential properties. to quit). However. These schemes proved to be more efficient (in terms of number of units sold) as they were free of constraints such as rent ceilings or tenants’ income limits. Moreover. The quality of the buildings. Figure 4 8 7 6 5 4 3 2 1 0 Income return by type of property (Year 2008) Retail Office Industrial Residential 3. Duration & termination of the contract (limited fixed term / renewal / termination). The main uncertainty concerns rent collection. Not only the Housing Department but also the Justice Department should thus be involved in any revision of the law. some of them were either secondary homes or units to be occupied by relatives. 100 000 80 000 Share of investors’ purchases in developers’ sales in France (1995 – 2007) Investors Owners 4. Governments willing to support rental investment may resort to tax incentives in order to increase the rental return. Changes in this framework. mediation.
Both factors increase the risk premium. as it is often seen as the market segment where the US sub-prime lending developed (25). due to the economic crisis. Lending for multifamily rental projects is very different from retail lending for ownership or rental. artificially low rents that stunt mobility. as they proved to be better targeted and more flexible. As a business line. etc.5 times the IPREM (31. Rental investments have been a significant minority of sub-prime lending in the United States in cities like Miami. increased purchasing power. there has been no new investment in public social housing since 1965 but a new tax subsidy. In spite of the expected rent payment. etc. They may also have high loan-to-value-ratios.8 MBE 100 Euros 10 / 25 Years By “social” we mean “affordable”. These “prestamos convenidos” .) and higher level governments only provide subsidies and guarantees. They are (very) long term.5 and 4. Poland) and housing funds (Finland. unlike an individual investor. In France. Concerted regime: between 4. Notes: IPREM: Indicator Público de Renta de Efectos Múltiples (Index used to calculate social benefits). Austria) remain widespread but they only finance registered social housing providers. In many countries.5 times the IPREM (45. the subsidy scheme for home-buyers has been recently modified and. On the other hand. Some governments may also be reluctant to favor low-income home-ownership. These obstacles have already been mentioned about rental housing in general. it is less subject to automated procedures of loan approvals and other refinements that have facilitated the development of mortgage lending. In the few countries which remain deeply involved in social rented housing (mainly in Central and Northern Europe) the private sector now plays a dominant role under various forms: ALMOs (Arms Length Management Organizations) in the UK. more precisely. < 2. In the latter case. low interest rates and price increases helped lending for rental to develop. in some cases (Germany. are more and more privileged. In the European Union. in case of difficulty. No standardized debt instruments or financing process exists and multiple funding sources are common. Czech Republic). the interest rate is equal to the 12-month Euribor plus a 65 basis point margin. unemployment risk rises and underwriting criteria get tighter.5 IPREM 1.5% (25 years) or 5. Those who could nonetheless afford buying are incited to wait for house prices to plummet. Their minimum term is 10 or 25 years. culture of non-payment. it may be in vain in a period when purchasing power decreases. Supporting new home-buyers only could be considered for its faster impact on economy. it is closer to project finance. That is also the case in France where the often blamed system consisting in transforming short-term deposits on savings accounts into very long-term loans to social housing companies takes advantage of this stable and low cost instrument. which makes it difficult to raise matching funds.472 Euros). 14 | 2008 EMF HYPOSTAT . often more than 30 years. Unfortunately. MBE: Módulo Básico Estatal (Reference price in Euros per m2). Local governments may be involved through Public. 25 6. The property must be rented during a minimum period of 10 or 25 years and the rent per year must not exceed 4.5 IPREM 1. they know that this type of lending is risky as.2 Lack of ad-hoc finance This is a key issue: how to make finance available to rental housing in times of credit crunch when it is even not available in other times? The few countries which are still using non capital market-based finance have a big advantage. called housing allowances in Europe and vouchers in the USA. reduces the risk to the lender. The 10-year rental agreements can include a right-to-buy option at a maximum price of 1. on the contrary.loans resulting from an agreement between the Ministry of Housing and the lenders – have a fixed or variable rate. governance issue. Moreover the risk is spread over a number of properties.450 Euros). specific difficulties appear. at least considered. social mix. public banks (Netherlands.427 Euros). However subsidies to investors (“aid to brick and mortar”) have not disappeared. It may be more difficult to finance a rental investment in an old building if its location or quality is questionable. depending on tenants’ income: Special regime: less than 2. the investor will more easily relinquish a property he does not occupy than his own residence.The Rental Sector in Housing Policy and Housing Finance In Spain. many but far from all subprime borrowers were low-income first-time buyers. for the first time extended to rental investment. In fact. The increased need for affordable rental in times of crisis There is a permanent need for affordable rental housing and.5 to 6. In the recent years. NL) and.P. the demand for affordable housing is on the rise.P. the PD (probability of default) is low. as it relies heavily on the examination of the cash flows generated by each particular project. lenders will be reluctant to finance rental investments. Therefore rental housing should be if not prioritised.5 and 6. as single family housing is easier to build and finance than multi-family.PrivatePartnership (P. It has three regimes. supports privately-financed and managed rental housing projects. not only do a number of countries face a temporary need for supporting housing construction but also.5 MBE 10 / 25 Years 2.5 times the IPREM (17. Public investment and management has been common in socialist economies and West-European countries in the post World War II years. Direct subsidies to low-income tenants. UK. Developers may get subsidies for the special (250/350 Euros for 10/25 years) and the general (250/350 Euros for 10/25 years) regimes. The investors may benefit from preferential loans. standard legal or natural persons. The subsidies below are linked to the repayment of these loans: Income Bracket Maximum Reference Price Yearly Subsidy (for each 10.5% (10 years) of the maximum reference price. When social housing is concerned.5 to 4. lenders easily finance individuals investing in new rental housing because investors benefit from important tax subsidies (above) provided that the property is rented and a rent is really paid during six years minimum. The poor outcome of public rental housing is well-known: ghetto phenomenon. whereas the LGD (loss given default) is high.000 Euros borrowed) 350 Euros Rental Period In particular loans to finance social rental housing have specific features which may pose problems to market players.1 The bad reputation of “social housing” 3. but several obstacles must be overcome that include bad reputation and lack of ad-hoc finance. Hence the risk of such loans is often overestimated.6 MBE 250 Euros 10 / 25 Years 6.). the Low Income Housing Tax Credit (LIHTC). General regime: between 2.5 IPREM 1. In the USA for example. 6. As such. non or limited profit adhoc organizations (France. They often hide its successful achievements (disappearance of slums.7 times the maximum reference price and at least 30% of rents paid should be deducted from the price. Market lending for rental housing Individual investors may not easily find credit for rental. a part of the rent is usually paid by the State through housing allowances which. 5. not “public” housing.
Affordable rental housing is always needed for low-income households and mobile workers.000 USD 0% loan program doubled in volume in 2009 600 M Euros 100 000 additional social and « intermediate » rental units 600 M Euros Housing and community development spending (affordable rental housing programs: LIHTC. Up to 1.3 Lack of investors The specialist investors dedicated to social housing only exist in a few (developed) countries and it is unrealistic to create some from scratch in the short term in the countries where they do not or no more exist.). In case of market failure and in times of crisis. This should not be a substitute but a complement to the support to home-buyers. encouraging investment in affordable rental housing will support both the building sector and the needy households.P. Next. Figure 6 Main measures of stimulus plans to the housing sector in France and USA and their fiscal cost France Home-ownership USA Tax credit for first-time home-buyers Rental Up to 8. the risk (and the liquidity) of the housing investment should be comparable. In most cases. when they exist.P. allow rent increases. Only large well-functioning rental sectors are likely to provide such accommodation. especially when central. Some temporary tax benefits would surely boost this activity provided that it clearly appears to the potential investors that it is low risk. etc.500 USD per unit 1. the GDP of USA in USD was 7. as can be illustrated by a comparison of the French and the US stimulus plans (Figure 6). an even playing field with other investments. They are unlikely to invest in social housing unless they are granted important subsidies for limited commitments. These prerequisites should enable investors to have better access to market finance. The necessary adjustments should be made through taxation and insurance products. they invest in commercial real estate and there are only a few funds exclusively dedicated to residential investment. (private-public partnerships) are now privileged. Public housing improvements 6. As public housing has often proved to be inefficient.5 Bn USD 2 Bn USD Note: In order to compare the order of magnitude of these programs. such as the US Real Estate Investment trusts (REIT). the intervention of municipalities could be considered: most of the new Polish social housing companies (TBS) are non-profit private companies owned or dominated by the municipalities. should be found so that the return. financial or real estate (due to high management costs inter alia). real estate and financial products. Though the direct involvement of the Government is not either recommended. one may use a ratio of 7 (in 2007. Institutional investors. the main target is therefore the households themselves. several countries have similar structures (26). 7. They are likely to overreact to short-term incentives like tax subsidies (whereas institutional investors would make a rational use of discount rate) but should not be expected neither to house very low-income nor commit themselves for many years. Households can be direct investors or buy shares of investment trusts. 2008 EMF HYPOSTAT | 15 . are usually not prone to invest in housing at all because the couple return/risk compares disfavorably to most other assets.1 Bn USD Speeding up of the program of urban renovation 200 M Euros 4 Bn USD Other Fund for unfit housing and energy expenses Homeless prevention funding 200 M Euros 160 M Euros Tax credit for making homes more energy efficient Homeless prevention funding Neighborhood Stabilization Program (To help states and cities deal with foreclosed properties). Besides registered social landlords. “Housing Finance Policy in Emerging Markets”. as the French experience has shown. chapter 14. they may on the contrary cumulate their drawbacks. accelerated procedure (arbitration committee) and property recovery by the landlord. private non-profit companies or P.3 times that of France in Euros). In the EU. 26 See The World Bank (2009).The Rental Sector in Housing Policy and Housing Finance 6. Conclusion Developing rental markets in general first requires improving the legal framework: it should be simple and clear. These vehicles do not easily find the right balance between the financial and the real estate market: while they try to cumulate benefits from both. not local governments were involved.
and being joined by pretty much every other European country by the last quarter of 2008. Lenders and consumers feared impending large price falls. few would have believed that problems in what was at that time an obscure part of the US mortgage market would shortly bring Europe’s then buoyant housing markets to their knees. However. Recession and depressed economies then compounded the problems. the greatest falls have been in Ireland and the UK (23% and 21% from the peaks by summer 2009. University of Reading 1. 1996 Q1 1997 Q1 1998 Q1 1999 Q1 2000 Q1 2001 Q1 2002 Q1 2003 Q1 2004 Q1 2005 Q1 16 | 2008 EMF HYPOSTAT 2006 Q1 UK 2. Particularly large rises occurred in Denmark. Features of the boom Source: IMF . Predictions of ‘soft landings’ instead were fashionable. when European markets exhibited greater volatility. they were associated with marked increases in the role of mortgage finance. What has surprised some is that the downswing in most countries so far has been nothing like the scale of that in the USA.html. there was by no means a uniform pattern but all the same in many countries during the boom years prices rose by significantly more than in the USA as a whole. such as Ireland and the UK. shorter. so. Austria. suggesting that the worst may be over. Consequently. Germany and Switzerland were exceptions and the precise details of timing and scale of the price increases varied across the countries experiencing price booms. while lending and market transactions dried up. In some countries. where the much quoted CaseSchiller index showed a fall of a third in house prices for the leading city composite index between June 2006 and April 2009. all of which increasingly tapped into world capital markets to fund mortgage growth. This article will explore why most of Europe’s housing markets seem to be escaping the scale of the collapse in the USA and dire warnings of essential corrections. according to the Permanent tsb/ESRI and Halifax indices). the Netherlands. The pattern for the largest EU countries is shown in Figure 1.Overcoming the crisis in European housing markets By Michael Ball. Although uncertainty continues. Prices have fallen: starting in 2007 in some countries. Spain and the UK. highly regarded mortgage bond market but the other four relied heavily on mortgage-backed securities. when measured as a share of annual GDP (Figure 2). European house price falls may generally turn out to be shallower. Denmark already had a long-established. several of the continents’ housing markets were experiencing price revivals by the summer of 2009. Q1 1995 to Q4 2008 UK 1996 Q1 1997 Q1 1998 Q1 Germany 1999 Q1 2000 Q1 2001 Q1 France 2002 Q1 2003 Q1 2004 Q1 Italy 2005 Q1 2006 Q1 Spain 2007 Q1 United States 2007 Q1 2008 Q1 2008 Q1 Source: IMF Source: IMF Figure 2 120 100 80 60 40 20 0 Mortgage debt to GDP ratios. Central and Eastern Europe joined in the price boom somewhat later in the 2000s but then saw some of the most spectacular price rises. Professor of Urban and Property Economics. This is in marked contrast to experience over the previous 35 years. Those previously complaining of house price ‘bubbles’ and the need for sharp house price ‘corrections’ felt vindicated. Consequently. and even more regionally concentrated than in the USA. Ireland.unece. the future is by no means all brightness and. But the subsequent period of financial turmoil hit Europe’s housing markets at one of their most vulnerable points. which though new to Europe grew rapidly from 2000 onwards to peak at almost 600 billion Euros in 2008.org/hlm/prgm/cph/countries/georgia/welcome. it will consider some current risks and uncertainties as well. 1990 and 2006 2006 1990 Austria Canada Finland Germany Ireland Italy Norway Australia Belgium Denmark Netherlands Sweden France Japan Spain From the late 1990s through to 2007 house prices in most European countries rose strongly. including some countries that never experienced the previous boom. Other features of the housing boom years varied across Europe as well. Figure 1 25 20 15 10 5 0 -5 -10 -15 1995 Q1 Annualised house price changes. Introduction A little over two years ago. mortgage availability. Figure 3 Residential investment as a % of GDP UK Germany France Italy Spain 10 9 8 7 6 5 4 3 2 1 0 1995 Q1 29 http://www. Outside of Iceland and some Central and Eastern European countries.
What is more. 3. and potential data weaknesses. or even city. many other countries saw only modest changes in mortgage to GDP ratios. Other analyses place faith in a believed stability of some fundamental ratios. governments and central banks have responded in different ways to the economic and financial crisis. A downward spiral of declining lending. Deleveraging led to widespread withdrawals from mortgage lending by erstwhile lenders and sharp curtailments by others. They differ from more complex housing market models by having incomplete theoretical underpinnings. falling house prices. relating to general economic performance. They may be useful by offering starting point for discussion over differences between housing markets but cannot. for example. estimate the coefficients for individual countries using the available data. economic and financial factors. the UK and Ireland had the greatest number of problem institutions but few countries emerged unscathed. Some of them directly affect housing markets. Ireland and Spain had by far the biggest housebuilding booms. declining inflation for much of the period. In addition. nevertheless. with the market driven primarily by speculation. This is especially the case as consistent and robust housing market models do not exist with which to compare the detailed dynamics of housing markets across European countries. like the UK. 4. But others were more country. This had a downward effect on general economies through cutting aggregate demand. while it may be salutary to sound off against the foolishness of one’s fellow human beings. As is well known. Developers were simultaneously hit by a sudden loss of demand and a drying of much needed bank credit with which to run their businesses. missing variables. but marked increases in prices. there was greater than usual co-ordination in cycles but still much variation caused by local factors. that had relatively low housing outputs. because what goes up must come down in such a perspective. with the Irish figure peaking at 13% of GDP. Unsurprisingly. fears were high throughout the last quarter of 2008 and 2009 that the spiral in European housing markets would become self-reinforcing. By contrast. Yes. taxation.Overcoming the crisis in European housing markets However. reckless lending and over-optimistic expectations led to bubbles in many European countries during the boom. This is not simply due to housing market factors but broader institutional. The impacts were greatest in those countries which had the highest GDP shares of housing investment. demographic. They also contain a variety of variables and integrate stocks and flows: that is general housing demand and supply across the whole stock with current market behaviour. any stability over time has to be explained rather than taken as datum. They are worth considering briefly because each would predict severe house price falls across much of Europe: ones that in the main have not occurred to date. and real interest rates declines. it is unlikely to be a full explanation. housing is a costly transaction. then. They faced sudden liquidity calls which could not always be met. Once again. So. What is more. the penalties for failing to keep up with mortgage payments are far higher than in the USA. average rates of interest charged on mortgages in the euro area fell from a peak of 5. Unsurprisingly. but they have been felt even in countries. even so there was not a particularly close correlation between scales of house price changes and increases in mortgage debt ratios. housebuilding plummeted across Europe. and they have had the further inducement of being able to lock-in good rates for long periods to come. Looking at Europe as a whole. there was weak correlation between the extent of house price rises and levels of housebuilding. Yet.or undervalued at a point in time and likely to experience ‘correction’. General government stimulus programmes to revitalise economic growth even if not directly channelled through housing boost housing demand when they work. For example. a number of alternative views tend to dominate popular and media discussion of house price dynamics. housing demand. by themselves. Increases in mortgage borrowing obviously give buyers greater purchasing power. European countries have automatic stabilisers when their economies start to slide. ones that are relatively strong given the strength of welfare states. some countries saw little or no rise in building at all. They were active in now frozen asset-backed security and derivative markets. housing policy. job protection and unemployment pay schemes. governments have offered extra mortgage default rescue programmes and provided inducements to encourage new property purchases. A further key difference from the USA is that housing market problems there preceded the general financial crisis and recession. Housebuilding increased in countries experiencing rising prices but again at different rates with limited correlation with changes in house prices (Figure 3). In contrast to such approaches. although the precise impact is hard to measure. Developers can also usually pursue through the courts with relative ease those wishing to walk away from deposits made on flats off-plan in better times. One view emphasises expectations and beliefs as the most important market drivers. These have helped all borrowers on variable rate mortgages but also improved capital market rates have benefited new buyers and re-mortgagers using long-term fixed interest mortgages as well. European governments were forced to make widespread capital injections into the financial systems and several lenders collapsed or had to be rescued. they are by no means immutable constants. Expectations may play roles in housing markets but. The well-specified models that do exist tend to be country-specific and complex. adequately evaluate or forecast what is actually happening.95% in July 2009. regional and city comparisons reveal wide cross-sectional variations in them. So. and local supply-side issues. Ireland and Spain. with income support schemes which dampen the scale of mortgage default. Economic theory would suggest that both mortgage lending and housebuilding would influence housing market performance and they obviously did during the long European housing boom up to 2007. These include house prices-to-incomes or housing outgoings as shares of disposable income. With respect to the last boom. they neither explain why the estimated values are appropriate nor why they represent long-run equilibrium values. Similar weak correlations were observed between house prices and supply-sides. negative equity and mortgage default seemed inevitable. hence. as it had become in parts of the USA. according to the ECB. However. After the collapse of Lehman Bros. the picture of the boom years is one of considerable variation across Europe. Outputs from such models include estimated ‘equilibrium’ house prices that can be used to calibrate whether actual prices are over. some influences are global: such as the general easing in credit. they were bound to be badly affected by the credit crunch. Bottoming out There are several reasons in principle why European housing markets may adjust relatively quickly to sudden negative shocks. A further problem was associated with housebuilding. a long-term consumption good and prime household asset. the same is occurring in the downswing and will continue to do so in the revival. While some justification can be drawn from historical evidence on these ratios. These approaches are sophisticated variants of the fixed ratios one and. demographics. Divergences from given values of such ratios consequently do not necessarily indicate the need for a subsequent re-adjustment. Unsurprisingly. their importance cannot be simply read from relative changes in house prices across countries because they were only part of wider causal processes that affect housing markets. notably the Netherlands and the UK. Predictions are easy. For example. so it is unlikely that purchases are made just on a hunch and a whim. utilising distinct policy instruments with varying effects on housing markets. According to it. Attempts by the ECB and other central banks to stimulate lending by asset purchase schemes and ‘quantitative easing’ have further helped mortgage markets and. it is inevitably hard to map and understand the details of crosscountry housing market dynamics. This meant that it was far easier for European policy makers to put in place timely actions with respect to their housing markets. like them. Those could not stop the crashes but could contribute to limiting their strength and persistence. specific: for example. Belgium and France recorded significant house price growth prior to the Credit Crunch but little change in pre-existing low mortgage to GDP ratios. 2008 EMF HYPOSTAT | 17 . The greatest stimulus to housing markets has come through monetary policy and associated sharp reductions in nominal interest rates. As housing mortgages are the largest category of consumer lending. Fears of falling house prices and rising defaults added to the problem. The dramatic shock of the Credit Crunch European banks have been some of the worst hit by the credit crunch. whereas they were more closely timed in Europe as housing market downturns occurred later. A final approach which grew in popularity during the boom years is to specify simple dynamic models of housing markets with limited but common sets of demand-side only factors and. tightening loan-to-value ratios (LTVs). giving borrowers less of an incentive to default. Cross-country.71% in September 2008 to 3. They invested heavily in what are now known to be near worthless ‘toxic’ assets. particularly as the pace of the output collapse was so rapid.
which will weaken credit availability and raise interest rate spreads on a long-term basis. There are a number of inherent reasons why housing markets are subject to fluctuations and cycles. 5. competitive markets remain the most likely hope of meeting consumer housing needs efficiently and fairly. the patterns of which are difficult to predict over the short-run. 18 | 2008 EMF HYPOSTAT . moreover. Competition amongst financial institutions is much diminished and they will face far greater costs of doing business. An uncertain future Housing markets may be recovering somewhat but the future remains uncertain. so that all players in housing and mortgages will have to adjust to greater market volatility. as in the boom years.Overcoming the crisis in European housing markets Precisely how housing markets are currently faring depends on local and national circumstances. It may be unfortunate if current policy debate focuses unduly on the apparent benefits of house price increases as a sign of recovery or on promoting housing market stability. wasteful tax breaks and distortionary vote-winning policies are rife throughout European housing markets. Missed opportunities? By focusing on financial markets as the cause of current housing problems. After all. Appropriately regulated. the full ramifications of the collapse of its long economic boom are only slowly being worked through. House price rises at best have zero-sum outcomes and. Elsewhere. The regulatory future is still under debate and outcomes could have markedly adverse impacts on housing markets. with insufficient calculation of the true cost and benefits of them. Yet. Rather current events may lead to even greater housing and mortgage market distortions in the name of claimed impacts on economic recovery and social justice. For example. More to the point. failure to address housing market distortions may make another bout of boom and bust much closer than it may otherwise have been. perilous public finances and a glut of unsold homes and. General economic recovery is fragile as are financial systems. such as first-time buyers. Supplied-side constraints. in some of the large. show that far too little housing is being built. the economic recession seems to be ending and with it housing market gloom. which are also reflected in tumbling house prices. much-promoted policies aimed at tightening mortgage lending criteria or raising provider costs may inadvertently weaken competition and penalise vulnerable groups. in Spain. one person’s price rise is another’s worsening affordability. so. What is clear is that the last boom was one of the longest and strongest on record. Housing markets are still operating at reduced levels but activity is picking up and some price buoyancy is being experienced. Programmes to replace lost funding sources for mortgages and to build up confidence in European mortgage instruments in the world’s capital markets are often at best in their infancy. Taming the real estate cycle may be a wish-too-far and in any case one that imposes unreasonably high costs. 6. Second-home locations in Spain that earlier saw high levels of foreign demand now are enduring widespread abandoned developments and holiday home owners trapped with declining asset values. even if it is unlikely to be of the scale of the past few years. policy makers are shying away from much needed reforms to housing markets themselves. one. core European economies. The Baltic States are experiencing grim times. An oftencherished hope is that a crisis of the sort Europe has been experiencing might help to induce reason by exposing housing market fault lines but this is not happening now. The very shallowness of current house price declines in many countries may itself reinforce views that housing is always a safe investment: rising in value over time. the scale of past foreign currency mortgage borrowing is dampening prospects for housing markets. and unlikely to be repeated soon. Throughout central and eastern Europe. Ireland faces severe problems of economic adjustment. at worst. that can be used as a political pawn without too many negative ramifications. is in particular difficulty.
24 6. in 2008 housing activity in Austria continued its moderate recovery after having been quite flat since the late 1990s. Central Bank of Austria. € 000s Total value of residential loans. 2008 2007 0.32% in 2008. which kept increasing in 2008 since developers were still driven by expectations of further rises in house prices.8% 1.8% 3.2%). was 3.2%.8% of total outstanding residential lending (it was 6.070 3.3% 66. measured as the annual increase in the Harmonised Index of Consumer Prices.3% 8.EU27 country reports Austria By Alessandro Sciamarelli.e.7%. This was the third highest annual growth rate in outstanding mortgage lending recorded among EU15 countries in 2008 (after Luxembourg and Greece).2% 57.8% 12. one percentage point higher than in 2007. in 2002 there were 42. This change in the housing market cycle was not reflected yet in residential investment.8% 6.8%).4% 2.346 million Euros. Real residential investment increased on the previous year by 0.2% Source: EMF.0%). Eurostat. but slowed down visibly in comparison to 2007 (when it increased by 5.3% 11. another consequence of the downturn in the international macroeconomic environment. Representative mortgage rates for house purchase rose from 4.2% 57.9% to 25.0% 23.6%).79% in 2007 to 5. In terms of percentage of GDP.8%).7% 3. Statistics Austria Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data. Outstanding residential lending rose to 71.914 housing completions.928 0. according to the latest statistical figures available.8% 49. Contrary to the flat developments in housing investment which were observed in recent years (real residential investment grew by a mere 0.0% 5.3% in 2007).0% 25. EU27. outstanding residential lending also increased from 2007 to 2008 (from 23.3% 5. As far as housing supply indicators are concerned. The strongest contribution to GDP growth came from final demand (which increased by 2. 2008 EMF HYPOSTAT | 19 . which was a remarkable increase on 2007 (9. Funding Covered bonds outstanding in Austria amounted to 8. However.281 building permits and 41. Austria.8% 3.346 0.3%). € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Austria. and the only negative contribution to GDP growth came from imports (-0. Nevertheless.56 71.82 65. The unemployment rate decreased from 4. the economy of the country performed better than most EU15 economies.395 million Euros. Austrian housing prices recorded rather buoyant increases in the same period (a 3. no official figures on the housing stock and tenure have been provided since that time.0% 3. i.7% 4.9% 7. while all other GDP components provided a weaker one.8% 4. Housing and mortgage markets According to OECD data. this positive cycle came to an end in 2008 so that the housing market did not record any increases in average house prices that year.4% in 2007 to 3.1% 7.9%).1% in 2007).8% (following on from 3. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita. GDP increased in real terms by 1. EMF Macroeconomic overview The Austrian economy slowed down in 2008. Austria= 2003.8% in 2008. in line with what was recorded in 2007 (0.087. Exports still increased on the previous year (1.9% annual average increase between 2005 and 2007). Due to a change in the census method. The inflation rate.5% 21.3% on average between 2005 and 2007). ECB. accounting for 11.
partly as a result of the slowdown in activity.5% 1.8% 49. against 1.5 Euros per square metre.383 8.3% (-0. The number of mortgage loans granted.126 0.0% and amounted to 34. Having reached an average annual growth rate of almost 10% from 2004 to 2006.0% 39.3% 5.4% (-1.7% 7.509 Euros.7%) compared to the second half of 2007.EU27 country reports Belgium By Frans Meel. The average amount of mortgage loans for renovation purposes dropped by nearly 3. In 2008. «loans for house purchases» represented 46.8% 12. Belgium. In contrast to the abrupt correction seen in some EU countries.0%. It should be recalled. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Belgium.7% (1. EU27.176 Euros. The level of new credit granted (refinancing operations excluded) during the first half of 2008 was slightly above the 2007 level (2. in absolute terms. the average growth rate in average house prices gradually slowed in 2007 and 2008.5% 21.8% 11. Land prices rose by 4% in 2008. the total amount of new mortgages granted (refinancing operations excluded) decreased by 2. grew considerably (3.5% drop was recorded over the previous year. mainly due to much weaker activity in the 4th quarter. economic growth was weaker than in 2007.2% Sources: EMF. However. In 2008 the trend was reversed when Debt to GDP increased once again from 84% in 2007 to almost 90% in 2008. the market share of fixed rate mortgages (with an initial fixed period of more than 10 years) accounted for 83% in 2008.24 6. In contrast. of 83.8% 1. for an average cost.2% compared to what was recorded in 2007 (following a 3. The price of a single family home rose on average to 315. but yearly GDP growth was still positive (1.2%) of the amounts granted. against a 2. which corresponded to 58.5%).1 percentage points difference in inflation rates between Belgium and the EU15.0% on a year-on-year basis.0% 4.928 0. there had been an 8% increase on 2006.5% (from 1. that the first two quarters of 2007 were very weak compared to the same quarters in 2006.3% in comparison with 2007) of the number of contracts signed in 2008.9% n/a 66.0% increase recorded in the previous year) and investment in construction of new houses and renovation of existing houses (1. The results of the second half of 2008 recorded a sharp decrease (-6. the macroeconomic slowdown caused the government to abandon public debt reduction targets.8%.0% 3. which is only half the increase recorded in 2007.0% on a year-on-year basis. instead. The surge in energy prices explained the 1. As far as preliminary data for the first quarter of 2009 would suggest. the Belgian harmonised index of consumer prices recorded one of the steepest increases in recent years: an annual average of 4. However.0% 36. compared to 3. so that Belgium’s stability programme target was not achieved.1%). during the last quarter of 2008 the market share of fixed-rate mortgage loans dropped by 10%. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita.5% instead of 1.1% 2. Union Professionnelle du Crédit Macroeconomic overview In 2008. this figure reflects a steady deterioration during the year and an outright collapse of economic activity in the fourth quarter. this trend was set to continue. Belgian Debt to GDP ratio had been in continual decline since reaching a peak in 1993 (133%).8% 78. slightly increased (0.3% of GDP (in 2007) to 1. In Belgium.9% as a proportion of loans granted (-0.1% 4. the cost of a dwelling amounted to an average value of 172. A drop in domestic demand lowered both final consumption (0. however.9% year-on-year decrease in 2007).7% on the previous year) and represented 23.86 137. In 2008. Housing and mortgage markets In 2008. Developments in mortgage markets will also largely depend on the evolution of the economic situation in the coming months and on the trend in house prices which is expected to stabilise. Eurostat. however. 2008 2007 0. In 2007.8% 7.7% 5. ECB.6% in the EU15. Belgium=2007 20 | 2008 EMF HYPOSTAT .1% of GDP.500 Euros. average house prices continued to rise by more than 5.8% in 2007). the deceleration in the growth in price increases was quite moderate: in the first half of 2008. growth in house prices turned out to be slightly negative.8% 12. € 000s Total value of residential loans. Over the last quarter.8% of the number of contracts .0% n/a 7.512 Euros (a 2% increase on 2007). which represented an increase of almost 4% over the previous year (after a 7% increase in 2007).0% on 2007) and at 15. After having reached a historical peak of more than 85% in 2007. During 2008. The market share of renovations. Apartments were sold at an average cost of 174. National Bank of Belgium Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate weighted average derived from EMF calculations based on latest available data.5% 78. As at end of 2008. residential mortgage lending outstanding amounted to approximately 137 billion Euros (against 126 billion Euros as at end of 2007). Belgian households have substantial real estate assets which have risen considerably over the last decade: the share of real estate in their total net assets increased from 41% at the end of 1997 to 58% by mid 2008. The market share of construction loans out of the total number of contracts stood at 13.087. Public deficit rose from 0.8% on 2007). the market share of variable rate mortgages (with an initial fixed period of less than 3 year) doubled compared to 2007 (2.2%). but at the end of 2008 growth slowed down to 3.53 126.4%) as compared to 2007 where a 5.3% in 2007).
€ million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Bulgaria.0% 6. has remained strong. Although Bulgaria adopted a legislative framework for covered bonds in 1999. outstanding levels of covered bonds backed by mortgages are still small when compared to other EU27 countries. with the mortgage market accounting for 11. One result of the high demand for housing and mortgages was a sharp increase in the price of housing. Bulgarian National Bank.0% increase on an annual basis compared to a 7. real GDP growth reached 7. this is a relatively small amount when compared to other EU27 countries.0% 96. political commitment to the currency board arrangement which was established in 1997.7% of the current account deficit28.7% of GDP in 2008.5% on an annual basis. Mortgage funding is still largely based on deposits.3% 5.4% n/a 6.1% on Q3 200829. nominal house prices increased by 24. By the end of 2008. with lending significantly slowing down in the last two quarters of 2008. increasing by 1. Despite external monetary pressures. Bulgarian National Statistical Institute. Growth in house prices remained at very high levels.928 0. The current account deficit reached a record high of 25. Bulgaria.8% on an annual basis.5% 11.4% in 2007.4%) were the main factors behind the record level of inflation in 200827. EMF Macroeconomic overview Bulgarian real GDP continued to increase at a robust pace in 2008. However. growing by 6.6% 12.960 24. the benchmark interest rate was 5. Building permits decreased by 10.8% 49.1%. Housing completions also recorded a significant increase in 2008. Fiscal surplus amounted to 3% of GDP. EU27.0% on annual average. Indirect effects of food and fuel prices increases on services’ prices as well as the high growth-rate in real wages (7. this was the second highest annual growth rate in outstanding mortgage debt recorded in 2008 among EU27 countries. this was the highest increase in house prices recorded in 2008 among EU27 countries. Thanks to conservative budgetary policies. Annual Report 2008. Bulgarian National Bank. which covered 73. reaching a total number of 16. the gross amount of public debt remained broadly unchanged in 2008. 2008 EMF HYPOSTAT | 21 . growing by 10. While fairly vibrant. with the consumer price index averaging a 12.8% 6. largely as a consequence of the effects of the financial crisis on the Bulgarian real economy.EU27 country reports Bulgaria By Rodolfo Labadie.77%. the market showed signs of slowing in 2008. While mortgage lending continued to increase thoughout 2008. Sources: ECB.2% 7. Over the course of the year. which saw real GDP growing by more than 6.6% in 2008. with outstanding residential lending reaching 3.9% during the year.9% on an annual basis and reaching a record level of 20.5% 21. the Bulgarian National Bank steadily increased its base interest rate.5 billion Euros on the previous year. Bulgaria= 2002.2% 10. especially over the last two quarters of 2008. In Q4 2008 house prices started to decrease falling by 4. with total revenues rising by 13.2% Housing and mortgage markets The housing market in Bulgaria remained active in 2008 with outstanding mortgage volume increasing by 38. The global financial crisis impacted the national financial system most clearly in the second half of the year. In 2008.087. In 2008. Unemployment continued to decline from 6. keeping in line with the record increase observed in the previous four years.6% 96. Inflationary pressures grew considerably in the first half of 2008.9% 0.868 23. This growth was fuelled in part by a pent up demand for housing and low interest rates.0% on an annual basis and following the trend experienced in the country over the last five years. Eurostat. growth in outstanding residential lending was lower than the two previous years when it grew by 73.1%. € 000s Total value of residential loans.5% 9.24 6.52 3.6% increase in 2007. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita.294 units completed.9% 7.0% 3. Furthermore.960 million Euros.6% of GDP. up by 1. Private consumption and investments remained the main drivers of Bulgarian economic growth.37 2. Bulgarian Statistical Institute Notes: 27 28 29 Bulgarian National Bank. This was partially balanced by a continuous high inflow of foreign direct investment into the country.9% 10. 2008 2007 0. Annual Report 2008.8% 12.19% over the previous twelve-month period.7% 5. Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data. the residential mortgage debt to GDP ratio increased by 17.6% 0.9% in 2007 to 5. Balance of payments data showed that local businesses increasingly resorted to external finance.5% in 2006 and 64.4% n/a 66.0% in the first half of the year but started to slow down by the third quarter of 2008.249.
The unemployment rate increased to 3.1% increase in 2007.9% n/a 66.0%) of which investment in equipment grew 21.4%. Interest rates for residential mortgages increased from 5.5% 21.989 15. EU27. The increase in inflation was in part caused by record high commodity prices in the first half of the year and in part to an increase in final demand.2% and 31.896 building permits were issued which represented a fall of 6. Sources: ECB.90% in 2007 to 5.0% 2. In 2008.8% 12.501 10.3% 5.7% to GDP growth.928 0.7%. though significantly decreased from the 3. Eurostat.0% 6.0% 44.7%.2% of GDP. Residential mortgage lending amounted to 8.87 6.8% 3.8% from the levels recorded in 2007. Statistical Service of Cyprus Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data.24 6. The economy has. this put Cyprus above the 2008 EU27 average of 3.8% for the EU27.6% respectively. this is a marked slowdown from 2007 which saw a 15. Declines in housing demand and in related residential construction activity were reported though there was no evidence of a fall in house prices. Inflation doubled over the year-end 2007 level moving from 2.0% increase in 2007. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Cyprus. The deterioration of the international economic environment and the fall in external demand severely impacted the current account balance contributing to a record deficit of 18.4% surplus in 2007.98% in 2008. and recorded its highest annual increase since 2001.6% on 2007.7% compared to 0.EU27 country reports Cyprus By Alessandro Sciamarelli. For the first time the ratio of mortgage debt outstanding to GDP surpassed 50% (50.6% from the 2007 level.7% 3.0% 50.2% to 4.8% 49. Real GDP increased by 3. Central Bank of Cyprus.4% 68.2%). recording its highest annual growth rate since 1993.77 8.9% of GDP. the increase in outstanding mortgages in 2007 and 2006 was 28.7% 8. € 000s Total value of residential loans.7% on the previous year. the mortgage market remained vibrant with outstanding residential lending increasing by 21.8% 4.087. but this was a clear slowdown compared to the record 13.0% n/a 4. 8.4% 7. as measured by the Central Bank of Cyprus. Private investment in construction increased by 4. The residential property price index.2% Housing and mortgage markets During 2008 the housing market began cooling-off. cooled with growth being somewhat lower than the 4. Cyprus= 2006. however. Despite this marked rise in public expenditure public finances still recorded a surplus of 0.2% 68. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita.2% 10. 22 | 2008 EMF HYPOSTAT .0% according to provisional data.0% 3. While lower than previous years. Government expenditure also contributed a sizable 8.501 million Euros. Cyprus. The strongest contribution to economic growth came from domestic demand (9. 2008 2007 0.7% 4.0% 5.4% that was achieved in 2007. EMF Macroeconomic overview The Cypriot economy in 2008 continued to grow above the EU27 average. increased by 10.
and housing starts decreased by a mere 0.8% 49. Sources: EMF.3%). which almost halved in comparison with 2007 (6.014 million Euros.0% 5.3% 3.0% for the first time on record.8% 12. Outstanding residential mortgage lending recorded another favourable performance in 2008 and increased by 27.0% 3.75% in November and to 2.9% in 2008. Government budget balance as a percentage of GDP was also slightly more negative (1. Despite this cut. As far as the housing demand side is concerned. with the unemployment rate decreasing from 5.8% 1. The second half of the year saw a major slowdown which was the result of the initial phase of the global financial crisis.21 12. A heavier year-on-year fall was recorded in housing completions (by 7. This amendment increases the costs of mortgage covered bonds issues.2% 6.4%). but despite this. coming at the end of a long positive housing cycle of which the year 2007 had represented a peak. Funding The main funding source for residential mortgages in 2008 was still mortgage covered bonds.087. The importance of mortgage covered bonds slowly declined though.8% 3.7% 56.521 n/a 5. € 000s Total value of residential loans.9%) was also weaker than in 2007 (5.1% of GDP) than in 2007 (1. Czech Statistical Office Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data.5% of GDP).3% 62.4% in 2008. which sparked a confidence crisis across the entire banking sector. after much more buoyant growth rates in the previous years). Revenue interest from mortgage covered bonds had been income tax exempt until income tax amendments introduced in 2008. which were forced by changes in the VAT taking effect as of 1st January 2008. Gross fixed capital formation in equipment provided the strongest contribution to GDP growth (10. Interbank markets were frozen for many weeks and insufficient liquidity obliged several large mortgage market players to re-examine their credit activities. The slowdown in the economy did not affect labour market data. Permits for residential buildings were stabilised (-0. 2008 was the second best year in terms of the volume of mortgages provided. Eurostat. on the monetary policy side.3% 58.6% on the previous year but they remained at very high levels.8% 1.3% on yearly average. as a response to strong inflationary pressures over the first half of 2008. These developments led to a wider current account deficit in 2008 (3. Revenue interest on mortgage covered bonds issued after 1 January 2008 is subject to withholding tax. but when put in its historical context.24 6.9% on 2007.EU27 country reports Czech Republic By Alessandro Sciamarelli.2% on 2007).8% of Czech GDP.0% 66. Denmark=2007 2008 EMF HYPOSTAT | 23 . but remained by far above the EU27 average (0. EMF and Jindřich Thon. At the end of 2008 there were a total of 17 banking institutions operating in the Czech mortgage market.0% 58. 2008 2007 0.5%).4% 6. Hypoteční banka Macroeconomic overview In 2008. EU27.0% of outstanding mortgage lending from 62. reaching 16. Consequently.5% 21.0%). representing 56. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita. a historical low since 1998. which resulted in a pronounced slowdown in exports (6. no average national data on house prices is available.3% in 2007 to 4. Republic. the Czech economy experienced a slowdown in its annual growth rate (3.2% Housing and mortgage markets Residential construction in the Czech Republic was flat in 2008.6%).7% 4.0% 7. Inflation surged and reached 6.3% 5. this data reveals that housing activity was still buoyant in 2008.8%). while the year-on-year increase in households`private consumption (2. which was equal to 10. Volumes of gross residential lending dropped by 18% (in CZK) in 2008 compared with 2007 volumes. the costs of financing mortgages were no longer responding to developments in the CNB’s rate.8%).014 n/a 5.928 0. National GDP data reflected the general deterioration of the international macroeconomic environment. The year-on-year growth rate in outstanding mortgage lending was much lower than that recorded in 2007 (55.54 16.7% 10. mainly to Germany.25% in December as a response to the financial crisis. so that in 2008 the ratio of outstanding mortgage lending to GDP was above 10.2%). then it was lowered down to 2.50% in February 2008. the repo rate was raised by the Czech National Bank from 3.0% in 2007. ECB.25% to 3. which proved to be still very positive. This was the result of the liquidity crisis in the second half of 2008.7% 9. The four largest institutions represented 89% of the market.5%) than in 2007 (0. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Czech Czech Republic. Czech National Bank. but largely outpaced annual growth rates recorded in all EU15 mature mortgage markets.
the receding demand on the housing market led to an increasing number of homes put up for sale in 2008.71 211.57 222.6% 7. had to deal with more problems on the housing market side. home owners refinancing initial fixed mortgages in December 2008 had to accept a premium due to the currency pressure and international investors partly withdrawing from the Danish market.0%. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita. EU27. Looking at the Copenhagen market. mortgages in arrears rose to 0. Gross residential lending as well as net residential lending decreased on the previous Funding Danish mortgage banks have secured an uninterrupted flow of capital to Danish home owners in 2008. the number of transactions dropped rapidly. and the mortgage bank will claim against the debtor unless a forced sale can cover the outstanding mortgage debt.087.end 2008 outstanding residential loans had reached 222 billion Euros. marking the toughest period in the Danish economy since the oil crises in the 1970s.6% 54. On top of dealing with a nearly frozen housing market. The fourth quarter saw the lowest number of transactions for the past several years.0% by the summer of 2006.4% of expected payments.8% 38. Mortgage banks operate within a highly regulated framework. Average prices on single family homes decreased by 5.4% on the previous 12 months.1% from 2007 to 2008.0%. which spilled into the real economy.7% and 27.0% 66.5% 21.664 4. By the fourth quarter of 2008.8% in 2007). but firsttime buyers that have acquired a home since early 2007 are in danger of technical insolvency.0% 3.3% 40. 275 houses were repossessed by Danish mortgage banks. 2008 2007 0.8% 49. The ready access to financing has held a hand under the housing market and home owners have enjoyed flexibility to manage mortgage debt according to their personal appetite for risk.1% 6. down from 11.3% of GDP. the Danish final consumption deflator rose somewhat faster by a rate of 3. In 2008 however. international investors reduced their holdings in Danish mortgage bonds. Given that the Danish currency is pegged to the Euro (Denmark participates in the ERM 2).0%. By the end of 2008 this ratio had come down to 58. Denmark=2008 24 | 2008 EMF HYPOSTAT . mortgage banks also assess the potential debtor’s creditworthiness.1% over the year.5% on average in 2008 (3.105 -5. and in this context.6% of Danish mortgage bonds. Coming from a historically low level in 2007.0% 92. While the evaluation of the asset is also highly regulated.4% in 2007.3% 5.7% 3.3% rate recorded in 2007. The Danish Krone came under pressure in the fall of 2008 and the spread to ECB rates widened. The fall could partly be explained by the falling house prices. and partly by decreasing interest rates and energy prices.0% 95. consolidated Danish consumer prices have only risen moderately in past years. financing the remainder through banks or in the unregulated secondary mortgage market. have shown some resilience to the crisis in credit and asset markets. Denmark is a small open economy and economic growth in 2008 has been highly influenced by the unfolding meltdown in global credit markets. EUROSTAT. € 000s Total value of residential loans. while the Harmonised Index of Consumer Prices. the housing costs as a share of first time buyers’ disposable income had climbed to a staggering 68. which was an increase of 226 houses compared with 2007. Despite several years of increased pressure on production capacity. Mortgage banks can go up to 80% LTV on residential loans. During 2008. By the end of 2008 international investors held 8. The same can be observed for the number of repossessed homes.9% 100. In case of default. ECB. year by 14.0% and building permits were down by 25.6% 100. thereby accelerating in comparison with the 2. In 2008.0% 3.8% -1. It could be argued that Danish home owners had to pick up part of the tab for Denmark opting to remain outside the Euro. 3 percentage points above the level recorded in 2007. The negative effects have spilled over into the construction industry. which remained at a low level. the rise in 2008 should not be considered alarming.0%. In the fall of 2008. 2007 marked a record low level for repossesions. Housing and mortgage markets Danish home owners were not spared the housing shocks of 2008. The abrupt tumble came after several years of expansion which boosted asset values and brought production capacity to its limit. Potential buyers have been reluctant to close a deal before having secured the sale of their existing home. Denmark.3% 5. the Danish National Bank’s interest rate and hence the Danish money market rates fluctuate with euro area rates. leaving some home owners stuck with a new house and an old house that they could not sell.3% 3. While the owner occupied ratio in Denmark remains relatively constant at approximately 54. Hence. international investors withdrew to larger and presumably safer currency areas like the Euro area or the US. Parts of the real economy. First time buyers however rarely bring a down payment exceeding 10%. Again. economists have increasingly looked toward first time buyers for the tie breaker.2% Sources: EMF. International investors’ share of Danish mortgage bonds dropped in December as international investors were reluctant to participate in the refinancing auctions. HICP rose by 3. The outstanding residentials loans reached 95.3% against 3.2% respectively. the arrears ratio remains low once put into a longer historical context.3% 54. The number of unemployed as a share of the labour force decreased by 0. Despite the pressure on the national currency. of 0.6%. Falling house prices have yet to become a problem at the aggregate level. Danish mortgage institutions are bound by law to Loanto-Value ratios not exceeding 80%.928 0. Home owners. in the meanwhile.1% 1. housing completions were down by 30. compared with 2007. The Danish labour market remained strong.8% 2.8% 12. The gridlock in the housing market has been somewhat self reinforcing. The number of housing starts were down by 27.EU27 country reports Denmark By Kaare Christensen. the property will likely be liquidated at a forced sale.24 6. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Denmark. At year . however. This represented a modest increase in arrears. Denmark Statistics Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate weighted average derived from EMF calculations based on latest available data. During 2008. Danish mortgage banks have kept their access to funding throughout the year. Association of Danish Mortgage Banks Macroeconomic overview Danish real GDP contracted by 1.1% on the previous year.
Reflecting the increases recorded in the interbank rates.7% 6.5% growth-rate in 2007 and 63. house prices plummeted by 28.0% 3. Annual Report.8% of GDP. building permits decreased by 38.05% on average. After six years of steady growth. Estonian real GDP fell by 3. For a comparison.3% at the end of 2007 and 3. Estonia holds one of the highest ratios of residential mortgage lending to GDP among new EU Member States. After almost a decade of buoyant economic growth. mortgage interest rates for loans denominated in EEK were at 7. The unemployment rate rose to 5. Bank of Estonia. The tightening of monetary policy observed in most EU countries was also experienced by Estonia.7% 5. one of the highest levels among EU27 countries.1% in Q2 2008) gained substantial pace during the following months.5% in 2008 compared to 4. Net residential lending fell by 56. Outstanding residential lending increased by only 10.the TALIBOR . Central Statistical Bureau of Estonia Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data. Housing and mortgage markets In 2008.24 6.7% n/a 4. € 000s Total value of residential loans.468 issuances. compared to 7. Over the last decade.3% 4. mortgage lending further tightened in 2008. where growth in house prices reached peaks of more than 40% increases on an annual basis in both 2004 and 2005. In the last six years.7% on an annual basis while gross lending decreased by 32.87% as of end of the year. compared to 5.3% 7. Since economic contraction in 2008 was faster than expected. compared to a 31.9%. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita. The total amount of outstanding residential loans reached 6. consumer prices grew faster than expected.0%.216 -28.9% of GDP in Latvia and 17.2% of GDP. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Estonia. The number of total dwellings increased by 0. In 2008. though this was still a relatively low level compared to the EU27 average.4% in Q4 2008.5% 10.1% on an annual basis while the number of transactions fell by 32. amounting to 39.6% 96. especially in the first half of 2008. compared to a 6.0% 36. the house-price boom in Estonia was among the most sustained in the EU countries.863 in 2006. The slowdown in real GDP experienced in the first half of 2008 (-1. During the boom years.4% on an annual basis while private investment fell by almost 5.5% in 2008. 2008 2007 0. The interbank lending rate for the national currency loans .7% the previous year.0% 39.087.7% on an annual basis for a total number of 5.2% 4. in the other Baltic States residential mortgage debt represents 30. Eurostat. EU27.5% n/a 66.6% 6.58% in 2007. which represent the majority of housing loans.2% Sources: ECB. 30 The Bank of Estonia. were at 5.85% at the end of 2006.928 0. the number of building permits issued surpassed 9. housing completions fell by 25. reaching 10. GDP decreased in most fields of activity.625 7. In 2008.4% in 2008 on an annual basis.6% on an annual basis. As a result of external price shocks. Estonia = 2008.6% for 2008 on average.000 in 2004 and 2005. Estonia.48% in 2007. EMF Macroeconomic overview In 2008 the Estonian economy was severely affected by the global financial crisis.EU27 country reports Estonia By Rodolfo Labadie.19 5. Following the slowdown started in 2007.3% 5. the general government expenditure exceeded the revenue for the first time in six years30. reaching a contraction of 9.8% on an annual basis while the owner occupation rate remained constant at 96%.3% growth recorded in 2007.64 6.216 million Euros for 2008. the government budget deficit constituted 4.5% 21.further increased in 2008. especially in the first three quarters of 2008.70% on average.8% -3. activity in the housing market sharply decreased. Estonia has experienced one of the fastest levels of growth in mortgage lending among EU27 countries.3% compared to 2007.8% 49. a steep increase from an average of 5.2% 5.8% 12. The TALIBOR 3 months stood at 7. The ratio between residential mortgage debt and GDP further increased in 2008. Funding Deposits are still the main funding source and a legal framework for covered bonds has yet to be implemented within the country.7% 96. 2008 EMF HYPOSTAT | 25 . Following the slowdown started in 2007. annual interest rates on loans for home purchase denominated in Euros.4% growth-rate in 2006 on an annual basis. with only government consumption and some sectors registering positive growth compared to 2007. Domestic demand shrank by 8.4% 5.3% of GDP in Lithuania. However. reaching a peak of 12. especially during the first half of 2008.
GDP will decrease more in 2009 than previously expected.8% 0.500 units.367 1.2% Sources: EMF. Statistics Finland Housing and mortgage markets The share of owner occupied dwellings in the housing stock remained at around 59.24 6.2% 7. Industrial output has plummeted.087.0%. In 2008. € 000s Total value of residential loans.2%.7% 6.3% 5.4% 3.7% n/a 66. Banks have been very careful in the granting of new loans to building companies. The price of second-hand dwellings decreased for the first time by 1.0% 47.0%.0% n/a 6. The unemployment rate declined for a tenth consecutive year from the high levels seen in the early 1990s recession. Finland= 2007 26 | 2008 EMF HYPOSTAT . housing starts were shown to have risen to the same level as recorded in the previous year (30.9% 59. Declining foreign trade led Finland’s industrial production into a sharp fall.000 units.67 82.000 will be state-subsidised housing.9% 4.300 units. due to the financial crisis. However.0% real GDP growth. EU27.478 dwellings). The benefits of falling interest rates were.000 people and the unemployment rate to rise to 9. So far. and especially in housing loans to building companies. Next year production is projected to drop by 1. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Finland. The government budget will continue to record large deficits for a number of years to come. of which nearly 10.0% in 2008.000 units.0% 4. Building permits fell to 26. Despite all hopes for a “soft landing”.67 88. According to forecasts.EU27 country reports Finland By Ari Laine. however. the number of unemployed is expected to increase by an average of 70. by an estimated 5. However. and government debt will grow even more.6% 58.9% 1.928 0. fearing possible losses due to the current market situation. Finland.0% 3. The number of completions of new dwellings stood at almost 30.4%.8% 12.5% 16. housing activity is expected to decline further in 2009 with housing starts reaching 15. At the beginning of 2008.7% 11. the number of mortgages in arrears and the amount of losses in households` housing loans have both been minimal when compared to the developments observed during the Finnish recession in the early 1990s.0% 45. the financial markets veered into a crisis after September 2008. Economic forecasts at the beginning of 2008 still predicted a 5. The central government budget balance will slide into a deficit of 6 billion Euros this year. Housing Fund of Finland Macroeconomic overview The long period of sustained economic growth in the global economy ceased in the third quarter of 2008 and the Finnish economy started shrinking towards the end of the year. The decline in the economy further accelerated in the first quarter of this year.5% 21.0 to 6.9%.058 6. EUROSTAT. Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data.5%. the unemployment rate was 6. and no significant improvement is expected in the course of 2009. and nearly all industrialized countries slipped into recession in early 2009. The employment rate will continue to decrease. in 2009. The housing market stabilised after the decrease in interest rates in the first quarter of 2009. the financial crisis widely affected developments in housing activity so that housing starts in 2008 only numbered 24. but actual economic growth in 2008 was 0. 2008 2007 0. partly offset by the very rapid rise in loan margins in households` mortgage loans. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita. ECB.2% 5.8% 49.
5% in 2007). Crédit Immobilier de France Macroeconomic overview For the first three quarters of 2008.300 Euros).800 -2. housing activity indicators remained at historically high levels. the cost of non-performing mortgages loans increased. against 5. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita. and house prices. However.000 units) fell by 34%. Foreign trade performed weakly due to a decrease in exports (-0.01/2008 of 3rd January 2008) which obliges lenders to provide consumers with more information.9% at end 2007. The drop was heavier for apartments (-17%) than for single-family houses (-14%). However. despite this likely tightening in housing supply. in part due to an underestimation of its seriousness and of its ability to affect the real economy. the government decided to enhance borrowers`protection by passing a law (Loi n.600 units started still represented a high level. This could be observed with housing starts.9% 10.99 700. against 5.9% 10. 5.4%.4% in 2007). Banque de France. Nominal households`income was still growing (3. The number of transactions in the second-hand market dropped by 14% (amounting to a total of 667. while the average annual rate was 7. Lenders should be able to meet mortgage demand as long as the ECB and EU governments maintain their commitment to sustain the market.8% 12.6% and in December it was 1.4% 35. the French markets should regain stability but growth in activity will likely remain at lower levels compared to the past years. The stock of unsold dwellings reached a peak of 110. prices should still have further room to decrease in the short-term.9%.087. At the same time. the stock of dwellings for sale should decrease quickly.3%. EU27.900 5. Finally. against 7. the crisis became more evident to consumers after the Lehman crash.3% 5. France= 2007 2008 EMF HYPOSTAT | 27 .4% against 8. France.0%).3% in 2007. The rise in variable rates impacted more on the perception of risk by public opinion than on the actual risk. new mortgage loans. recording the highest level of sales since 1985. This disappointing result in 2008 was a consequence of the weakness of domestic demand.4% against 2.6% against 3. INSEE Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data.6%). the weakness in household consumption (0.928 0.year inflation fell considerably in the second half of the year (in June it was 3.3% 1. the government decided to support households wishing to buy new dwellings.5% against 2. but stayed at 66. housing and mortgage markets showed a visible slowdown.5% 21.5% 34. very low levels. EUROSTAT.24 6.000 units) with a decrease in prices of 2. Furthermore.2% n/a 8. In 2009.8%. Firstly. lowering confidence and discouraging potential buyers. the French economy was largely unaffected by the international financial crisis. Yet.4% in 2007) and in private fixed investment (2.4%. and also requires mortgage lenders to provide recourse to an Ombudsman in the case of disputes. but the increase in net income was much lower (0. 2. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending France. Gross residential lending fell by 16.6% compared with the same period in 2007 and by 10% compared with the same period in 2006.6% n/a Housing and mortgage markets After 11 years of continued growth. resulting from the fall of household investment (-1.60%) during the second half of the year and the uncertainty of variable rates for mortgage loans reduced the affordability of households. As a consequence. Different factors contributed to the slowdown in the housing market. the rise in fixed rates (by around 0.17 651.8% 3. ECB. Secondly. € 000s Total value of residential loans. Housing starts decreased by 15. 2008 2007 0. but 368.6% 56. Average annual HICP inflation was 3.7% 4.EU27 country reports France By Jean-Marie Gambrelle and Marielle Thomas.4% 2.9% amounting to 122 billion Euros. lenders raised credit scores due to the growing LTV risks and to increasing funding difficulties.5% in 2007) while imports remained stable (0.7% 7. Total sales of new properties (79. however in 2007 they had reached a peak in in absolute terms. The price of new apartments per square metre remained stable (3.2% in 2007). but year-on.900 residential properties (with an average duration of 21 months of sale. but at the end of 2008 the prices of new houses decreased by 6. However. the decrease being stronger in Q4 2008.9%.2% at end 2008.8% 49. prices stabilised and many potential buyers decided to wait and postpone their purchase.3% 7.8% 0. buy-to-let investments became regarded as riskier. At the end of 2008.0% 3.9% 5.2% Source: EMF. But after the Lehman Brothers’ crash (September 2008) the French economy plummeted: at the end of 2008 real GDP grew by a mere 0. French employment decreased with unemployment rate rising to 8. against 11 months recorded at the end of 2007).1% in 2007).2% 57.2%.6%.
2% Source: EMF.4% 2. the number of transactions decreased slightly (-2%) to 446. While GDP developed favourably in 2006 and 2007.2% 4. Unsurprisingly. Germany=2002 28 | 2008 EMF HYPOSTAT . In 2008. where to a large extent demand was brought forward by the fact that the scheduled VAT increase from 16% to 19% became effective from January 1. Germany.5% 7. However. too. This led to a pronounced price increase. felt the impact of the worldwide economic downturn. This corresponded with a surge in demand towards the end of the year. As in previous years. investment in housing was driven by a number of exceptional factors. For the Pfandbrief banks that make up the Association of German Pfandbrief Banks (vdp). following on from solid growth in 2007.EU27 country reports Germany By Thomas Hofer.3% 43. several attempts were made to compose a house price index measuring the pure house price movement. a strong rise in prices for both property types of approximately 5% compared to the previous year was observed. Since repayments of existing loans exceeded new lending business.1% 13. In recent years. Inflation increased from 2. investment in residential construction increased slightly (0.3 billion Euros were issued (in 2007 they were 26. Public Pfandbriefe declined from 677. the demand for housing showed signs of slowing down in 2007 and to some extent also in 2008.7% of the total market.3% 2. In 2008. public Pfandbriefe with an aggregate volume of 89.742 -0. In 2008.2% of the total EU market. outstanding loans amounted to 1. While the volume outstanding of Mortgage Pfandbriefe increased from 206. gauging house price movements within the scope of the implementation of Basel II has become a major topic.8% (2008).4% (2007) to 7.155.147. In 2008. reflecting the recent rise in construction costs. ECB. National Central Banks.) was slightly higher than for apartments (1. quality-adjusted price indices over the period 2003 to 2008 for single family houses and apartments were produced.928 0. the number of unemployed declined from 8. rising in real terms by 3.3% p.3% 2.5 billion (in 2007 they 107.087. overall economic growth in 2008 was considerably less strong (1. gross residential lending remained at the same level than in the previous year.0% 17.0% 3.8 billion). the prices for single family houses rose by 5%. from the second half of 2008 onwards.96 1.a. EU27.5 billion Euros to 217. accounting for 75.8%).7% compared to 2007). This was most evident in 2006. Rents and purchase prices for individual properties as well as their value-influencing factors are systematically collected in the vdp transaction database. hedonic methods are applied to make detailed evaluations of the development of property prices.2% 47.a.3%). Many homeowners and private landlords carried out renovation investment in 2006 in order to avoid the higher VAT rate.9 billion Euros. Mortgage Pfandbriefe totalling 57.7% 7.2% 46. Over this period. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita. On the basis of this data.3% (2007) to 2.595 units in 2008.9% 8. 2006. receded. which makes up a large portion of German exports. 2008 2007 0. the vdp set up a project to generate property price indices for several regional and sectoral markets. The average annual price increase for single family houses (2. The number of transactions has been relatively stable for the last few years.7 billion Euros to 578. At the end of 2008.8% 1. The demand for capital goods. albeit with declines in some years.3 % (2008). In 2005 in particular. Trends in house prices have developed differently in Germany when compared to most other European countries.869 5.000.05 1.8% 43.8% 49. Association of German Pfandbrief Banks Macroeconomic overview In the first half of 2008 the economy continued to show positive growth. In 2008.24 6. the volume of outstanding residential loans decreased slightly.148 billion Euros (-0.).8% 12. Germany. Due to the economic upturn in the first half of the year. Building permits declined by 4. The sub sector of this market for mortgage bonds is also strong in Germany and accounts for 15. In recent years. mortgage rates in Germany were slightly lower than at the end of the previous year.4 billion Euros. prices – with slight fluctuations around the zero line – again reverted to a more subdued development. private consumption remained almost unchanged in 2008.5% 21. Many private households brought forward the purchase of a singlefamily house or owner-occupied apartment in 2005 because the governmentallowance given to homebuyers for house purchases was to be abolished on January 1. Given an almost unchanged demand for house purchases and modernisation and renovation.9% 66. € 000s Total value of residential loans.7% 5. Federal Statistical Office Germany Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data. Together with its member banks.3% 5.7% 14.5% p. 2007. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Germany. Most existing data sources report only slight changes in house prices over a long period.5% respectively. Housing and mortgage markets In 2008. With a view to measuring pure price development.8% 18. Following this jump. EUROSTAT. Funding Germany has the largest covered bond market in Europe.2% to 174. both indices showed on the whole a positive development.9 billion) Euros were also sold.0% and 2.
The effect of these housing market developments on consumption as a wealth variable is estimated to be rather limited. residential property prices in all urban areas increased by 2.8% 12.1% 30.6% 5.2% Source: EMF.0% 3. manufacturing and retail trade sectors. On the supply side.363 4. Economic activity in Greece has been slowing down since the beginning of 2008 on the back of rising oil prices and the deterioration of global financial conditions.8% n/a Housing and mortgage markets The main characteristic of the housing market in Greece over the last three years has been the deceleration in prices (since the beginning of 2006). ECB. Nevertheless.5% at the end of 2008. it is estimated that residential property prices fell by 1. the Greek government.2% 6. adopted a 28-billion Euros programme of measures aiming to maintain liquidity and the proper functioning of the domestic financial system. Greece.5% year-on-year GDP growth rates recorded in Q3 and Q4 2008 in the euro area.3% 5.8% in 2007 and in 2008 respectively). tourism.087. to be used with the ECB. The fall in demand is also depicted in the continuous deceleration in the outstanding balances of housing loans as a percentage of total bank credit (11.6% 4.8% in December 2006).9% in 2008 and 0. € 000s Total value of residential loans.9% 4. Following the deceleration in residential property prices in 2008.6% 32.6% in 2008.0% 7. there is a substantial stock of new houses gradually being absorbed.9% in December 2007 and 25.EU27 country reports Greece By Theodore Mitrakos.700 2.3% (year-onyear) in Q1 2009.93 77. as against 5.4% respectively.9% in 2005. exports and imports. The supply of new houses remained at high levels in 2007 and 2008 (even if the volume of private building activity in terms of residential construction permits issued recorded a decline of 5. and in GDP growth.0% 80.2% 80.7% in year-on-year terms in 2008. 2008 2007 0.7% 7. still registering high growth rates despite the increase in the cost of financing up to October 2008 and the tighter lending criteria imposed by banks for housing loans. and direct liquidity injection through the issue of special government bonds amounting to 8 billion Euros. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita. 12. guarantees for bank borrowing in the markets of 15 billion Euros. Inflation was at 0.2% in 2007 and 11. This plan started to be gradually implemented in H1 2009 by all the main Greek banks. EU27.4% (in nominal terms) in the first quarter of 2009 on the same quarter of the previous year.3% and a fall of 15. On the basis of data aggregated by banks. Within this framework. Economic uncertainty and the substantial fall in international economic activity and trade in Q4 2008 and Q1 2009. Funding The unavailability of credit was more pronounced in Q1 2009. significantly lower than the average annual level of 4. Greece= 2008 2008 EMF HYPOSTAT | 29 . National Statistical Service of Greece Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data.8% 49. as Greek banks intensified their re-pricing of customer loans.7% and 2. due to the expected decline in both consumption and investment as the recession in Europe and the world economy deepens. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Greece. from 3. More specifically. Eurostat. undermining economic activity especially in the housing.4% 8. which nevertheless kept registering positive annual changes (in nominal terms) in 2008. According to Bank of Greece estimates. On the other hand. Central Bank of Greece Macroeconomic overview The Greek economy grew at a healthy rate of 2.3% 6. from 21. while growth in residential property prices for urban areas excluding Athens further decelerated to 2. This has set the stage for a slowdown in consumption and a substantial fall in investment.5% in June 2009 and the average inflation for 2009 is expected to be 1. however negative GDP growth of -1. growth in Q3 and Q4 2008 has been a solid 2.0% 6. in line with prevailing international practice. National Bank of Greece.0% is expected in 2009.928 0.8% in 2007 and 13% in 2006.6% in 2008 from 4.2% in 2006 and 10.21 69. following a period of negative term deposit spreads in a wider context of post-Lehman deterioration in global funding conditions.2%.5% and -1. the more cautious attitude of banks in granting new housing loans is estimated to have contributed to the falling demand.24 6. including bank capital injections through the issue of preference shares of 5 billion Euros. the annual growth rate in residential property prices is estimated to have turned negative in the first three months of 2009.5% 21.2% in 2008. has also rocked consumer and business confidence in the Greek economy. compared with the 0.6% in 2007.8% 2. 66.7% 4.3% in 2006. residential property prices in Athens grew by 2.3% 3.
€ 000s Total value of residential loans. the amounts involved were greatly reduced and the bargaining process lengthened. According to a simulation model carried out by a Hungarian National Bank study. The Hungarian economy was close to recession even before the credit crunch and this is why the global financial crisis hit Hungary the hardest among CEE economies.EU27 country reports Hungary By Joszef Hegedus. and is expected to contract by 6% in 2009. The data for 2008 does not demonstrate a house price decrease yet. Eurostat.3% 5. Banks started to use financial intermediaries (i. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita. Given the low Loan-to-Value ratio (61% in 2007) and the fact that there has been no substantial price fall. in case the economy experiences further shocks . Metropolitan Research Institute Macroeconomic Overview Hungary’s membership of the European Union in 2004 bolstered the outlook for the economy. the banking system could sustain a loss of 372 billion HUF. or about 2% of their combined lending portfolio at the end of 2008. The generous mortgage subsidies (two interest rate subsidy programmes. or 6% of their total portfolio.0% 12. the quality of the underwriting process worsened and the traditional mortgage loans were increasingly replaced by loans with real estate collateral used for consumption.e. but the housing programme of the government which started in 2000 (in parallel with the economic recovery at the end of the 1990s) continued to impact the residential real estate market.7% 7.5% in 2008. Hungary. the probability of mortgage arrears next year increased from 2.4% 7. Hungary has a 92% homeownership rate as a consequence of the wide privatisation process of the 1990s. However. Until September 2008 household consumption funded by loans had continued to increase.694 -4. also thanks to the increase in EU funds. Because of the general economic recession. and not for housing (through mortgage equity withdrawal). the government cut the size of the subsidy and the eligibility criteria. but less than expected (from 36. because the Hungarian financial sector suffered when credits began to dry up in the middle of 2008. the recent increase in foreclosures is due to high payment/ income ratio.8% 49. there are other signs of difficulty in the construction sector as well. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Hungary. but at the same time industrial production. The mortgage boom had an effect on house prices but did not lead to a house price bubble. the demand from foreign investors went down substantially.0% 14.159 housing completions in 2007 to 36. assuming current macroeconomic trends continue. An important change in housing policy was announced in 2009 suspending the construction subsidy and the general interest rate subsidies which were replaced by a special mortgage programme which is aimed at young families.8% 12. employment and exports were falling.46 14.5% in 2005 to 3. The number of foreclosures has been increased but there is no reliable information available. 30 | 2008 EMF HYPOSTAT . Foreign Direct Investments continued to flow to Hungary. Hungarian banks may have to write off HUF 118 billion of their retail mortgage loans. and kept inflation under control at 6.5% 21. A 25 billion USD agreement was signed with the IMF in 2008.such as a 10% decline in GDP and a weakening of the HUF/EUR rate to 340. Hungary= 2003. Foreign demand for real estate in Budapest has greatly weakened.0% 1. By 2000. such as the stocks of unfinished buildings. which.2% 7. The non-subsidised foreign-currency denominated loans were cheaper than the subsidised Hungarian Florint (HUF) loans. However. However. which increased the probability of arrears. the banks introduced foreign currency-denominated loans based on cheap international credit.8% 9. National Census Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data.4% 1.25 12. the housing output had decreased to 22.0% 3.2% of GDP in 2006 to 3. The government successfully decreased the budget deficit from 9. The residential debt to GDP ratio increased after 2004 as residential mortgage finance was fueled by cheap international credit (foreign currency denominated loans were mainly in Swiss Francs and Japanese Yen).000 in 1989.2% in 2007 and 0.9% in 2007). Housing and mortgage markets According to latest available data (2003). Building permits and housing construction increased as well. However.8% 66. leading to a marked increase in the outstanding mortgage loan to GDP. The Hungarian economy grew only by just 1.0% and the share of foreign-denominated loans rose to 60% of the total stock of loans. Hungarian National Bank. The weakening HUF caused a radical 30-40% increase of the mortgage repayment for borrowers of foreign currency denominated loans. As a consequence.535 6. Managing Director.3% of GDP. The mortgage market has changed dramatically after September of 2008.5% 1. Housing construction activity decreased in 2008. By 2008 the outstanding residential loan to GDP ratio increased to 14.8% 6.5% 11. contributed to growth in the economy.9% 92. PIT tax allowance and construction capital grant) boosted the mortgage market. but anecdotal information indicates a 10% house price decrease year-on-year. ECB.087.0% in 2008 (to compare to 7. EU27.8% 0. The Hungarian government introduced a special programme to help households that have difficulties in making their loan payments because they have lost their jobs.2% Source: EMF.0% 92.4% 7.000 units from 52. rising unemployment and decreasing household income the probability of arrears is increasing. It is expected that real fixed housing investment will fall in 2009 (although the tightening of the housing subsidy scheme in 2009 has brought forward some housing investment). brokers) from 2006.928 0. House prices increased just before the new housing policy was implemented as a correction to the downward trend in 1990s.24 6. The programme has not been implemented yet. Because of the effect of the housing program on public deficit. According to a Hungarian National Bank publication. the interest rate risk and exchange rate risk were borne by the borrowers. which sustained the development of the residential mortgage market.9% 47.8% in 2008.075 in 2008). 2008 2007 0.2% 48.
5 billion Euros of Asset Covered Securities (ACS) backed by mortgages being issued. Overall. the number of buy-to-let loans issued fell 36% to 13. As a small. as well as falling personal income. open and exportoriented economy. although this trend of declining GDP growth had been emerging since the second half of 2007.5 billion Euros in GGBs in 2008. In October.852 units indicating that the tightening of housing supply is likely to continue into 2009. the Government moved to implement a guarantee of all deposits (retail. Interestingly. 40. it was not surprising that First-Time Buyers increased their share of the number of new mortgage loans drawn down by 6 percentage points during 2008 although of a reduced market overall. especially given their eligibility as collateral with the European Central Bank in its market operations. The number of mortgage accounts in arrears of three months or more was just 1.000 Euros. before impacting on the wider economy. As a consequence of this and the changed funding environment.9 billion Euros in 2007). In 2008.1% in 2008.3% in 2008. will go some way towards enhancing competitiveness. Inflationary pressures dropped off sharply thereafter aided by the consecutive reduction in ECB interest rates. non-deposit taking mortgage lenders became regulated for the first time and thereby had to adhere to the authority of the Financial Regulator and to be compliant with the Regulator’s centrepiece document. The Government also increased mortgage interest relief in November 2008 for First-Time Buyers which was designed to assist those more exposed to falling property values. The levels of distress in the mortgage market remained notably low in 2008 despite the adverse economic conditions. with a view to encouraging the flow of funds to the economy. the Harmonised Index of Consumer Prices (HICP) was 3. the UK.9% in 2007.6% in late 2007 to 7. also had adverse effects on the economy’s competitiveness.4 billion Euros issued in 2007. peaked in mid-2008 with the Consumer Price Index reaching 5%in June. finally. amounting to just 0. significantly up on the 10. EBS Mortgage Finance.305 mortgage loans was issued in 2008 at a value of 23. Housing starts fell by 53. While growth of new mortgage lending declined. The Guarantee put in place by the Irish Government applies to funding instruments of covered institutions. Of these. together with falls in other costs. net lending continued to increase.2% to 22. Given these trends. At the same time. mortgage lending is likely to remain subdued at least in the short-term.573 Euros from 287. Housing and mortgage markets The slowdown in the mortgage market that had begun in 2007 continued in 2008 and was exacerbated by both global economic events and domestic developments. with 9. entered the ACS market.7% a year later. Events in global markets that culminated in the liquidity crisis. Uncertainty grew and confidence was shaken. the Government increased the amount of a depositor’s money covered by the Deposit Guarantee Scheme from a maximum of 20. up from 2.887 Euros a year previous. the euro area and the US entered recession in the latter half of 2008. Also. Similarly. Thus. The construction slowdown translated into increasing unemployment and falling tax revenues in the first instance. the position of potential purchasers was also improved as property prices. especially for exporters. including the collapse of Lehman Brothers Holdings Inc.5 billion Euros). was negative in monthly growth terms.and Second-Time Buyers compared to the previous year. ACS remained an attractive funding option. fuelled by high energy prices. compared to 6. Ireland was impacted by the global downturn in 2008. which constrained mortgage lending compared to 2007. commercial. Irish Banking Federation Macroeconomic overview After over a decade of strong economic growth. The initial easing of construction activity that began in 2007 continued and filtered into other economic sectors. Ireland. A further decline in the volume of units completed is expected in 2009 which will move the housing market towards equilibrium. Similarly. Demand for housing was suppressed by growing and pervasive labour market uncertainty. property purchasers and potential property purchasers were constrained by both falling and uncertainty over income. bring total outstandings of ACS backed by mortgages to 23 billion Euros. However. Funding The funding environment in Ireland was also impacted by global market events. The sustained decline in the construction sector was demonstrated by the 34% fall in completions to 51. an increase of nearly 6% on the previous year. Securitisation issuance in Ireland totalled 40. The volume of repossessions again remained very low. like its main trading partners. prices fell more for First-Time Buyers (14%) than for Second-Time Buyers (less than 8%) and for second-hand property (around 10%) more than for new homes (just over 8%). the position of many existing mortgage-holders was improved by the favourable cuts in the ECB rates and the general easing of inflation which.01% of mortgage loans.049 million Euros which represented a decrease of 30% compared to the previous year.390 loans at a value of 10. 2008 EMF HYPOSTAT | 31 .. international investors have responded positively to the decisive actions taken by the Government and the widespread and significant wage cuts across the public and private sector that. with the total value of outstanding mortgages reaching almost 148 billion Euros by the end of 2008.226.724 units in 2008. Similar guarantees were subsequently put in place in other jurisdictions. Gross domestic product contracted by 2. The Irish economy is unlikely to return to growth until the global economy.000 Euros to 100. particularly when compared with other European countries. prompting the Government to take a number of actions to strengthen the banking sector: firstly in September. a new issuer. by the end of 2008. the Consumer Protection Code. with a view to further tax increases in 2009. institutional and interbank) for a length of two years at a charge to participating credit institutions.EU27 country reports Ireland By Tom O’Connor. the Government increased taxation to ease the exchequer deficit. representing a decrease of 36% in the number of loans drawn down by First. Indications are that affordability is likely to continue to improve for potential purchasers although many appear to be refraining from entering the market given the level of economic uncertainty and the sentiment that property prices are likely to continue to decrease at least in the short-term. continued that trend decreasing 9% nationally to 261. There was strong covered bond issuance in 2008.44% when all mortgage lenders (including lenders in the small sub-prime market) were surveyed in mid-2008.7 billion Euros in 2008. giving rise to the Government Guaranteed Bond (GGB) asset class. recovers. A total of 110. which had been falling since early 2007. Inflation. with 96 properties taken into possession by mainstream lenders in 2008. Ireland was also impacted significantly by global developments which weakened domestic sentiment. Irish institutions issued 5. Most of the issuance in 2008 was RMBS 36 billion Euros. for an appropriate return to the taxpayer. Exchange rate movements and the depreciation of sterling in particular. then at the end of September. in particular Europe and the United States. in December the Government announced that it was formulating a recapitalisation programme for investment in credit institutions of systemic importance to the Irish economy.405 Euros million were for the purchase of a home in 2008. with CMBS issuance in 2008 of 3 billion (in 2007 it was 1. resulting in an increase in the unemployment rate from 4. constrained funding for financial institutions in Ireland.
928 0.1% 9.7% 6.8% -2.0% 3. Heritage and Local Government. EUROSTAT.0% 33.9% 74.5% 4.24 6. Central Bank and Financial Services Authority of Ireland.3% 15. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Ireland. Department of the Environment.3% 5.7% Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data.3% 5.0% 7.5% 75.542 -9.1% 5.3% 3.20 139.6% 2. 2008 2007 0.1% 74. Ireland.75 148.3% 32.5% 21.8% 49.2% Source: EMF. € 000s Total value of residential loans. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita.3% 6.EU27 country reports EU27. ECB. IBF/PwC Mortgage Market Profile 32 | 2008 EMF HYPOSTAT . ESRI.8% 12.087. Central Statistics Office. Ireland= 2008 66. ptsb/ESRI House Price Index.842 -7.5% 80.
8% 5. The economic downturn was felt most acutely during the fourth quarter of 2008 when GDP fell by 1. the initial average interest rate on residential mortgage loans showed a slight increase of 0. The year-end interest rate. with the exception of foodstuff products. the housing market recorded 686.5% 5.0%. net lending amounted to 7. The rapid fall in inflation was entirely due to the gradual loosening in inflationary pressures from commodity prices and food products.5% 21. furniture) and machinery products. In 2008. article 2.565 million Euros.9% on a year-onyear basis. in 2008 the volume of transactions amounted to 63. particularly in machinery.788 1.2% Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita. Bank of Italy. These subsidies apply to instalments calculated on the basis of a rate which is equal to the larger rate between 4% and the ongoing rate which is stated in the mortgage agreement.1% 2.0%.0% in 2007).3% n/a Italy. while at the same time a slowdown in private investment was recorded.24 6.7% 66. In 2008.4% compared with the same quarter in the previous year).1%. Source: EMF. EUROSTAT.8% 49. 2008 -1. suffered from slackening global demand for investment goods. Approximately 47. equipment and transportation (-8.1% in July and August to 2.EU27 country reports Italy By Angelo Peppetti.4%.2%). During 2008.3% 5.23 311.5% 6.3%.5% (2. reached 6.8% 3. this decrease was particularly marked in investment goods (-5. Italian Banking Association Macroeconomic overview In 2008.1% in 2007.0% 80. All the manufacturing sectors. 2007 1. Italy= 2002 2008 EMF HYPOSTAT | 33 . terms of trade and the quantities exchanged decreased.13 305. During 2008. As regards covered bonds.2% n/a Housing and mortgage markets In 2008. ECB. whereas gross lending amounted to approximately 85 billion Euros.2 billion Euros. at an aggregate amount of 5 billion Euros.488 million Euros in 2007 to 311. for the purchase.8%. the demand for exports dropped by 7.4% on 2007) which dramatically weakened during the last quarter of the year (-7. which introduced such funding instruments into the Italian system. the unemployment rate continued to rise.928 0.488 5.0% 6. which after the rise in exports of the previous two years. It aims at ensuring the repayment of mortgages considering the financial needs of mortgage borrowers.087. recording the worst drop since the 1974-75 economic recession.5%.23%. in fact. which represented an annual increase of 2. The decrease in the overall volume of imports exceeded the reduction in the volume of exports.8% 12. This refers to all residential mortgages. Household consumption expenditure also fell by approximately 1. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Italy.2% in December. which is remarkably lower than the 2007-2006 increase (10. real GDP decreased by 1.0% 3. the consumer price index rose by 3. this initiative was supported by an agreement signed by the Italian Ministry of Economics and Finance and the Italian Banking Association (ABI) on 19 June 2008.000 renegotiations have been concluded. which represented an annual decrease of 73. Article 3 of the Italian Legislative Decree 93 dated 27 May 2008 defines procedures and criteria relating to the renegotiation of adjustable-rate mortgages. In 2008. which amounted to a 9.0% 19. suffered from a sharp reduction in exports.225 sales were recorded.20% in 2007.5 billion Euros.1% compared with 2007 data when 806. paragraphs 1 to 3 of Italian Legislative Decree 185/2008 sets interest subsidies for the reduction in instalments of adjustable-rate mortgages during 2009. The value of outstanding residential mortgages increased from 305. € 000s Total value of residential loans.0% 19. As the global economic crisis deepened. two relevant legislative measures were introduced in order to support residential mortgage borrowers. 2008 GDP growth 0. Despite the falling number of sales in 2008. since the enforcement of Law 80/2005. On the whole in 2008.5% 80. Consumer price inflation decreased from 4. the first issuances of covered bonds amounted to a total of 6. compared to 6.8% 5. Moreover.788 million Euros in 2008.587 transactions signalling a drop of 15. reaching 6.9%).3% 6. as well as the gradual worsening of economic conditions in the major global markets negatively impacted the Italian foreign trade balance: indeed. construction and renovation of first homes. the so-called ‘made-in-Italy’ products (leather. Funding As regards the securitisation of credits related to mortgage contracts.8% 7. both the high increase in the price of raw materials. In particular. originated prior to 29 May 2008. house prices remained fairly stable.29% in 2008 compared to 5. recording an increase of 1.7% decline on the previous year. EU27. ABI Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data.
6% 0. The share of government and central bank liabilities over external debt increased from 4.3% in 2006.9% in 2007 and 86. Deteriorating financial positions of domestic enterprises.2% were denominated in Euros and 2.0%) and gross capital formation (-13.5% over 2007 and totalling 0.1% recorded in 2007. Total outstanding residential lending amounted to 7.6%.2% to 8.4%34. The Bank of Latvia.18 7. this was the most severe decrease in GDP among EU27 countries.319 in 2007. The Bank of Latvia.4% 6.0% 7.24 6. 34 | 2008 EMF HYPOSTAT .3% 5. € 000s Total value of residential loans.35 The share of bonds (including mortgage bonds) and other debt securities on total bank liabilities also decreased to 0.507. 4 banks in Latvia have issued mortgage bonds: Trasta Komercbanka.4% in US dollars.928 0.2% 3. After a decade of sustained GDP growth during which Latvia benefited from one of the highest economic growth rate in the EU27. Net residential lending fell by 76. the average value of a housing transaction in 2008 fell by 26. housing completions in 2008 fell 13. real GDP fell in 2008 by 4.0% 33.087. Latvia negotiated an IMF Stand-By Arrangement for economic stabilisation and restoration of economic growth. The outstanding amount of covered bonds in 2008 was 95 million Euros. representing a 1. By year-end. The government received the first credit tranche of 589.7% 7. The number of building permits fell by 29. 46. The Bank of Latvia. Eurostat.5% 21. The level of unemployment rose to 7.5% by year-end.0%.5% by year-end 2008.96 6.220 million Euros.6% of GDP in 2008. the Bank of Latvia.2% 31 32 33 34 35 36 Sources: ECB.0% in 200636.0% of GDP. recording one of the deepest falls among EU27 countries. The Bank of Latvia. Facing a deep economic recession and bound to defend convertibility of the Lat with Euro under a currency board. Latvia.6 million Euros in December 2008. The interbank rate for domestic currency loans (RIGIBOR) increased throughout the year reaching 13.4% of 2008 GDP.0% 10. Central Statistical Bureau of Latvia.9% 0. Total covered bond issuance was 11 million Euros in 2008.0% 31.3%.6% of the external debt.0% in 2007 to 8. The increase in house prices and construction experienced over previous years could not be sustained by domestic demand.7% 2.4% in 2007 2007 and 2. Annual Report 2008. reaching a total of 4. recording an annual increase of only 7. Funding Deposits are the main funding source in Latvia. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita. Although there is no official data on house prices in Latvia.8% for the years 2008. Annual Report 2008.0% 3.220 n/a 6.62%. 2007 and 2006 respectively.5% rise over 2007. slower activity in construction and tighter lending were the main factors behind investment contraction. despite easy access to lending. falling private consumption (-11.8% -4.2%)31. up by 163. interest rates on loans for house purchases denominated in Lats rose to 6. Consumer prices increased in 2008 with average annual inflation reaching a high of 15.4% in 2008.EU27 country reports Latvia By Rodolfo Labadie. well above the 10. Real GDP contracted because of falling domestic demand (-13.8% as end of 2008 compared to 1.084 units.0%).8% 12.4% compared to 43. EMF Macroeconomic overview In 2008 the Latvian economy suffered from adverse external financial and economic conditions.5% and 48.5% 15.1% 87. The current account deficit reached 13. after four years of record growth. Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data. Baltic Trust Bank and Privatbank. Latvijas Hipotēku un Zemes Banka. Latvia=2007. with banking sector holding 62. At year-end the government deficit amounted to 4. EU27. Latvia. Tax revenues decreased sharply as a result of dampening economic growth and shrinking domestic demand33. To date. only 13. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Housing and mortgage markets After years of growth the Latvian housing market began a sharp contraction.1% on an annual basis to 494 million Euros. this was the highest inflation rate recorded among EU27 countries in 2008. After reaching a record high of 9.7% of outstanding mortgage loans were denominated in local currency whereas 85.6% 10.726 n/a 5. while collapse in consumer confidence and rising unemployment underpinned private consumption32. It appears that funding sources have become more constrained with the share of deposits to total liabilities of Latvian banks having decreased each year with the ratio equalling 42.3% 87. 2008 2007 0.7% on an annual basis. Central Statistical Bureau of Latvia Source: Eurostat.4% 66. Mortgage lending sharply decreased.8% 49.
8% 49.89% at the end of 2008 (it was 6. i.8% (compared with 4. € 000s Total value of residential loans. The yearon-year increase recorded in 2008 was considerably lower than in 2007.24 6. With limited market liquidity.0% in 2008 vs 8. 544 million Euros in absolute value).1% of all liabilities at the end of 2008 (it amounted to 11. During the year. The increase in interest rates was higher for loans denominated in Lithuanian Litas.44 4. The three–month VILIBOR went up to 9. The reason for the slow down in first half of the year was the tightening in lending criteria and a deterioration in consumer sentiment due to the crisis in real estate markets worldwide.853 n/a 5. but most agree on a decrease from 15% to 20% on a year-on-year basis. Outstanding loans to households for house purchase increased by 14.5% of all liabilities at the end of 2007). which severely hit the young economies of the Baltic countries.5% reaching 5.e.65% at the end of 2007) and six–month VILIBOR reached 10.3% 5. Funds in parent banks went up to 11.66 5.0% 8. much lower than in neighbouring Latvia and Estonia.0% 17.7% 5.1 billion Euros and comprised 46.18% in the end of 2007).575 million Euros at the end of 2008.7%.9% at the end of 2007). Eurostat. Statistic Bureau of Lithuania Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data.3% 5.0% 17.3% n/a 66. Interest rates on loans for house purchase rose during 2008.0%) and slowed down in comparison with 2007 (3. GDP year-on-year growth in Q4 2008 was negative (-2.5% n/a 4. Average harmonised index of consumer prices inflation reached 11.8% in 2007). 2008 2007 0.25% in December 2008. the supply of new housing outpaced demand. Lithuania= 2008 2008 EMF HYPOSTAT | 35 . the respective rate was 5.e. Deposits and funds from parent banks were the main funding sources for Lithuanian banks.EU27 country reports Lithuania By Jonas Grincius.7 billion Euros. and this further contributed to the decline in prices. The Vilnius interbank offered rate (VILIBOR) for loans in Lithuanian litas increased considerably. 97%.1 billion Euros during 2008.928 0. The weighted average interest rate on Euro-denominated loans to households for house purchase was 5. representing 36. Residential prices grew by around 4% during the first quarter of 2008. especially in neighbouring Estonia and Latvia. Estonia and Latvia. into economic recession.8% 12.0% 3.575 n/a 5. Bank of Lithuania. estimates of the annual decrease in house prices vary.3% at the end of 2007).3% 1.087. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Lithuania.5% 1.3% in Lithuania at the end of 2008. The weighted average interest rate on LTL-denominated loans to households for house purchase was 8. The dramatic changes recorded over the second half of the year were triggered by the global events.6 billion Euros. Lithuanian banks began to raise funds in the interbank market. but was also higher than the increase on the previous year recorded in the other Baltic countries – Latvia and Estonia. as those countries experienced sharper mortgage business declines. while the respective rate was 7.1 billion Euros and included 46.2% Sources: ECB.5% 21. The total amount of deposits reached 11. Funds in parent banks or in the same group of banks increased by 3.8% 3.15% at the end of 2008 (it was 7.8% 7.8% 11.1% in 2008 (it was 5. mainly due to increasing interbank rates and increasing margins.8% in 2007). remained stable during the second quarter and started decreasing during the third and fourth quarters. Funding As the amount of deposits started to decrease rapidly towards the end of 2008 (the decrease recorded in 2008 was of 4.20% in December 2007. Housing and mortgage markets The percentage of privately owner-occupied dwellings out of the total dwelling stock remained at the level of 2007. The unemployment rate rose by 1. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita.69% in December 2008. representing 49.77% in December 2007.3% of all liabilities at the end of 2008 ( 27. Lithuania. Total residential mortgages as a percentage of GDP were 17. i.9% on the previous year and reached 5. Parex Bank Macroeconomic overview Despite the ability to resist the impact of the global downturn in first half of 2008 Lithuania joined two other Baltic states.1% 97.8% 97. EU27.
24 6. Representative mortgage interest rates rose from 3.847 1.47% in 2007 to 4. Luxembourg. The main driver for the negative performance of the economy was the decrease in domestic demand: gross fixed investment slowed down (1.940 1.2% increase recorded in 2007 and increases for four consecutive years prior when economic growth was above 4%.6% 3.8%).5% to 43. but rather continued to show signs of stabilisation: after the 9.47%). In terms of percentage of GDP. EMF Macroeconomic overview Like most of the EU’s advanced economies in 2008.5% of GDP).9 billion Euros) which was the highest year-on-year increase recorded among EU15 countries.EU27 country reports Luxembourg By Alessandro Sciamarelli. Despite the general worsening macroeconomic conditions.2% 2. the main funding source for mortgage lending in Luxembourg continue to be deposits.1% vs. but the current account balance in 2008 was still in surplus (at 5. other sub-components of domestic demand also performed poorly.1% in 2008 on the previous year (amounting to 15. The number of building permits issued decreased by 28.934 in 2007).6% 38.928 0.6% on 2007 (4.6%).9%). but they remained below the euro area level (5.9 billion Euros. Source: EMF. albeit declining from 2007 (9.0% 43. Luxembourg= 2008 36 | 2008 EMF HYPOSTAT . The rise in the consumer price index accelerated in comparison to 2007 (4. Luxembourg fell into recession as a consequence of the deterioration in the international macroeconomic environment: real GDP growth rate on the previous year was negative (-0.75% in 2008.8% 49.6% versus 1.5% 21.5% 29.1% 66.0% 3. reaching 4.0% of outstanding residential lending.7%).93 15.5% 4. after a 5.6% average annual increase in house prices recorded between 2000 and 2006. In 2008. mortgage lending also increased and went from 38.9% 4. EU27.2% Housing and mortgage markets Housing activity slowed down sharply in 2008.2% in 2007).7% 4. due to the inflationary pressures over the first half of 2008.8% 12. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita.1% 75. by 2. especially investment in equipment (0. the government deficit to GDP ratio was still positive (2. while government gross debt doubled in comparison with 2007 but remained at very low levels (14.5%). Central Bank of Luxembourg. 2. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Luxembourg. € 000s Total value of residential loans. Statistics Luxembourg Funding Although Luxembourg was one of the first entrants in the ‘new’ Covered Bond market in the EU since its internationalisation in the late 1990s.3% 5.5%.7% 74.0%.9% 5. which was equal to 0. in Luxembourg house prices did not fall from the level reached over the previous year. ECB. in 2008 the housing market also recorded the same modest growth rate in house prices as in 2007 (1.3%) and households` consumption (0. These figures did not change substantially in comparison to 2007. mortgage covered bonds amounted to 160. Contrary to what happened in many EU housing markets in 2008. 2008 2007 0.7%) after the bullish 11. Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data.9% 4.03 13. The unemployment rate also increased.087. Residential mortgage lending market in absolute values grew by 15.2% 7.5% 0.7% of GDP).9% (it was 4.017 units in 2008 vs 4. Exports fell markedly. on the previous year.8% increase recorded in 2007. Eurostat.5% 32.8% -0.4% of GDP and to 1.8% 1.8%).
EU27 country reports
By Peter Sant, Bank of Valletta
During 2008, the Maltese economy recorded an increase of 2.7% in real terms. GDP per capita at current market prices amounted to 14,000 Euros or 78.9% in PPS (Purchasing Parity Standards) relative to the EU-27 average. The effects of the international financial crisis started to impact in the fourth quarter of 2008, when quarter-on-quarter growth in gross domestic product fell into negative territory. This was due in large part to fewer tourists visiting the country and lower export orders in the electronic goods, automobile component and pharmaceutical sectors. The unemployment rate declined from 6.4% in 2007 to 5.9% in 2008. In 2008, the labour force was 171,316 of which 10,790 were unemployed. The number of persons working in the private sector totalled 113,467 and those in the public sector totalled 47,059. Due to the rise in the prices of water and electricity, the inflation rate surged from 1.3% in January 2008 to 4.3% in December 2008; average annual inflation was 4.7%.
Losses in asset portfolios exceeded additional households’ deposits and bond holdings, while falling housing prices, approximately 10.0% on a year-on-year basis as at end-March 2009, reduced the value of housing wealth. Households are also finding it more difficult to service their debts. This is evidenced by an increase in non-performing loans. Non-performing mortgage loans as a percent of outstanding loans increased from 2.1% in 2007 to 2.4% in 2008 and other credit non-performing loans rose from 4% to 4.5%.
All mortgage loans originated by commercial banks are funded with deposits. In 2008 total resident customer deposits totalled 9.4 billion Euros whilst the loan to deposit ratio was 70%.
EU27, 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita, € 000s Total value of residential loans, € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending
Malta, Malta, 2008 2007 0.8% 2.7% 3.9% 7.0% 3.7% 5.9% 4.7% 75.0% 38.8% 5.43 2,228 1.0% 4.0% n/a 6.4% 0.7% 74.1% 37.6% 4.94 2,021 -1.8% 5.4% n/a
Housing and mortgage markets
The number of household dwellings is approximately 135,000 units. In the years 1995-2005 home ownership increased from 65% to 75%. During 2008, the number of building permits for dwellings issued by the Malta Environment and Planning Authority decreased by 40% on the previous year to a total of 6,836. This was due to a decrease in market demand for apartments, maisonettes and terraced houses. In 2008, the Property Price Index registered an increase of 1.0% on 2007. There are currently over 53,000 vacant properties in Malta, of which roughly 8,000 to 10,000 are for sale at any point in time. The Maltese Government has allocated through the National Housing Authority an annual budget of 4.1 million Euros as capital investment in social housing. The Housing Authority operates a number of interest rate subsidy and equity sharing schemes. Currently, the Maltese authorities are discussing a reform of the rental sector (i.e. commercial and private) and are planning some regulation ensuring that the reform programme is more marketoriented whilst maintaining a social safety net in place. The housing market experienced a significant fall in the prices of apartments and terraced houses. The total volume of mortgage lending for the purchase of residential housing totalled 204.9 million Euros in 2008, below the 245 million Euros registered in 2007. Total outstanding mortgages held by private banks in December 2008 amounted to EUR 2.23 billion which represents around 34% of lending to residents. Total amount of mortgage lending to GDP in 2008 was 38.8%. Mortgage interest rates fell from 5.44% in January 2008 to 4.03% by the end of the year. This fall in the interest rates was due to an increase in competition between domestic banks and a fall in the European Central Bank reference. Households’ interest payments during the first six months of 2009 were lower than in the corresponding period of 2008. The effect of a higher outstanding level of debt, both in terms of mortgage and other consumer credit (i.e. outstanding loans with banks), was more than offset by a decline in the weighted average interest rate paid by householders.
66.8% 49.8% 12.24 6,087,928 0.3% 5.5% 21.2%
Source: EMF, Eurostat, ECB, Central Bank of Malta, National Statistics Office of Malta
Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data. Malta= 2006.
2008 EMF HYPOSTAT |
EU27 country reports
By Marja Elsinga, Delft University of Technology
In 2008 the Dutch economy grew at a rate of 2.1%, a figure affected by the worldwide decline in economic growth, which was felt in the Netherlands particularly at the end of 2008 and thereafter. Compared to the 3.5% growth rate recorded in in 2007, this marked a considerable slowdown, but still put the Netherlands above the EU average (0.8%). The slowdown in economic growth was driven by a drop in exports, with the worldwide economic downswing causing a global decline in international trade. The figures for the Dutch labour market in 2008 were quite positive compared to the EU average, and also as compared to the previous year. The unemployment rate dropped from 3.2% in 2007 to 2.8% in 2008, marking the lowest unemployment rate in the EU27. However, the situation is evolving, with the economic downturn seriously affecting the labour market in 2009. In 2008, inflation in the Netherlands was higher than for the previous year, rising from 1.6% to 2.2%, but still remaining below the EU27 average (3.7%).
to decrease in the fourth quarter of 200837. The downturn in the housing market was also reflected in the figures for housing market transactions, which dropped from 202,401 in 2007 to 182,400 in 2008, a decrease of 10%38. The Netherlands has the highest residential mortgage debt to GDP ratio in the EU (99.1% in 2008). Factors such as increasing house prices, a healthy labour market, increasing incomes and the fact that 100% of the mortgage interest rate can be deducted from income tax, have all contributed to enormous growth in mortgage lending in recent years. Since 2005, net residential lending has slowed down; this decline continued into 2008, from 36,539 loans approved in 2007 to 30,550 in 200839. In 2008, the total value of outstanding mortgages taken out by households was 589,532 million Euros, which was an increase of 6.9% on 2007. The representative mortgage rate for new loans increased from 4.96% in 2007 to 5.34% in 2008 and during 2008 the fixed interest period shifted towards periods of one to ten years. The market share of mortgages with a fixed interest period of more than 10 years fell from 38% in 2007 to 19% in 2008, while the share of mortgages with a fixed period shorter than 1 year fell slightly, from 17.5% to 15%. The total number of foreclosures of dwellings owned by households who failed to repay their mortgages increased from 1,811 to 1,961. The Dutch government established a mortgage guarantee (NHG) for mortgages up to 265,000 Euros, which insures the lender for the losses incurred in the case of a forced sale of the purchased dwelling. Such a guarantee operates when the borrower cannot meet the payment obligations and is forced to sell the dwelling and when the outstanding mortgage is higher than value of the dwelling: this negative equity is then covered by the guarantee. In 2008, 927 losses were covered by this governmental scheme, for an average value of 28,500, Euros, which was lower than in 2007, as was the total loss. However, the decline in the number of foreclosures should be examined in the light of the housing price collapse in the early 1980s which showed that the number of foreclosures incurring a loss only started to increase two years after the start of the downturn. In response to the stagnation in the housing market, the Dutch Ministry of Housing has introduced measures to support the market40. The first measure was to increase the maximum limit of the NHG from 265,000 Euros to 350,000 Euros. This is a temporary measure which came into force on 1st July 2009 and will end in 2011. This measure aims to increase the number of housing transactions and the sales of newly-built dwellings, by providing the security of a guarantee to a larger group of borrowers. Another governmental measure was to provide financial support for housing construction, through a special fund amounting to 239 million Euros which will be granted to projects that meet certain criteria, including the provision of affordable dwellings and the rapid start to building projects. These funds will be granted in three stages: June 2009, late 2009 and 2010.
Housing and mortgage markets
The number of building permits issued dropped slightly, from 87,900 in 2007 to 87,200 in 2008, while the number of housing completions also fell, from 80,200 to 78,900, representing a decrease of 1.6%. So far, these figures show only minor effects of the worldwide economic recession. It should be noted that in the Netherlands the lag between the issuance of a building permit and the building completion is traditionally long and has been on the increase over the past few years. Moreover, the housing market is dominated by professional building companies that only start building after selling approximately 70% of the dwellings involved in the project. Therefore additional information concerning the number of new and planned dwellings sold would be valuable in this context. In the same period, the number of owner-occupied dwellings that were sold decreased by 30%, as a serious drop in consumer confidence resulted in decreasing demand. In the Dutch context, this drop in the number of sales due to the economic downturn will also negatively impact the number of completions at a later stage. Over the last decades, the share of owner-occupied dwellings in the housing stock has considerably increased, moving from 42.0% in 1983 to 57.0% in 2008. Nevertheless, the home-ownership rate is far below the EU27 average. The rental market is dominated by housing associations which provide affordable rental accommodation (accounting for 32% of the total housing stock). They also invest in owner-occupied dwellings. The private rental sector (which accounts for 11% of the total housing tenure) consists of institutional investors such as insurance companies and pension funds (6%) and private individuals letting one or more dwellings. In recent years there has been a shift in demand away from owner-occupied to rental dwellings and the share of housing production has changed accordingly. In particular, housing associations which had planned to build owner-occupied dwellings are now turning the dwellings into rental accommodation, planning to sell these when market circumstances improve. The Netherlands has experienced a sustained period of house price increases. Prices have risen, on average, from 60,000 Euros in 1985 to 248,000 Euros in the third quarter of 2008. Over the period 1996-2001, house prices increased by 10 to 20% per year on average. Since then, the increase has slowed to 4 to 5% per year. The annual average house price increase in 2008 was flat (-0.1%), after the 3.6% increase recorded in 2007. Quarterly figures reveal that house prices started
Monitor New Dwellings, Netherlands. RICS Housing Review 2008.
WEW (Homeownership Guarantee Fund Foundation), Annual Report 2008. Letter of Minister Van der Laan to the Parliament, June 2009.
2008 EMF HYPOSTAT
EU27 country reports
EU27, 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita, € 000s Total value of residential loans, € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending
Netherlands, Netherlands, 2008 2007 0.8% 2.1% 3.5% 7.0% 3.7% 2.8% 2.2% 57.0% 99.1% 35.94 589,532 -0.1% 5.3% 3.6% 3.2% 1.6% 57.0% 98.6% 34.14 551,530 3.6% 5.0% 2.8%
Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data. Netherlands= 2008.
66.8% 49.8% 12.24 6,087,928 0.3% 5.5% 21.2%
Source: EMF, Eurostat, ECB, Statistics Netherlands, Netherlands Bureau for Economic Policy Analysis, Kadaster/ Dutch Land Registry Office
2008 EMF HYPOSTAT |
EU27 country reports
By Agnieszka Nierodka, Mortgage Credit Foundation
The macroeconomic environment in Poland in 2008 was still very positive. Real GDP growth on 2007 reached 5.0%, although the growth rate slowed down in the last quarter to 2.9%. GDP growth was mainly driven by domestic demand (which increased by 4.8%) – largely due to the high growth rate in investment (7.9%), as well as in consumer demand (5.4%). Nevertheless, it should be noted that growth rates in all these indicators decelerated in Q4 2008. At the end of 2008, the unemployment rate rose to 9.5% (7.1% as a yearly average) whereas the active population increased by 2.2%. In 2008, the increase in the average gross wage and salary in the private sector amounted to 5.5%. Inflationary pressures in 2008 were still considerable – in annual terms the inflation rate stood at 4.2% (in December it was 3.3%). In order to keep inflation under control, monetary policy remained restrictive: in June 2008 the reference interest rate was at 6%. However, by the end of the year interest rates were brought down. In December, the central interest rate was cut down to 5%.
foreign currency-denominated mortgages, so that they must inform the client on the level of foreign currency spread they are exposed to, and inform the client about how this influences the monthly payment they are liable for; in addition, the customer will be granted the possibility to pay the installments directly in a foreign currency.
Access to funding became the main problem for Polish banks in 2008. The greater share of the credit portfolio is funded through deposits, which although showing signs of continued growth, were not sufficient to cover increasing funding needs. To some extent, the problems in accessing funding capital restricted the volume of new mortgage lending. As in previous years, covered bonds issuance did not make up the shortfall in funding for Poland. New issuance decreased by about 4% in comparison with 2007 (new issuance in 2008 amounted to 197 million Euros). There were no securitisation transactions on the Polish market in 2008.
Housing and mortgage markets
In 2008, over 165,000 dwellings were completed (representing a 23.5% increase in comparison with 2007). The number of building permits issued in 2008 amounted to over 220,372, half of which were for individual investors. At the end of December 2008, about 687,400 dwellings were under construction. In 2008 the trend in prices which was observed since the second half of 2007 continued. Prices – especially in big cities - started to fall, although this decrease remained moderate. Further decreases are expected even though the availability of housing remained very limited: in biggest cities, the number of square metres of housing available for an average monthly salary was about 0.4. At the end of December 2008 there were around 1.3 million mortgage credit agreements outstanding. In 2008 about 286,000 new residential mortgage loans were granted (a decrease of 9% on 2007). At the end of December 2008 Polish households` residential debt amounted to 192 billion Zlotys (56.5 billion Euros), which constituted an increase of 57% in comparison with December 2007. It must be stressed, however, that growth in the outstanding portfolio was in part a result of the depreciation of the Zloty, as about 50% of the portfolio are CHF-denominated loans. The new mortgage lending in 2008 amounted to 57.1 billion Zlotys (15.1 billion Euros). In the second half of 2008 the majority of banks tightened their credit policy. Firstly, the supply of foreign currency-denominated loans was constricted, then the banks restricted their lending criteria also with regard to zloty-denominated loans. In the last quarter of 2008, 85% of Polish banks tightened their credit policy, and 90% of them lowered their maximum LTV ratios. All banks imposed higher margins on residential loans, and 5% of them - imposed additional requirements regarding collateral. In December 2008 the Committee for Banking Supervision issued the “Recommendation S II concerning good practices regarding mortgage-secured credit exposures”, which imposed additional41 requirements for banks granting
EU27, 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita, € 000s Total value of residential loans, € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending
Poland, Poland, 2008 2007 0.8% 5.0% 6.6% 7.0% 3.7% 7.1% 4.2% 75.0% 15.6% 1.48 56,476 n/a 7.1% 1.0% 9.6% 2.6% 75.0% 11.7% 0.94 35,966 n/a 5.9% 1.9%
66.8% 49.8% 12.24 6,087,928 0.3% 5.5% 21.2%
Sources: EMF, EUROSTAT, ECB, Central Bank of Poland, National Statistics Office
Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate weighted average derived from EMF calculations based on latest available data. Poland=2004
1) the exchange rate can increase by a rate which corresponds to the maximum difference observed within the last 12 months 2) the interest rate will increase by the level of the difference between the max and minimum level of rates within the last 12 months, which was also applied to Zlotydenominated loans (so that the customer could compare the two loans) 3) both rates (Zloty and foreign-denominated) will increase by 400 basis points
The previous “Recommendation S I” was introduced in July 2006. It encouraged the banks to offer mortgages mainly in Zloty and, in case a customer opted for a foreigndenominated mortgage, the capacity of FX loan applicants was calculated against 120% of the value of the loan requested and the typical interest rate in the domestic currency loans was applied. The bank was also required to present to the client a detailed information about risks associated with a foreign-denominated mortgage, together with the calculation of the installment of FX loan assuming that:
2008 EMF HYPOSTAT
€ 000s Total value of residential loans.º 171/2008 seeks to eliminate barriers to the renegotiation and transfer of mortgage credit.7% 2.º 88/2008 requires financial institutions to use the 360 days market convention in order to calculate both the interest and the rate to apply for mortgage credit.17% in the last quarter of the year.0% 63. The ratio of non-performing loans to total mortgage credit increased over the previous year.4% 76. 2008 2007 0. Despite the ECB`s repeated cuts in its central interest rate.5% (6. the Decreto Lei n. gross residential lending decreased by 31. which severely impacted families and businesses and had a negative effect on unemployment. Outstanding mortgage bonds amounted to 15. The Aviso n.1%.EU27 country reports Portugal By Jesus Martins.2% in 2007). Portugal= 2007 2008 EMF HYPOSTAT | 41 .7%.1% 2. which represented a growth rate of 94. At the end of 2008. This was a slowdown in comparison with the 10% increase recorded in 2007.3% 9. In 2008. In 2008.9% 11.52 101.8% 66. Finally. INE). the reduction in the price of commodities and increased unemployment.91 105. due to the time lag in the transmission mechanism. This negative scenario is also reflected in other housing and mortgage market indicators which recorded a contraction in activity over the previous year.210 million Euros. Caixa Economica Montepio Geral Macroeconomic overview The strong decline in investment and exports associated with the international financial and economic crisis were among the factors behind the stagnation of the Portuguese economy: real GDP growth rate in 2008 was flat. at 7. reaching 0.3% 5. which was an increase of 5. Three important legislative measures were taken during 2008.5%.1% on 2007 and the residential house price index fell by 6% (according to the Bank Evaluation on Housing published by the Statistical Institute of Portugal.7% 7.411 million Euros. This was due to the sharp contraction in economic activity. although this represented a slight decrease from 8.0% 1.094 -1. driven by factors related to the international crisis. contained detailed rules which financial institutions are obliged to comply with when promoting and selling mortgage products. The above-mentioned factors also explained relatively high unemployment levels.5% 21.8% 12. It contains a rule which bans the collection of any fees associated with the renegotiation of mortgage credit.8% 49. Source: EMF.087. Total mortgage-backed securities outstanding in 2008 amounted to 14. the Decreto Lei n.928 0.0% 3.1% in 2007.5% 8.3% 5.7%.0% 62. The inflation rate has declined dramatically.7% 7. Portugal. mortgage interest rates in Portugal showed marked declines only in the first quarter of 2009.9% 7. ECB.24 6.86% in the first quarter of 2008 to 2. deposits continued to constitute the main funding tool for mortgage credit.2% Housing and mortgage markets At the end of 2008. Moreover. EUROSTAT. which represented an annual increase of 4.8% 0. released by the Bank of Portugal.270 million Euros in 2008. the total stock of mortgage lending was 105. The ratio of all non-performing loans (residential and commercial) to total credit also went up from 1.º 10/2008.1% 9. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Portugal.1% on 2007. The savings rate of individuals as a share of disposable income was 6.2% 5. the ratio of non-performing loans to mortgage credit was 1.5% on 2007. EU27.210 -6. Bank of Portugal Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data.8% at the end of 2008. Average inflation in 2008 was 2.7% 76. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita.
000 in 2007.9%. Most of the mortgage funding comes from deposits and capital from private financial institutions.20 4. The average Loan-to-Value ratio decreased from 75.9%). allowed borrowers to finance larger amounts. The slowdown in the fourth quarter was mainly due to the decline in industrial production and domestic consumption.3% 5.8% 12.618 permits issued. ECB.0% 4. 42 | 2008 EMF HYPOSTAT .9% in Q3 and then to 70. while active interest rates remained relatively stable. Romania. (6. The inflation rate decreased to 6.8% to 4.6% in December 2007. by year-end prices began to decline. Romania= 2002 42 National Bank of Romania.7% 5.1%. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita.2%) and EU27 countries (which decreased by 1. May 2009. € 000s Total value of residential loans. Until Q3 2008. and lenders tried to find innovative ways to sell their mortgage loans. In 2008.0% 3.485 million Euros) which represented a 28.000 in 2008 from 521.22% in 2007 to 0.2% Housing and mortgage markets Homeownership is traditionally high: currently at 97%.25 5.9% 97. Source: EMF. outstanding mortgage debt totalled 20. The unemployment rate was 5.7%.9% 97.5% n/a 66. There is no official data available regarding the evolution of national average house prices. Lenders began tightening underwriting during 2008. Annual average inflation was 7. The number of transactions decreased to 484. Most of the products were dropped by the end of 2008.5% 0.8% 7.092 or 8% higher than 2007 which saw 56. The number of residential completions in 2008 was 36% higher than in 2007.1%).7% increase over 2007.42. The negative effects of the international financial crisis only affected GDP growth in the last quarter of 2008. 2008 2007 0. Other products included various teaser-rate schemes to make first year payments affordable. The lending activity of legal entities and individuals.8% 7. 92. Central Bank of Romania.0% n/a 6.139 and the number of building permits issued was 61.0% of the mortgage loans in the domestic market were foreigncurrency denominated. EU27.0% 0. higher than in Q3 2008 by 40 basis points but still below the unemployment rate in Q4 of 2007 (6. The mortgage loans denominated in foreign currency were cheaper than the mortgage loans denominated in domestic currency and therefore. In 2008.2% in Q2 to 70. the market was characterised by a range of mortgage products including adjustable interest rate and fixed interest rate loans with a grace period.087.03% in 2008). EUROSTAT. exceeding the targeted inflation band of 3. when the economy grew by 2.24 6.0% 3.5% 21. 3 points above the 2007 level (4.35% in 2008. Significantly.485 n/a 7. Also passive interest rates in Euro increased.1% 6.9% in real terms compared to the same quarter of 2007 which saw growth at 8.EU27 country reports Romania By Sergiu Oprescu. up from 47. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Romania.2%.8% but remaining below the central bank’s forecast of 6. Funding In 2008. Lending rates increased because of severely constrained liquidity.4%).8% in Q4 2008.928 0. Anecdotal evidence indicates that in 2008 house prices reached their highest peak since 1990. Alpha Bank Romania Macroeconomic overview 2008 was the ninth consecutive year of positive economic growth during which real GDP grew by 7.2% 7. Romanian Institute of Statistics Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data.299 in 2007 to 64. Average interest rates in the domestic currency rose throughout the year. year-on-year GDP growth recorded in the fourth quarter outpaced average growth of both the Euro area countries (which declined by 1. The average interest rate for a new mortgage loan denominated in Euro was higher in 2008 than in 2007. the domestic mortgage market became quite competitive. Starts totalled 143.4% 4.46% in 2007 and 7.8% 49.3% by end 2008 from 6. However. The ratio of delinquent loans to total outstanding mortgage credit has increased from 0.414 in 2008.7% in Q4.262 n/a 6.899 million RON (5.
5%.0% on 2007. reaching 4 billion Euros in 2008. Because of increasing delinquencies the majority of Slovak banks. capital market funding has become a more important part of the mortgage sector. Slovakia.9%. preventing any significant devaluation. available including 2.5% or an annual average of 3. The typical mortgages offered in Slovakia are fixed rate with terms primarily of 1 and 5 years.087. Due to increasing property prices during 2006. this was the highest increase since 1991. after a long period of decline. The end of the year was dedicated to preparations for entering the Euro area on January 1st. Slovakia= 2008 2008 EMF HYPOSTAT | 43 .50%.0% 11. Out of that amount.184 units. tightened underwriting criteria which included lowering average LTVs to 70 – 90%. the real estate market cooled. Although the volume of residential mortgages increased. Banks tightened mortgage underwriting standards and consumers became hesitant to purchase in an economic climate of uncertainty. In the fourth quarter of 2008 real GDP increased as much as domestic demand. Further impacting mortgage production was the cessation of new mortgage applications approval from midDecember though the end of the year. Slovak Statistical Office.0% of the total volume of loans provided to individuals.24 6.9% 88. In 2008 the payment subsidy was increased by 2. rose in 2008 ending the year at 8. During the second quarter of the year.3%.8% 6. While there were decreases of up to 20. National Bank of Slovakia.4% in 2008.529 24. The average mortgage interest rate in 2008 was 6. The National Bank of Slovakia responded to changes in the world financial markets by lowering its key interest rates three times decreasing it from 4. mortgage banks began offering high LTV (up to 120%) mortgages. 3 and 10. in the second half of 2008. Loans provided in the past years.8% 49.8%.21 6. 83% were mortgage bonds. However.3% 11. moving from 10.5% subsidy from the government and an additional 1. Inflation rate measured as HICP increased ending the year at 3. Housing and mortgage markets In 2008 housing starts totalled 28. especially in 2007. 2007 and the first quarter of 2008. Again.126 SKK in mid 2008.536 n/a 6.2% 1.4% in 2007 to 6. however. Average payment to income ratio was 33.EU27 country reports Slovakia By Miroslava Mitkova.3% 5. Demand for mortgages rapidly declined in 2008.536 million Euros.7% 9. The final SKK/EUR exchange rate was fixed at 30. Between 2007 and 2008 the annual GDP growth rate slowed. other terms are. 2009.4% 10.9% 1. € 000s Total value of residential loans. recording an annual increase of 2. Loan to deposit ratio decreased to 79% thanks mainly to a considerable increase in deposits recorded in November and December.321 units and completions of apartments totalled 17.3%.25% to 2. overall average home prices did not decrease appreciably in 2008.5% 21. have experienced higher than average credit problems most likely caused by high LTV lending.2% Source: EMF. Defaulted mortgage loans total approximately 4. as well as speculation.2% 42. some banks stopped offering “no proof of income” mortgages and other risky loan products.0% 3.4%.1% 1. Most mortgage bonds were issued between April and August 2008 totalling 843 million Euros. Property prices were at record highs at the beginning of 2008. The number of apartments completed in 2008 increased by 711 apartments.0% subsidy from the lending institution. Eurostat. The total volume of outstanding residential mortgages in 2008 was 8. ECB. recording an annual increase of 4.58 8.9%. 2008 2007 0.0% in resale homes. this was due to the conversion of banking systems from SKK to Euro. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita.9% 81. The subsidy was introduced in 2007 initally providing a 1. The volume bond issuance increased by 7. their share of GDP was still relatively low in comparison with the rest of the EU27. Growing property prices were driven by enormous demand.20%. EU27.2% n/a 66. Defaulted loans increased annually by 35. Hypocentrum Slovakia Macroeconomic overview Economic growth began to slow in the second half of 2008.8% 12.4% 7. Moreover.0% 6.0% 13. The preparations for the adoption of the Euro contributed to an increase in deposits at private banks. The weakest period for new mortgage loans was recorded in November and December. Young borrowers can apply for a payment subsidy from the government.928 0.5% 3. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Slovakia. Ministry of Construction and Regional Development of the Slovak Republic Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data. Funding Funding of commercial bank lending comes primarily from deposits. The unemployment rate.
In 2008 gross residential mortgage lending totalled 672 million Euros. requiring continued borrowing in the form of foreign loans.32 2. Lenders have responded to the increase in non performing loans by increasing impairment charges and tightening underwriting.000 completions. which closed the year at 6.0% 9.0% at the end of 200843. In December 2008 the spread on EURIBOR indexed mortgages was 54 basis points higher than the year-end 2007 spread.5% 6.8% 12. Statistical Office of Slovenia Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data.. According to the national statistical office.3% n/a 66.2 % in 2007 but declined to 27.03% in 2008.1% in 2008 and 8. 2006 recorded 2. 2008 2007 0. applications for building permits decreased in 2008 to 7. Despite this record. 43 Bank of Slovenia. 2008.8%.8%. In addition. average annual unemployment for the years 2006. In 2008 banks recorded an increase in non performing loans which peaked in the fourth quarter. Housing and mortgage markets In 2008. no transactions have been completed. Net financial liabilities to the rest of the world increased to 30. By year-end 2008 the average effective interest rate was 7.6% in 2008.5% 82. Slovenia.9% n/a 4. 2007 and 2008 were 6.7% 4. unemployment from 2006 through the end of 2008 has steadily trended downward.395 n/a 6.5% 21.EU27 country reports Slovenia By Andreja Cirman and Srna Mandič.8% rates of inflation. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita. the second half of 2008 saw a sharp decline in housing starts. Most lending was done at a variable rate.087. Funding Mortgages are funded primarily by deposits and to a lesser extent by issuing corporate debt (which is sold primarily to foreign investors).0% for new dwellings. Financial Stability Report.8% 49.5%.24 6. Approximately 82% of the housing stock was owner-occupied giving Slovenia one of the highest homeownership rates in the EU27. Per capita income is now approximately 93% of the EU27 average. ECB. 4. The robustness of the economy was in part a result of large levels of infrastructure investment.9% and 4.5% and 2007 recorded 3.5%. reduced confidence in the financial markets and the resulting loss of liquidity resulted in the curtailment of lending by commercial banks. the housing market in 2008 recorded annual decreases in property prices of 2.0% 8. including reducing the average LTV on mortgages. Payment-to-income (PTI) ratios were also reduced in 2008.2% Source: EMF.5% at the end of 2007 to 52. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Slovenia. The proportion of loans with PTI equal or above 33% of personal income decreased from 58. EU27.).0% of GDP The financial turmoil in autumn 2008.0% in 2007.000 in 2007. the spread increased on all new mortgages. Eurostat.2 % in 2008.0% are fixed.000 units. € 000s Total value of residential loans. This is a higher level than previous years.500 from 9. Slovenia= 2008. the total housing stock was 830.2% on the previous year to 1. 44 | 2008 EMF HYPOSTAT .7% of mortgages were tied to EURIBOR.0%.8% 82.1% 1. University of Ljubljana Macroeconomic overview GDP growth in 2008 remained higher than the EU27 average ending the year at 3. The spread on the LIBOR loans 130 basis points higher than year-end 2007. The gap between investment and savings as a proportion of GDP widened further in 2008. 2009. Mortgage debt outstanding as a percentage of GDP was 9.3% 5.68 3.4% tied to LIBOR in CHF and 19.8% 3.0% in 2007 to 52. In 2008. The saving rate as a ratio of gross saving to gross disposable income was 28.500 in 2007. Housing construction has been robust with the number of completions increasing over the previous year since 2000.0% 3.4% 5.928 0.9% 3. The country ended 2008 with an annual average inflation rate (Harmonized Index of Consumer Prices) of 5.8% 7. it was much lower than 2007.670 n/a 6. Similar trends were seen in other economic indicators. 2008 ended with a nine-year high of approximately 10. Starts totalled approximately 7. Bank Of Slovenia. Bad loans as a proportion of classified claims rose by 0. After a long period of increasing house prices.4% respectively. Despite this relatively strong growth.9 % for second-hand dwellings and 3. In 2008 47.0% 1. 30.000 units in 2008 down from 11. Although legislation exists that allows banks to issue mortgage-backed securities. The average Loan-to-Value (LTV) on new housing loans decreased from 60.
8% in 2007 (though the yearly average inflation was at 4. around 971.088. and it recorded positive monthly developments despite the large drops in both volumes and number of new mortgage loans subscribed. So far. and so on). implemented in 2008 a set of measures aimed at: Restoring confidence in the market. while the share of mortgage backed securities (MBS) increased. but there was a clear slowdown in comparison with 2007 (5. in collaboration with the Autonomous Administrations and other national institutions. With regard to the third objective. up to a maximum of 500 Euros per month.946 million Euros. Housing and mortgage markets As regards real estate activity. Throughout 2008.EU27 country reports Spain By Irene Peňa and Lorena Mullor. arrears in residential mortgage loans have strongly increased as a consequence of the higher interest risk in the Spanish mortgage market.4% in 2007 to 11. the initial increase in the Harmonised Index of Consumer Pricesat slowed down during the year. The total value of outstanding mortgage covered bonds (‘cedulas hipotecarias’) and Mortgage Backed Securities was 492. As regards the breakdown of new issues. However. as far as changes in housing policy are concerned. Average house prices still recorded a year-on-year increase on the previous year (0. which had been slightly decreasing over the the last few years. the government raised the deposit guarantee fund from 20. from around 0. the volume of housing starts. As regards residential lending alone. the intensity of the correction in the real estate markets and the worsening of international economic conditions impacted the Spanish mortgage market. Overcoming the funding problems. In relative terms. which represented 100% of GDP. and the only positive contribution to growth came from government spending and net external demand. the share of the mortgage securities as a percentage of the total mortgage portfolio was around 45%. The progressive change in the breakdown of new issuances of mortgage securities was mainly due to the liquidity problems in the markets that have led credit institutions to use the MBS as the main collateral in their funding transactions.0% on 2007). At the end of December 2008. As far as the first two objectives are concerned.3% as a yearly average) and the data available for the first quarter of 2009 points to a further increase during the year. showing a large adjustment in the production of new dwellings as a response to the current drop in housing demand. the Government of Spain. compared to the much lower decrease recorded in the previous year ( -12.423 million Euros (which represented an increase of 8. the level of unemployment rose dramatically.4%).0%. mainly due to the behaviour of energy prices and the waning of both external and internal demand. As regards inflation. in the framework of the coordinated actions undertaken at the EU level. so that new lending activity remained at similar volumes to those recorded in 2003-2004 when the housing boom started. the high level of interest rates reached during the last three years has led to a rise in the share of doubtful residential mortgage loans to households. which compensated the negative effects of repayments on the mortgage portfolio. The domestic demand components that most contributed to GDP growth over the last years – consumption and private fixed investment.000 mortgage loans were subscribed amounting to 188. Supporting the segments of society who were most affected by the worsening of the economy.4%. during the first quarter of 2009 house prices decreased on a year-on-year basis by almost 7%.both recorded negative growth. where more than 90% of the mortgage portfolio was at variable rates.6% in 2007. the Spanish government approved a mortgage moratorium for the benefit of certain categories (for example. Against this new scenario characterised by a clear correction from record growth in previous years. Nevertheless. The government will assume a portion of the risk of default from these operations. which represents an annual growth of 25% in comparison with 2007. and also set up a scheme for the purchase of high-quality assets (Fondo de Adquisición de Activos Financieros) and provided a public guarantee for new debt issued by credit institutions.6%. people who have recently lost their jobs. the reference indexes of the Spanish market dropped markedly in the last quarter of the year.5%% in 2008 and remained far below the number of completions. total mortgage volume outstanding (residential and commercial) was 1.000 million Euros (residential and commercial).000 Euros to 100.000 Euros. compared to 2. fell by 41.000 Euros per depositor. Funding At the end of 2008.8%) and it also should be pointed out that the slowdown in annual growth rates in house prices has continued since 2004. As regards interest rates. in 2008. and even lower than those they initially paid when they subscribed their loans. This measure consists in postponing (for a period of up to two years) 50% of the amount of the monthly mortgage instalments. At the end of 2008 the unemployment rate reached 14% (11. These positive growth rates were possible due to the significant volume of new lending. 2008 EMF HYPOSTAT | 45 .3%). Interest rates for new mortgage loan contracts continued to decrease slightly also in the first quarter of 2009. at the end of 2008 it had increased yearon-year by a mere 1. or self-employed who have been forced to stop their economic activity. According to official statistics. The annual growth rate of the amount of total transactions in 2008 fell by 32.4% in 2005 up to more than 2% in 2008.1%). the year-on-year increase was 4. after reaching a peak in the three first quarters of 2008. Spanish Mortgage Association Macroeconomic overview The performance of the Spanish economy in 2008 showed a sharp deceleration which resulted from the combination of internal economic adjustments and the global financial turmoil.8% in 2008. and mainly referenced to an index (12-month Euribor ) which is particularly sensitive to changes in the ECB’s monetary policy.7%). compared to 3. Finally. for those mortgage loans which were signed before the 1st September 2008 and that do not exceed the total amount of 170.222 million Euros. the increase at the end of the year was slightly higher (4. since borrowers will face lower mortgage instalments than in previous years. There is no doubt that the decrease in the reference indexes in the Spanish market is going to have a huge positive impact on households’ budget during this year. in 2008 the mortgage lending market recorded a higher growth rate than the whole economy.9%. Indeed. the percentage of ‘cédulas hipotecarias’ in the total volume of mortgage securities decreased from 24. The new issues of mortgage securities accounted for 120. Real GDP growth was 0.
3% 2.1% 84.5% 21.1% 41.8% 12. Spain= 2008 66. Spain.9% 3.89 674.EU27 country reports EU27.3% Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data.3% 5.5% 62.6% 7.1% 61. € 000s Total value of residential loans.928 0.0% 3. Instituto Nacional de Estadistica.7% 8.7% 11.087.6% 46.3% 4.8% 0. Ministry of Housing. ECB.8% 5.8% 49.24 6.4% 14.0% 14. 2008 2007 0.2% Source: EMF.7% 5. European Securitisation Forum 46 | 2008 EMF HYPOSTAT . EUROSTAT. Bank of Spain.8% 87. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita.434 0. AIAF.676 5. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Spain.51 646.
0% 20. a stabilisation fund will be set up in order to manage potential solvency problems in any Swedish institutions. the Government also set up a guarantee scheme of up to SEK 1.8% caused an annual GDP drop.7% 66. ECB. unemployment figures are expected to increase considerably during 2009 and 2010.245 10.the housing association is the owner of the building and of the apartments in it. in late 2008 the Swedish Government introduced a plan to stabilise the Swedish Financial Market.7% 6. Swedish lending figures in 2008 cannot be directly compared with the earlier figures.7% 4. 2004 has introduced directly collateralised bonds (covered bonds). Mortgage institutions provided the greatest part of the loans. Sweden= 2007 49 Tenant-owned apartments are flats in a housing association/cooperation. Funding Covered bonds are the main funding source in the Swedish mortgage market. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita.200 units were completed against 30.2% in 2008.9% increase).2% at the end of 2007. this was a lower growth rate than what was recorded in 2007 (6.0% 60.9% from the previous year (22. Housing completions though. 2008 EMF HYPOSTAT | 47 . Among other measures. From a legal point of view.500 billion to support medium-term financing needs of banks and mortgage institutions.24 6.928 0.2% 3.EU27 country reports Sweden By Christian Nilsson.000 Euros). while a minor part of the loans was granted by banks in the form of second mortgage loans and also other types of loans.3%.1% 1.6% 21. The demand for mortgages remained comparably high during 2008. Tenant owned apartments are traded on the open market. Housing demand in 2008 remained at relatively high levels due to the favourable dynamics in young household formation and immigrants entering the market. However. increased on a year-on-year basis. Though from October onwards monetary policy turned expansionary.8% 49.0% in 2008. Due to the international financial crisis. The repo rate peaked in September at 4. Eurostat. Swedish Banking Association Macro-economic overview Real GDP fell by 0. Statistics Sweden Notes: Please note that.4. but a negative fourth quarter at .3% 52.75% and was then lowered to 2. the first three quarters saw a comparably high inflation. € 000s Total value of residential loans. A new mortgage bond which came into effect on July 1. The unemployment rate remained relatively unchanged at 6. please also note that the 2008 value of outstanding residential lending expressed in Euros was largely affected by the devaluation of the Swedish Krona (SEK) against the Euro during the year.087. but also due to a high inward migration. The Swedish Central Bank raised its central interest rate several times in 2008. The value of outstanding mortgage covered bonds at the end of 2008 was 126 billion Euros. Moreover.8% one year earlier.8% -0.9% 3. Residential construction costs increased by 5.2% compared to 6. GDP growth was positive during the first three quarters in 2008.500 units in 2007. the deposit guarantee was increased to SEK 500. Housing and mortgage markets The number of housing starts decreased by around 20.5% 21.3% 5.6% 63.000 units in 2008 againts 28.0% 3. Variable interest rate on mortgages reached 3.2% 2.0% 57. Although 2008 values cannot be compared to earlier figures – due to a change in the statistical source of mortgage lending data – it is estimated that the total value of outstanding loans from mortgage institutions (expressed in SEK) increased by 9. in 2008 (33. EU27.0% by the end of December 2008. producing a 8. Price increases on tenant owned apartments and single family homes slowed down during 2008 and prices even fell slightly during the fourth quarter. due to changes in the official sources for statistics on mortgage lending in Sweden.7% 50.68 199.8% 48.8% 12. between 3-4%. providing the possibility to obtain a state capital injection. the underlying assets of which consist of mortgage loans and loans to central. In November and December the inflation rate was lower.71 190. Sweden.100 units in 2007). Sweden’s recorded inflation for 2008 was 3. There were few vacancies among rented apartments and many municipalities reported housing shortages. The majority of household loans were taken out to finance house purchases and more than 85% of the household loan stock had property as collateral (mortgage loans).055 2. By the end of 2008. Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data. Fixed interest rate between 1 and 5 years decreased to 4.000 (approximately 50.1% on the previous year.3%). 2008 2007 0.1% a year earlier. The resident of a tenant-owned apartment is a member of the housing association according to his/her owning share and has the apartment at his/her disposal. all of the former mortgage bonds had been converted into covered bonds.6% 7.2% at the end of 2008 compared to 5. regional or local governments located within the EEA. According to data from the mortgage institutions. In 2008.2% Source: EMF.5% 6.6% at the end of 2008 compared to 4. non-performing loans indicators in 2008 showed that the number of defaults and share of doubtful loans are still at historical lows. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Sweden. In actual fact. It was also reported that during 2008 banks and mortgage institutions had adopted more restrictive Loan-to-Value ratios and had tightened their lending criteria and granted fewer interest-only loans than in previous years.
However. and all current government measures of support remain closed to specialist (non deposit-taking) lenders. In the early part of the year this drop-off was primarily supplydriven. following the bank rate cuts throughout the year.5% or more of the mortgage balance. To date. in the face of falling house prices and the ongoing credit crisis. 54% up on 2007 and the highest number in over a decade. peaking at 5. consumer confidence in the housing market deteriorated leading to reduced demand for mortgages.6% of all mortgages. but the more timely indicators (those from Nationwide and Halifax. with others finding that. In January the government also introduced the asset protection scheme (APS) to insure banks against extreme losses on their assets of uncertain value. Council of Mortgage Lenders Macroeconomic Overview The UK has not been immune to the global financial crisis and associated economic implications.3% in December 2008. The number of mortgage deals available at higher LTVs – 90% and above – has fallen dramatically over the course of the year. But with its greater reliance on wholesale markets. supported by large numbers of borrowers coming off fixed rate deals which were taken out at comparatively low interest rates two and three years previously. Funding With the private securitisation market remaining closed.9% on an annual basis. from 5. As a result. because this relatively high inflation was largely the result of the spike in energy prices it was temporary in nature. to just 0. remortgaging activity proved relatively resilient for most of the year. including AAA rated mortgage backed securities. most notably on LTVs. from 5. Under the APF the Bank is authorized to buy high quality private sector assets. confirming an expected period of recession. at least until funding lines return. The DCLG Index (released by Department of Communities and Local Government) fell by 0. Since then rates have fallen further. only those with substantial deposits are able to enter the market. And those still taking on material volumes of new lending tightened lending criteria. The ongoing funding crisis has reduced the ability to consolidate and manage debt. for the first time since the early 1990s. Inflation also rose in 2008. In January 2009 the UK government announced that it would be consulting on the details for an asset backed securities (ABS) guarantee scheme. House prices fell in 2008. buy-to-let has since been disproportionately affected by the credit crisis. and this is forecast to rise to 3 million by the end of 2009. funding for mortgage lending was severely restricted.000 (equal to 35.EU27 country reports United Kingdom By James Tatch. This equates to around 1. Affordability indicators – typical Loan-to-Value (LTV) and income multiples – fell significantly throughout 2008. gross mortgage lending dropped sharply in 2008. Alongside the economic contraction unemployment also rose. meeting lenders’ wholesale funding requirements and freeing up credit to consumers and businesses. However. A large number of lenders either significantly cut back or ceased accepting new business entirely. remaining on the reversion rate was in fact the most attractive option. At the end of 2008 there were around 2 million unemployed. With the private securitisation market remaining closed for business. to directly stimulate the securitisation market. buy-to-let gross lending had shrunk by two thirds. particularly with respect to maximum LTVs. By Q3 2008 remortgaging accounted for fully one half of total gross lending.000 mortgage properties were repossessed in 2008. double the amount needed at the beginning of the year. 40. Even with rapidly falling house prices the typical first-time buyer had to put down almost £30. But rather than an easing of borrower affordability this reflected a tightening of lending criteria. but this has since has dwindled away to negligible levels while banks and building societies have also experienced reduced appetite to lend. it is inevitable that both arrears and possessions will rise further. until January 2009. The growth in arrears and possessions reflects both rising unemployment and a high level of overall indebtedness amongst consumers (across both secured and unsecured lending). The precise extent of house price falls varies according to the measure used. both based on mortgage approvals data) estimate the annual rate of decline had fallen to nearly 20% by December 2008. The Treasury then introduced the credit guarantee scheme (CGS) whereby lenders could issue bonds with a government guarantee attached. and the Asset Purchase Facility (APF).2% at the start of the year to 6. and with it house purchase transaction numbers.2% in September. later in the year remortgaging dropped sharply as many potential borrowers could not meet tighter lending criteria. down 29% to £253 billion (316 billion Euros). Buy-to-let lending held up relatively well in initial months of 2008. Having fallen in the latter part of 2007. where banks and building societies could swap illiquid assets.5% in January to just 2% in December – a historic low. The scheme was finally announced in the budget and will allow banks and building societies to issue residential mortgage backed securities (RMBS) with a maximum term of either 3 or 5 years with either a credit guarantee or a liquidity guarantee from government. But as the crisis continued and spread to the wider economy. meaning that struggling households have fewer coping strategies. the Bank extended its special liquidity scheme (SLS). The Bank has also embarked on a programme of quantitative easing to increase the level of wholesale deposits in the banking system to offset the deleveraging process which has seen financial firms under pressure to shrink their balance sheets. The UK economy shrank for three successive quarters from Q2 2008 onwards.000 mortgages in arrears acccounted for 2. The rate of decline accelerated throughout the year. By Q4 2008. for UK Treasury Bills. The guarantees will apply only to AAA-rated tranches and government will have recourse to the sponsoring lender as well as the mortgage pool. This allowed the Bank freedom to respond to the ongoing financial crisis and its spread to the wider UK economy. Whilst confidence in the housing market fell away.5%. In this environment.714 Euros) deposit money in December 2008. 48 | 2008 EMF HYPOSTAT . lending remains severely constrained. At the end of 2007 about 180. Prior to the credit crisis specialist lenders accounted for a significant share of new mortgage lending. a 43% rise on 2007. including asset-backed securities but the scheme has to date been aimed exclusively at the corporate debt market. it then rose steadily through Q3 2008 to well above the target range of 1 to 3%. and those that remain are relatively more expensive. as well as injecting capital to key banks. the UK government and the Bank of England have introduced a range of measures aimed at stabilizing the financial system. In the wake of the collapse of Lehman Brothers on 15 September. with many lenders exiting this market entirely. Housing and mortgage markets Having reached a record high of £363 billion (533 billion Euros) in 2007. by lowering interest rates progressively throughout 2008.
906 10. 2007 3. € 000s Total value of residential loans.8% 4.6% 59.76 1.3% 2. 2008 0.5% 23. Communities and Local Government 2008 EMF HYPOSTAT | 49 .5% 21.7% 66.9% 5.84 1.0% 3.7% Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending 0. ECB.8% 12.8% 7.8% 12.0% 86.24 6.0% 80. Council of Mortgage Lenders.3% 59.2% UK.3% 28.9% 5.895 -0.8% 49.7% 5. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita.3% 5.087. Bank of England.928 0.0% 5.458.EU27 country reports EU27. Eurostat.9% UK.6% 3. UK= 2008 Sources: EMF.745.
4 billion Euros on year end exchange rate). The total number of residential units in Iceland was 129.2 Euro/ISK at end of 2007 compared to 169. Though final annual figures are not available yet. The highest amount granted for a residential mortgage loan from the Housing Financing Fund in 2008 was 20 million ISK (139.6% in 2009. In 2003 only one sixth of residential mortgages issued by the Housing Financing Fund had a maturity of 40 years. while the majority of newly issued mortgages had a maturity of 40 years. The state-owned Housing Financing Fund remained in the market. House prices also fell dramatically in real terms.0% LTV of the property market price. The Central Bank was thus forced to keep its central interest rate high so as to secure foreign depositors against a high risk of depreciation of the Icelandic krona. Housing prices reached their peak in January 2008.6% in the previous year and 4. but inflation-adjusted prices decreased by 17.6% in nominal terms). overdrafts and other consumer loans.708 Euros. Unemployment jumped in the last quarter of 2008 from 1.0% in the fourth quarter of 2008. due to prepayments from saving accounts to mortgages in the fourth quarter of 2008. The estimated current account deficit reached a peak of 42. Since the beginning of the housing boom. but dropped to 36. but no change was recorded as regards the maximum maturity range. Furthermore. the total increase in house prices in the capital region in real terms was 21. The slower economic growth was due to a reversal in developments in foreign trade. which was the highest increase recorded over the last 19 years. outstanding household debt amounted to 129% of GDP in the third quarter of 2008. The real mortgage rate (for index-linked mortgages) used by the Icelandic Housing Financing Fund was at 5. but the inflation fueled the indexedlinked mortgages that amount to 91% of all mortgages in Iceland. while the long-term average is 6.4% on average. increasing in the third quarter.1 billion ISK (3.000 people. The Central Bank’s rationale for such high interest-rates policy was to try to keep the exchange rate stable especially in consideration of carry trade investors who had been speculating on the interest rate difference between Iceland and low-interest currency regions. with severe consequences for the economy as a whole.274 Euros in 2008 and is expected to drop even further in 2009 (at the current exchange rate). it is expected to remain at similar levels on average in 2009. In 2008.8% percent at the beginning of the year. Mortgage debt amounted to around 85.75% without penalty payment in the beginning of 2008. when the Icelandic banks entered the mortgage securities market in August 2004 until the end of December 2008. foreign currency-indexed mortgages have heavily increased the debt burden of households and companies. The remaining 9% are in foreign denominated mortgages. Completed new housing units in 2008 were 2. 50 | 2008 EMF HYPOSTAT .144 at end of 2007 to 345.366 at the end of 2008. slightly below the record level reached in 2007. a historical peak in a country with a total population of less than 320.0% from the third quarter of 2007 to the third quarter of 2008.0% of the market value with a cap of 100% of the insurance value of the property calculated by the Icelandic Property Registry.3% in 2008. Between late September and early October the stock market crashed. although its lending operations decreased in the beginning of 2008.0%. Moreover. These restrictions were meant to be temporary. This figure includes mortgages. households lost considerable sums of money in market funds. which virtually resulted in the creation of two foreign exchange (FX) markets for the krona – one on-shore (FX through the Central Bank) and the other off-shore. starting from a very high rate of 13. Inflation was 12. The housing market experienced an oversupply of new housing units: 3. but a total of 6. An increasingly large portion of households went into negative equity due to the high inflation caused by the fall of the ISK. Icelandic GDP grew by only 1.0% of total outstanding mortgages at end of 2008 and around 21% of the total household debt. It reached 25 years in 1989 and was extended to 40 years in 1996.40% at end of year. outstanding household debt was around 1.0% in November 2008. due to uncertainty in the market and lack of mortgage credit from banks. compared to 5. The policy rate of the Central Bank of Iceland reached 18. The OMX Iceland-15 index dropped from 6. The exchange rate with the Euro registered by the Central Bank of Iceland was at 91. Icelandic banks were more vulnerable to the global credit crunch and finally collapsed by the time Lehman Brothers went bankrupt. The number of transactions fell by nearly 65. The banks offered 80.5% in December 2008 on a year-on-year basis.5 at end of 2008.97 Euro/ISK at end of 2008. At the end of the third quarter of 2008.053 Euros). To sum up. Housing and mortgage markets The housing market came to a near stand-still in 2008 after a record performance in 2007. all these factors led to severe losses in households` wealth.9% in the fourth quarter of 2007 to 4. Similarly.3% in 2006. This resulted in 9 new flats per 1. The total household debt increased by 28.890 billion ISK (13.8. banks had serious problems in finding financial sources abroad due to high CDS (credit default swap) spreads and lower credit ratings. Reykjavik Economics EHF Macroeconomic overview In real terms. Unemployment is expected to reach 8.Non-EU country reports Iceland By Magnus Arni Skulason. Loan maturity generally increased. an unprecedented number in the history of Iceland. In the first quarter of 2009 the unemployment rate was 7. which is still between 5 and 40 years. which can be explained by a massive increase in the income account deficit of 577. due to demand from rental housing corporations. and the three major banks were taken over by the Icelandic Financial Supervisory Authority as the stock market lost 94.486 were in progress by the end of the year.1 billion Euros). which are expected to continue into 2009. but the overall number of mortgages handled by the banks went down by 88. Loan-to-Value (LTV) ratios remained substantially unchanged at 80.4% caused inflation to pick up (12. The total household debt has not increased. but have been tightened even further in 2009.4% as a yearly average) because of Iceland’s dependence on imported goods. 2008 was a year of meltdown for the Icelandic banking system.9%%.0% (71. and also loans denominated in other currencies were quite common in the commercial lending business. The fall of the Icelandic krona against the Euro by 86.0% from 2007 to 2008.0% of the total household debt. thereby causing a big loss both for pension funds and investors.2% of GDP in 2008. Loans in low-interest currency baskets such as Swiss Franc and Japanese Yen.212 housing starts were put in place. These loans have heavily increased the debt burden and increased arrears by households. residential house prices in the Reykjavik Capital Region decreased in nominal terms on the previous year by 3. and 5.000 inhabitants.1%. Foreign denominated mortgages also gained popularity among households and amounted to approximately 9. The average nominal GDP per capita in 2007 was 47. The fall of the Icelandic Banks forced the government to put in place restrictions on foreign exchange against the Icelandic krona.968.3% of its value.
0% 129.8% 80. offering them in exchange for Housing Bonds and Housing Authority Bonds. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Iceland .0% 12.087.0% – 85.710 14.8% 12. ECB.4% n/a 2.58 17. € 000s Total value of residential loans. the Fund has further strengthened the three series initially issued and in November of the same year.8% 1. 2008 2007 0. Eurostat. Iceland .6% 7.Non-EU country reports Funding At the end of June 2004 the Housing Financing Fund started to issue its HFF bond series (HFF24.2% Source: EMF.8% n/a 66. The HFF bonds. There was limited issuing of structured covered bonds and mortgage-backed securities. The commercial banks financed their mortgages through deposits.0% 121.24 6.3% 5.0% – 82.5% 21. which are issued by the Housing Financing Fund. Icelandic Ministry of Finance Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data. HFF14.0% n/a n/a -3. a fourth series was added to the HFF bond class.7% 3. and also by issuing equity.928 0.3% 5. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita.0% 80. bond issues in Icelandic krona and foreign currency.9% 5. HFF34 and HFF44). Statistics Iceland.0% 3. HFF bonds have a governmental guarantee. Due to the uncertain situation of the Icelandic economy.0% 56.8% 49. Iceland= 2008 2008 EMF HYPOSTAT | 51 .9% 5.3% 5. Since then. the rating for these bonds went down from AAA in 2007 to BBB (S&P) in November 2008. EU27. are the primary funding source for mortgage loans and for re-capitalisation of older capital loans.
the lowest level ever.0%.928 0. As a consequence of this increase in mortgage loans. As regards the institutions which provide mortgage loans to households. For 68. During 2008 this favourable development in employment reversed. The main long-term sources of funding in Norway are deposits and bonds.000 unemployed persons. A new lending scheme. Funding Since 2007. the level of household savings remained relatively high in Norway.3% 5.1% in nominal terms) compared to 2007.7% 2. the average debt for all Norwegian households amounted to around 93.0% of all existing loans in 2008 LTVs were below 80. mainly due to fall in demand for durable consumer goods. The increase in unemployment probably also played an important role in the rise of non-performing mortgages.7% 36. The Central Bank`s interest rate is currently at 1. The recession has especially hit some export – oriented industries.1% 7. the year 2008 seemed to be a turning-point. The combination of falling house prices and increasing building costs.2 million Euros) in 2008. will last up to five years.8% of net loans to customers in 2008 (0. Construction activity also continued to fall into the beginning of 2009.1% 7. The banks`total bonds outstanding amounted to around 30. severely affected housing construction activity.7% 55. 6 units per 1. but the fall in GDP growth is estimated to reach (-1. The Central Bank of Norway has reduced their key policy rate in several steps to stimulate economic activity. Growth in total employment was never as high as in 2007. The importance of deposits in funding for Norwegian banks has declined: in 1996. In 2008 housing investment amounted to almost 19. While net losses on loans and guarantees were practically non – existent in 2007.1% 3. Statistical Institute of Norway Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data. the NSHB has now increased its relative importance in financing the purchase of new dwellings. Norway experienced very moderate inflation (0. total losses amounted to approximately 3. It aims at helping low-income households deal with high housing expenses to obtain and/ or maintain a satisfactory housing standard. This legislation allows specialised mortgage credit institutions to raise funds by issuing covered bonds in order to lend to borrowers in the form of residential mortgages.1% 3. Housing and mortgage markets For years Norway experienced considerable growth in house prices and steady increases in housing investment. This governmental support can now be provided regardless of how the purchase of a dwelling is financed.mainly due to an increase in public employment. Such exchange agreements. more than 28. after a 3. Gradually.0%.Non-EU country reports Norway By Odd Kristiansen. large volumes of covered bonds have been issued in exchange for treasury bills in order to increase the lending potential of credit institutions. a government housing support scheme issued by the Norwegian State Housing Bank (NSHB) and the municipalities. 85. However. while around 60. However.743 -1.0%. However.4% in 2007). is now at 2.8% 12. The earlier rise in house prices from previous years led to significant growth in the mortgage loans portfolio. as the strength of the recession became more evident. Despite the drop in funding through deposits. based on a sample of approximately 50 commercial and savings banks in Norway.500 Euros in 2007. a new legislation paved the way to introduce covered bonds to Norway. due to both rapid growth in household wages and to a strong rise in energy prices. High prices in second-hand houses were the main incentive for home builders to start new building projects.24 6. According to figures from Statistics Norway.5% of the labour force was registered as unemployed in 2008 . the slowdown in these GDP components has been clearly offset by increased demand from the public sector and oil industry activity. Thus. 2008 2007 0.0% of mortgage lending volume was financed by deposits.3% 6. unemployment is expected to increase to 4.5% 66.26 171. according to which the Government sells Treasury bills to the credit institutions.0% 3. Source: Cicero Communication AS 52 | 2008 EMF HYPOSTAT . together with a decrease in the number of orders.total growth in outstanding mortgage lending was nevertheless above 20. Bank of Norway. Norwegian banks have now been more cautious in their lending practices.5% 0. monitored interest rates were markedly reduced and reductions in money market interest rates followed in turn.600 housing units – i. The household savings ratio.8% 2. while this ratio was only 6% in 1995. which was introduced in 2006 became very popular.e.0% of gross fixed capital formation.0% were covered by deposits in 2008.300 dwelling units – the highest level since 1982 – but the starts of new housing fell to 25. For 13% of Norwegian households. “mortgage framework loans”.8%) mainly due to low-price imports.000 inhabitants – were completed during 2008. compared to 23. Norway= 2001 Mortgage average within 60% LTV. Statistics from the Norwegian Financial Services Association (FNH) report that net non performing assets in commercial banks amoun45 EU27.0% of households took out loans where Loanto-Value (LTV) ratio exceeded 100%. According to the “Residential loan survey 2008” issued by the Financial Supervisory Authority of Norway. In the last two years. the share of mortgage loans out of total households’ debt still increased and reached 82. As a result of the financial crisis. Eurostat. the borrower is to a larger extent free to decide when the loan will be repaid. building costs increased on 2007 by around 6. due to recession.3 billion Euros in 2008 over the previous year. Norway.35 173. With this scheme. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Norway. Due to the fact that many housing starts had taken place in the previous years. At the same time interest rate levels increased during most of 2008.on average 2.3% 32. defaults and losses increased.1% on yearly average).7% 76.4% 76. ECB. While house prices have increased every year since 1993 – with a total growth in prices three times as high as the increase in building costs – this trend has come to a halt in 2008.5% 21. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita.954 12.0%.5% 3.6% in 2010. The number of housing starts in 2006 reached more than 33.2 billion Euros.800 units in 2008.7 %) in 2009. In this regard. while in 2007 they were 28.2% Source: EMF. 25%. Household consumption also declined during 2008. Despite a decline in debt burden.150 millions NOK (383.5% (they fell by 1. inflation-adjusted house prices fell by 4.0% in 2007).8% 49.087. On average. the households` debt burden (defined as total debt/gross income ratio) also grew. but the increase in outstanding mortgage lending which was recorded in 2008 was not as high as in the two previous years.0% in 2006. the debt burden in 2007 was more than three times their income.4% 2.0% in 2008 (78. Norwegian State Housing Bank Macroeconomic overview The financial crisis and the recession in the world economy contributed to a moderate slowdown in the Norwegian economy in 2008 (real GDP increased by 2. and debt increased by around 3. In 2007. Due to the financial crisis. but remained still relatively low .0%. € 000s Total value of residential loans. it should be mentioned that the most important change in housing policy was the improvement in the Norwegian housing allowances scheme.1% increase in 2007).7% 13. but consumer prices increased noticeably in 2008 (3. Thus unemployment increased. ted to 0.7% 53. which measures the share of savings on total disposal income. and employment started declining towards the end of the year. corresponding to 125. The high savings rate imply that many households have an economic cushion which makes them more able to meet unexpected expenses. 13.1%.
Over recent years. as the Russian banks had no previous experience in these transactions. amounted to 1. amounted to 2. In spite of the crisis however.2 billion Euros).6 million dollars.087. ILO.e.4 billion USD (1. Funding The share of mortgages funded by securitised mortgage assets increased in Russia over recent years.6 billion RUB. Russian mortgage lending only started to develop significantly from 2002. representing a 4.Non-EU country reports Russia By Andrei Krysin. Moreover. 2007 became a record year for the absolute amount of non-residents’ investments in the registered capital of Russian banks.8 billion USD.9% increase on 2007. homebuyers can save up to 260. Russia. including 27 billion USD of direct investments and 1. In 2008. Lending criteria were tightened as well as in many other countries due to the economic crisis.4% 63. a lack of investors in the mortgage-backed bonds in Russia and rising problems on the funding side. although at lower volumes than the previous year. and the parent company was provided with 25 billion RUB (686. Outstanding mortgage debt amounted to 1.6 billion Euros).8% 5. was increased in 2008 by 60 billion RUB (1.5 billion RUB and the amount of mortgage debt in foreign currency (USD) was 228. these Russian mortgage projects can be defined as “pilot” ones. Russian Federal Central Bank Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data. This represented a 19.20 28.0 trillion RUB. they were 6 in 2007 and 5 in 2008 (so-called “domestic” securitisation).928 0. As of January 1.4 million Euros). € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Russia. an effective mortgage funding mechanism was successfully set up in Russia. € 000s Total value of residential loans.6 billion Euros).600 apartments for a total area of 63. In order to implement this program.000 RUB (3. the Russian economy received an inflow of 103. In 2008.1% 7.6% 8. i. the amount of foreign direct investments (FDI) in the Russian economy before the crisis. which was 28.3 billion RUB.8% 1. Over the last few years.4% 0. the Special Housing Mortgage Loans Restructuring Agency was created as a sister structure to the Agency for Housing Mortgage Lending. As of January 1st 2009.6% increase on 2006). the tax rebate was increased both for purchasing and for building a residential property. dwellings covering 61 million square metres were started.8% 2.2% compared to the previous year.000 RUB (7. The cumulated foreign capital in the Russian economy reached 264.570 Euros). Presently.7% n/a 11. 2008 2007 0. In 2008 there were also 13 issues of trans-border securities. while in the construction sector it amounted to 0.3% and 13.9 billion USD. Accordingly. during the second half of 2008 the government did much to support the Russian mortgage lending industry. Total new mortgage lending in 2008 amounted to 643 billion RUB (17. Mortgage lending expressed as a percentage of GDP of Russia in 2008 was 2. homebuyers also have the opportunity to repay their mortgage loans using the so-called “mother capital”.3 million Euros).11 17.1% 9. in 2008 the amount of foreign investment flow in the Russian economy decreased by 14. EU27. the securitisation market in Russia has shown great potential.8 million square meters were started.3 and 0. which represented a 103.9% growth on the level reached in January 2007. In 2006 and 2007 growth rates in residential mortgage lending have outpaced any forecast. ECB.5 and 1. The negative influence of the global financial crisis on the mortgage lending market in Russia resulted in liquidity problems in inter-bank lending.2% respectively.6 billion Euros (as of January 1st 2008 they amounted to 118. The registered capital of this newly-created institution amounted to 5 billion RUB (137.6 billion Euros) at the end of 2008. the construction sector has played a leading role in driving the economic growth of the country. which was equal to 3.1 billion USD respectively.6% on mortgages denominated in RUB and 10.0% 63. The remaining amount is credits. In 2006. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita.9 billion RUB.8% 49.813 n/a n/a n/a 6. Housing and mortgage markets During the recent financial and economic crisis the housing problem in Russia has worsened considerably.463 n/a n/a n/a 66.5% growth in comparison with the previous year (in 2007. while previously this amount could not exceed 130. IMF. The registered capital of the Agency for Housing Mortgage Lending. growth rates in the construction industry have increased considerably and reached 9. Moreover.1% and 5.24 6. 2008 this accounted for 183. 2008 marked the tenth anniversary of the introduction of the Federal Law on Mortgage Lending.3% 5. A special scheme was developed to help borrowers who found themselves in difficulty due to job loss or sharp decrease in income. which was a 20. However. EUROSTAT. which was established ten years ago in order to support the development of the mortgage lending market. mortgage loans in foreign currencies amounted to 94.6% respectively).5 billion Roubles (RUBs).9% denominated in foreign currency (USD). 2. Information on the value of mortgage lending is available through data provided by the Bank of Russia.138 Euros) on their income tax. Russia= 2003 2008 EMF HYPOSTAT | 53 .4%. while the interest rates on new mortgage loans kept decreasing. which the Government has set up in the framework of its demographic policy to support household formation.0% 3. The total amount of trans-border security transactions based on Russian mortgage assets.2% Source: EMF. Since the 1st of January 2009. 4 mortgage assets securitisation transactions were recorded. However.5% 21. due to the establishment of the mortgage loans` re-financing system and the opportunity to securitise mortgage assets by issuing mortgage-backed securities.8% 12. which gave banks the opportunity to increase their mortgage lending activity. since the 1st of January 2009. European Trust Bank Macroeconomic overview According to data provided by the Federal State Statistical Service (Rosstat) in 2006 and 2007.4 billion USD in portfolio ones. Compared to real GDP growth rates in 2006 and 2007 (8. 765. The global financial crisis which hit the world economy in the autumn of 2008. also had an impact on the Russian economy and mortgage market.9% 0. By the end of 2007 the average weighted interest rate constituted: 12. The total outstanding mortgage debt in local currency in 2008 amounted to 820. Indeed. For the Russian mortgage industry.813 million Euros.
2% Source: EMF. Importantly.0% 4. EU27.0% to 3.2% 0.000 for the 1st quarter of 2009) this indicates that fewer people are opting to register in the labour force and that. office and retail sector) will start to return to the level which will reach the equilibrium levels in the market. the share of residential mortgage loans has reached 45% of all household loans. there was a considerable decrease in demand for foreign investments in non-residential buildings and .in addition .1% 6. with a very limited number of developers. was followed by a large drop to 318 Euros in April of 2009.7% 14. What is more. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Serbia.26 1. Real GDP growth in 2008 was still positive.8% 12. Besides. Serbia= 2002 .over-investment in shopping centres. 1. Therefore. and the question now is whether there will be any positive growth rate in 2009. as the most likely consequence. with a yearly growth rate of 35%. but it was quickly heading into one. than the amount of outstanding residential mortgage loans.0% that was recorded in past years. but somewhat lower. House prices peaked to 20.5% 21.275 n/a 5. prices have not fallen by more than 10%. Official estimates were over-optimistic.4% 7. has put into question the actual size of GDP growth rate.Non-EU country reports Serbia By Goran Milicevic.920 n/a 8. 6. Despite all the negative developments in the economy. € 000s Total value of residential loans. though not around the rate of 6. EUROSTAT.2% if we use the average annual exchange rate). 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita. estimated between 3 and 5 billion Euros (that is between 1/10 and 1/6 of GDP).928 0.8% 49. while insurance of new loans at the National Corporation for Insurance of Mortgage Loans stagnated at 1. and only 22. in the first quarter of 2009 government-backed mortgage loans for young couples decreased significantly. They are. particularly in the real estate sector. but in the coming years it is expected to grow considerably. instead of foreclosure rates rising to double-digits. mortgage lenders have introduced stricter rules for lending (i. abandoning their previous practice of lending at a monthly rate reaching 50% of the household`s total monthly income). arrears and defaults on loan payments are still very low (2.7% 89.000 Euros/m² for top-class smaller dwelling units in the main streets of Belgrade (which represented a 100% growth in just two years. because mortgage loans were taken out mainly by the upper income segment (top 3%) of households. IMF. 2008 2007 0.24 6. the unemployment rate has reached the lowest level (14. Domestic savings have reached the level of 5 billion Euros. by the spring of 2009. in times of global recession it is unlikely that remittances will remain of the same level as in previous years. Since this is the first very big downturn in a relatively young real estate market in Serbia.8% if we take the exchange rate at the end of the year. University of Belgrade Macroeconomic overview The global recession was not a major factor influencing the domestic economic scene until October 2008. depending from the source.5 billion Euros. Faculty of Economics.7%) in more than a decade.3% 7. which is still greater 66.0% n/a 18. Yet.7% 11. Judging from the behaviour of the major players.e. major players in the private sector were pulling cash from their other operations in order to complete big real estate projects (mostly non residential) thus reducing the availability of funding. from around 5.8 billion Euros if we use the average exchange rate throughout the year).5% 89. a correction in house prices will not happen soon.0% 3. chances for any growth of GDP will most likely depend on the size of remittances. Yet official predictions for 2009 had to be halved (from 6. Serbia. the devaluation of the domestic currency by about 10% (from 86 to 95 dinars per Euro) in the last two months of 2008. For the time being. Statistical Office of Serbia 54 | 2008 EMF HYPOSTAT Notes: The unemployment rate data for Serbia in 2008 is preliminary Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data. ECB.4%. Since official figures are not showing larger increases in unemployment (just 3. Though. with reduced consumption. Outstanding residential mortgage loans are approaching 2 billion Euros (1. and in the spring of 2009 this share has exceeded 50%. further currency devaluation is not expected due to a considerable IMF injection to Serbian hard currency reserves. major real estate companies are hoping that this sudden downward trend in prices will not last for long and that they will be able to sell at the prices they expected when they made their investment.17 1. Yet. at 5.000 units in 2008.2% of all borrowers were in default in 2008).0% 5.3% 5. the country was not yet in recession. clearly providing evidence of a housing bubble). As a consequence. But the price of that injection was a considerable cut to the government budget. Officially. For instance.0% n/a Housing and mortgage markets Construction activity was in full upswing until the last quarter of 2008. which clearly indicates the monopolistic structure of the market.8% 5. so they had to be reduced downwards.00% to around 8.0%). it is very difficult to predict when prices in the real state sector (particularly commercial. Thus. In addition. employment in the grey and black sector of the economy is growing. most likely.9 billion Euros if we take the exchange rate at the end of the year. who would have paid more for their rents than for the monthly payment of the mortgage loan. reaching almost 6% (5. Besides. has reduced the demand for residential mortgage loans. and this may prolong the current crisis.00%. The rise of the average monthly wage from 350 to 370 euros during 2008.087.8% 0. there will more likely be a considerable if not dramatic slowdown in the mortgage lending growth rate until the recession period is over. considering rather poor prospects for a considerable rise in foreign direct investments. This indicates that not even the increase in mortgage interest rates. This means that for the first time on record outstanding residential mortgage loans have exceeded 5% of GDP. Since then it stabilised. It is worth remembering that only three years earlier this share was barely 10%. Investment plans continued as before. the housing mortgage lending has reached new records in 2008.000 Euros/m² for larger properties and 40. At the same time.
3% of GDP. Issuance of new mortgages started decreasing. of 20 to 30% of the house price. However.0% for loans in Euros. The market share of the top 10 mortgage lenders became somewhat stronger. In quantitative terms. year-on-year growth rate in mortgage lending in Ukraine (expressed in Euros) was 70%.8 billion Euros). started to fall. are as follows: In respect of the liquidity of the banks: .0% or more of the share capital of the bank. massive lay-offs. The demand for loans remained sustained but there was no ability from the supply side to meet this demand.0% on USD deposits. 16. the official exchange rate of UAH against USD increased by 52. most borrowers decided it would be cheaper to sell the pledged property and repay the loan than giving up a large part of the family income. and 15.9% up to UAH 733. borrowers were required to make downpayments. while at the end of 2007 it was 60.4% (from 1.the NBU has capped the assets of banks (and has limited operations with them) at the level existing on 13 October 2008.6% in 2007).1% of the mortgage market (78.5%. in foreign currencies they increased by 75. As of end of 2008.546 per 100 Euros.7% in 2008 up to UAH 357. deposits in domestic currency increased by 5.banks are required to limit their loans to borrowers. 2008 EMF HYPOSTAT | 55 . This happened because borrowers.) A significant role in this downturn of housing prices was played by a drop in the UAH exchange rate against foreign currencies and mass lay-offs.351 46 On 11 October 2008.0%. this increase was due to increasing demand. During the course of the year.0% of the collateral value. after the issuance of Resolution No. In respect of debit and credit transactions: . A deceleration in real GDP dynamics was caused by many factors. Moreover. as of Q3 2008 a slowdown in growth of house prices was observed.3%. it was 14.3% and as of end of December 2008. economic and political instability in Ukraine. the unemployment rate reached 6. Despite ongoing stagnation in the real estate sector and the crisis in the world financial markets. but not exceeding 90.7 billion Euros).8%. to 1. Many owners tried to sell their apartments as fast as possible.7% on mortgages denominated in Euros. Euros per one sq. .4% on USD mortgages. The share of mortgage loans on the total loan portfolio amounted to 14. Some lenders offer their clients mortgage loans with maturity up to 30 years. In 2008. global economic crisis. A typical maturity of a residential mortgage loans in Ukraine is 20 years. The key restrictions contained in Resolution No.0%. A rise in CPI was caused by an abrupt depreciation of UAH against foreign currencies.7%.3 billion Euros) . m. Most people took foreign currency loans to purchase properties and received wages in the national currency.4% and amounted to UAH 770.8% (including loans to individuals). who do not generate foreign currency revenues. since as of end of 2008 they accounted for 80. furthermore. Considerable increases in households’ income contributed to a general increase in loans granted to individuals and a consequent increase in banks’ external borrowings abroad . After October 13th. The exchange rate with the Euro increased by 46.4 billion Euros). Consumer prices inflation (CPI) was 22.9 billion (95.1% as of 1 January 2008). the actual average sale price of one square metre in intermediarysold apartments dropped by 31.0% multiple-room apartments: -14.5 billion ( 13. This was the same level recorded in the previous year.3% in 2008 (16. a bank is required to seek liquidity support from its shareholders that own 10. reflecting consumers` and borrowers` sentiments. Ukrainian banks almost stopped lending.3%. The total market share of the top 5 lenders at the end of 2008 was 61.by 75. the National Bank of Ukraine (the “NBU”) issued Resolution No. Ukrainian mortgage lending continued to grow at a high pace. tried to repay existing ones. amounted to UAH 1. house prices increased. their shareholders.3%). 319. to the amount of indebtedness under such loans existing as of 13 October 2008. The developments in domestic demand for mortgage loans mirrored most objectively what happened in the mortgage market.0% for loans denominated in USD. The average weighted interest rate on loans to individuals denominated in national currency in 2008 was 21.a client’s payment instructions may only be accepted if the payment amount does not exceed the balance of the account at the time when the instructions are given.0%. total mortgage banks’ portfolio reached UAH 107. In Q4 2008 prices continued to increase. 319 “On Additional Measures in Respect of Banking Activities” (“Resolution No. which imposes a number of restrictions intended to neutralize the impact of the external financial crisis and to stabilize the banking system of the Ukraine. but a deeper analysis on the causes and conditions for such growth suggests that this was probably the result of the appreciation of foreign currencies against the national currency so that real prices.with the total volume of loan deposits in 2008 increasing by 71.00 per USD 100.0% 2-room apartments:-15.0% on deposits in Euros. such instructions must be executed on the following business day (rather than on the day when the instructions are given). abrupt depreciation of UAH against foreign currencies. In 2008.997 Euros per one sq.”46 banks almost stopped lending to other industrial sectors. and clients. Net mortgage loans were UAH 50. As of 1 January 2009.6% on a yearly average (compared to 6. on average. The average weighted interest rate on deposits in national currency in 2008 was 15. 2008. In the first half of the year.3% 3-room apartments: -20.the NBU provides credit facilities to banks with a maturity of up to one year. Having faced a dramatic devaluation of the national currency and mass layoffs. all had a serious impact on Ukraine’s economy. and more than one third of total loans to individuals consisted of mortgage loans (39. and the early withdrawal of deposits is disallowed.0 % of the banks’ regulatory capital. Depending on the number of rooms.0% for the Ukraine (2. and 11.8 billion (0. By this time.9% in 2007). in the amount of up to 60. As of 1 January 2009. contraction of lending programmes and the ban on withdrawing deposits.085. m. in fact.3 billion (6. Total banking system deposits increased by 27. in 2008 prices in the second-hand housing market in Kiev recorded year-on-year growth rates as follows: 1-room apartments: -14. The residential mortgage market in 2008 remained one of the most dynamic and promising segments of the Ukrainian lending industry. 319 of 11 October 2008 from the National Bank of Ukraine on “Additional Measures Regarding Bank Activities. and . Political instability. average interest rates on UAH mortgages were 22.1%).Non-EU country reports Ukraine By Oleksiy Pylypets and Oleksandr Moiseienko. Over the year. while it was 13. being unable to take out new loans.before approaching the NBU. Housing and mortgage markets 2008 was a difficult year for the real estate market. with at least a 15. rising prices in world markets and the reduction of profits from foreign trade. which affect Ukrainian commercial banks. 319”). . or 11. Ukrainian National Mortgage Association Macroeconomic overview 2008 was the ninth year in a row of real GDP growth above 2.0% fixed rate interest level. and 16. In 2008.2%. growth in mortgage assets was negative. growing construction costs and the desire of sellers to sell premises at the highest prices possible.
EU27.5% 21.9% 16.000 Euros) at the coupon rate of 15.8% 49.6% 0.3% 0.3% 5. IMF.1% 7.0% 3. UNMA Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate average derived from EMF calculations based on latest available data.0 million (90.6% n/a 8. Yet in 2007 and 2008 two pilot issues of mortgage securities were launched in the secondary mortgage market. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita.Non-EU country reports Funding Deposits still remain the main source of mortgage financing. In February 2007.18 8. 56 | 2008 EMF HYPOSTAT . € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending Ukraine.6% 22.2% Source: EMF.8% 2. the first issue of mortgage covered bonds in the national currency was carried out by the Kreschatyk Bank for the total amount of UAH 70. 14. Eurostat.30 13.24 6. ECB.968 n/a 22.8% n/a 66.8% n/a 6.3% n/a 11. Ukraine.8% 12. 2008 2007 0. In the fall of 2008.087.7% 6.2% 7.928 0. the first deal was carried out to securitise Ukrainian residential mortgage loans originated by Privatbank for the total amount of USD 180 million (122 million Euros). Statistics Office of Ukraine.285 n/a. € 000s Total value of residential loans.5%.
the economy grew rapidly (GDP growth in excess of 4% annually). impacts on the US housing market over the last decade.190 billion Euros) to the peak value of 3. In 2001 and 2002 we see an increase from the normal annual foreclosure rate of about 1. University of California. US housing policy has always promoted homeownership. then rise peaking at just over 8% in 2000. at 77. buyers of subprime securitisations vanished. The last phase. One early sign of the real estate bubble bursting was in 2006 with a 10% drop in permits issued and housing starts. In 2007 the LTV for buyers of existing homes reached a record high of 79. rising from 65. and in many years dramatically from 1997 through 2006. Prime loans fared only slightly better. Fannie Mae and Freddie Mac. This brings the foreclosure rate to 3. the GSEs faced quantitative goals to increase the amount of their loans available for moderate–low-income individuals. of course. A second related factor was the innovation of subprime mortgage lending. they have declined to 6.7 million starts annually. with annual GDP growth falling to about 1% annually. This recession was relatively mild and short-lived: from 2003 to 2006 the economy was again growing steadily and the unemployment rate headed below 5%. the unemployment rate fell toward 4%. decrease the next year.4% and the unemployment rate reached 5. Existing home sales rose from 4 million in 1997 to over 7 million in 2005. however.8%. with a peak production of over 2 million housing starts in 2005.115 billion Euros). the US economy is now in the biggest recession since the Great Depression of the 1930s. For the full period.0% and are still falling. By 2008. Housing completions lag housing starts. Mortgage rates then steadily decline. Rates stabilize at this level through 2006. Unfortunately. the 2008 GSE volume remains well below its peak level of 2003. the percentage of subprime mortgages that were securitised expanded steadily. leaving the originators holding the loans. Existing home prices have been falling since 2007 and are still falling. and inflation was limited. and there was virtually no private issuance of mortgage-backed securities (MBS)—prime or subprime—in 2008. Loan-to-Value (LTV) ratios are one key measure of loan credit standards.1% to a 1.6% in 1997. However. show dramatically higher delinquency and foreclosure rates.9% whereas LTV for buyers of new homes only reaches the 2001 levels Funding Mortgage securitisation has been actively carried out for 25 years and subprime mortgage securitisation for more than a decade. subprime lending appeared to work remarkably well. At first.Non-EU country reports United States By Dwight Jaffeee and Sean Wilkoff. these funds were invested in US mortgage securities. lenders were unwilling and unable to continue making new loans. as rising home prices eliminated the possible defaults from these lower quality loans. and during the first quarter of 2009 the economy suffered sharply negative growth and unemployment rates well above 6%. In turn. During this decade. of course. The difference is the increase in 2008 is not as dramatic as foreclosures. Gross residential mortgage lending—mortgage originations—shows a general upward trend from the 1999 value of USD 1. dollar-denominated. even the dot-com bust in 2001-2002 had very little effect. For one thing. Berkeley Macroeconomic overview Over the last 10 years. Outstanding mortgage loans and the net change in these loans follow the pattern of gross originations and repayments and refinancing. In 2006 there is a slight upswing in LTV ratios. In the last decade the government introduced new incentives. the worst was still to come. traditional standards of affordability vanished. the US economy has experienced two significant macroeconomic cycles. By 2008.3%. This left the GSEs now operating under a government conservatorship as the primary purchaser and securitiser of US mortgages. Last seen in May 2009. Median house prices grew over 75% for existing homes and over 65% for new homes from 1997 to 2006 and 2007 respectively. due to waves of mortgage repayments and refinancing. Reflecting the effects of the subprime mortgage crisis. so the decline in completions did not occur until 2007. Through a variety of securitisation channels. By year-end 2008. From 1998 to 2000. 2008 EMF HYPOSTAT | 57 . Mortgage interest rates show a variable pattern over the period. which provided a channel for lending to lower quality borrowers than had previously existed. reaching 5. and the unemployment rate reaching 6%. the economy suffered the dot-com bust and recession. as the housing bubble continued through 2005 and 2006. Ultimately housing prices had to crash. we see the same pattern in delinquencies of 30 days or greater.7% in 1997 to the peak of over 69% in 2004. and perhaps stronger. referred to as the dot-com boom. GDP was still falling and unemployment rates were still rising. with an overflowing pipeline of loans in process. the housing market was in a deep recession. This force might well have reduced US mortgage interest rates by 50 to 100 basis points below the level they would have otherwise attained. and so they did beginning in 2007 and continuing to the present. Housing permit and housing completion activity occurred at correspondingly high values.4%. Housing and mortgage markets The US housing market had a sustained boom from 1997 through 2006 by almost all measures. Nevertheless. During 2001 and 2002. The US home ownership rate also rose steadily. then increase slightly the next 2 years to about 6. housing starts averaged over 1. For 2008.1 trillion USD (2. By 2008.1%. the effects of the real estate crises cause the foreclosure rates to triple over the 2006 rate. Data for the subclass of subprime mortgages would. the foreclosure rate slowly drops back to pre-dot-com bubble rates until 2007. Of course.0 trillion Euros) and are still declining. Not surprisingly. house prices became increasingly separated from economic fundamentals—that is. had at least as strong. there are over 11 trillion USD of outstanding US residential mortgages (8. reaching over 85% by 2005. The negative impact of the dot-com bubble on housing can be seen through the change in delinquencies and foreclosures. implemented through the governmentsponsored enterprises (GSEs). They begin at 7. In short. House prices also rose steadily. After 2002. Other forces.516 billion Euros) annual originations in 2005.5% rate. New home prices showed their first decline in 2008 and they too are still declining. before falling back by about 1% by 2008. once the high default rates on subprime mortgages became evident. mortgage originations in 2008 fell to 1. with housing starts and permits issued at less than half the 2005 level. GDP growth averaged only 0.8% in 2003.5 trillion USD (1. There are additional cycles in originations. One fundamental factor was the “savings glut” created in large part by the large and continuing trade surpluses of several Asian countries—most importantly China—combined with the high saving rates of these countries and their policy of investing the surpluses primarily in high quality. has been the subprime mortgage crisis. fixed-income securities.310 billion annual origination (1. LTV ratios trended down from 80% in 1998 to 75% in 2005. however.
69 8. US Bureau of Census.928 0. Bureau of Economic Analysis.3% n/a Notes: Typical mortgage rate Euro area refers to the APRC (Source: ECB) EU owner occupation rate for the EU27 average derived from EMF calculations based on latest available data. 2007 2.2% USA.115.8% 3. Federal Reserve 58 | 2008 EMF HYPOSTAT .087.2% USA.99 8.733.6% 6.1% 86.0% 0.8% 12.7% 66.Non-EU country reports EU27.7% 28.6% 2.3% 5. € million Annual % house price growth Typical mortgage rate (Euro area) Outstanding Covered Bonds as % of residential lending 0.24 6.8% 83.1% 4.4% 5.782 -8.8% 67.796 -0.8% 68.8% 49. US= 2008 Source: EMF.5% 21. € 000s Total value of residential loans.8% 6.8% 7.0% 3. ECB. 2008 0. 2008 GDP growth Unemployment rate Inflation % owner occupied Residential Mortgage loans as % GDP Residential Mortgage loans per capita. Eurostat.6% 26.
0% 16.6% 11.4% 5.1% 71.8% 1.8% 55.3% 76.8% 11.0% 94.1% 2004 20.7% 4.9% 25.8% 2000 n/a 27.7% 62.2% 121.3% 27.7% 36.5% 6.3% 1.8% 35.5% 38.9% 4.2% 52.0% 3.0% 37.7% 51.4% 0.3% 55.5% 1.2% 4.4% 6.6% 7.2% 53.8% 44.2% 10. Czech.2% 4.9% 8.8% 2.0% 86.2% 12.6% 32.0% 66.6% 22.0% n/a 31.9% 46.4% 39.6% 15.3% 19.9% 3.6% 41.3% 42.5% n/a n/a 0.1% 49.6% n/a n/a n/a 54.6% 86.1% 62.2% 35.4% 47.5% 59.5% 20.8% n/a 71.4% 5.7% 9.9% 12.2% 17.9% 33.1% 81.5% 36.0% 2.7% 46.0% 82.6% 11.8% 92.4% 1.4% 22. Dutch and Finnish series have been revised 2008 EMF HYPOSTAT | 59 .1% 41.1% 75.7% 13.8% 31.9% 37. National Central Banks. International Monetary Fund Notes: n/a: figures not available Denmark: The figure for the Danish market is an estimate.5% 37. 90% of the market.6% 69.0% 53.6% 27.3% 83.5% 17.5% 46.3% 7.4% 17. Eurostat.1% n/a n/a n/a 56.3% 6.2% 2.4% n/a n/a 0.7% 49.3% 55.3% n/a 60.0% 29.9% 61.0% 19. Bureau of Economic Analysis.2% 8.0% 68.1% 2003 17.4% 93.2% 47.9% 9.1% n/a n/a 0.1% 60.5% 6.6% 36.9% 47.3% 11.4% 70.0% 14.9% 73.2% 1.3% 59. Federal Reserve.7% 30.0% 7.0% 63.3% 56. Cypriot.5% 38.6% n/a 75.9% 0.5% n/a 3.0% 0.8% 4.2% 9.6% n/a n/a n/a 52.7% 95.2% 49.3% 11.7% 28.7% 83.2% 35.7% 34.2% 86.6% 33.0% 42.8% 0.8% 8.7% 0.6% n/a 0.8% 0.3% 0.3% 1.6% 4.7% 26.8% 51.6% 98.6% 6.2% 52.0% 60.8% 9.1% 88.0% 53.1% 0.1% 15.3% 29.3% 71.9% 23.1% 10.3% 39.9% 2.4% 57.6% 23.3% 45.9% 39.1% 56.6% 30.7% 30.5% 49.8% 94.9% 2.1% 2006 23.7% 29.0% 38.2% 9.7% 44.0% 51.4% 27.4% 54.4% 2001 13.6% 32.6% 88.8% 99.9% 36.7% 5.1% 3.7% 2.5% n/a n/a n/a n/a 23.0% 23.7% 1.6% 32.4% 20.4% 75.3% 1.2% 51. the data provided by the Danish Mortgage Association represent lending by mortgage banks only.1% 40.4% n/a 76.0% 13.6% 63.2% 21. which account for approx.1% 32.0% 49.8% 1.3% 26.5% 11.3% 29.2% 8.9% 36.9% n/a n/a 0.8% 33.0% 7.0% 52.8% 1.4% 30.0% 21.0% 0.1% 25. Residential mortgage debt to GDP Ratio % 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK EU27 Iceland Norway Russia Serbia Ukraine USA n/a 26.4% 42.0% 24.2% 53.3% 39.6% 50.1% 5.1% 18.7% 39.8% 129.0% 4.9% 4.8% n/a 0. European Central Bank.2% 9.1% 47.1% 19.0% 80.2% 14.7% 6.2% 9.6% 1.4% 32.9% 32.7% 7.3% 9.7% 17.3% 20.3% n/a 28.0% 52.9% 45.0% 8.3% 17.5% 0.9% 4.8% 1.1% 30.3% 11.3% 3.4% 61.5% 7.6% 11.7% 1999 n/a 27.1% 2.5% n/a n/a 2.8% 36.3% 51.7% 2008 25.6% 58.0% 61.7% 1.6% 0.0% 31.8% 1.1% 9.9% 48.4% 80.8% 11.2% 14.0% 60.8% n/a 4.2% 26.8% 9.6% 33.1% 30.1% 66.5% 3.0% 55.3% 4.0% 45.6% 31.9% 2.0% 53.6% 53.6% Source: European Mortgage Federation National Experts.9% n/a 3.2% 27.6% 0.1% 7.4% 8.1% 32.7% 53.2% 4.9% 58.Statistical tables 1.0% 34.1% 11.2% 2.3% n/a 26.6% 94.9% 6.5% 34.8% 95.3% 43.5% 35.3% n/a 74.8% 2007 23.4% 46.1% 44.6% 84.4% 5.5% 2002 16.8% 74.0% n/a 0.1% 2005 21.5% 50.7% 42.3% 51.6% 19.4% 8.7% 43.6% 80.9% 44.8% 11.9% 77.7% 53.3% 78.5% 47.
11 7.94 1.99 3.26 0.25 1.85 n/a n/a 0.13 n/a 4.21 21.11 0.39 13.41 0.04 0.43 0.01 0.24 19.69 Source: European Mortgage Federation National Experts.94 9.74 13.46 7.98 n/a 25.23 8.36 5.33 13.20 5. Cypriot.68 14.21 1.63 n/a 5.56 n/a 13.38 7.25 1.56 9.65 1.08 6.57 4.96 18.99 13.17 0.56 12.25 6.90 13.05 13.04 0.11 0.96 6.05 6.63 15.22 25.46 33.17 14.03 3.95 n/a n/a n/a 21.55 0.00 0.44 5.73 2007 7.69 6.49 2006 7.75 0.19 0.91 0.03 0.00 0.23 22.51 0.02 3.75 19.95 27.89 17.11 2.98 0.21 38.84 0.47 12.68 11.22 10.02 1. Federal Reserve.08 n/a n/a n/a n/a 1999 n/a 6.73 n/a 0.09 0.78 0.08 0.13 6.36 n/a 0. National Statistics Offices.46 13.57 0.15 26.08 16.00 25.06 14.92 n/a 0.04 12.00 2.09 0.07 2.05 5.23 6.44 29.23 7.02 0.24 28.70 13.05 17.37 19.45 0.26 0.79 0. the data provided by the Danish Mortgage Association represent lending by mortgage banks only.79 n/a 7.69 4. 90% of the market.01 0.17 14.03 1.60 27.87 1.19 17.16 n/a 4.98 13.36 31. 000s 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK EU27 Iceland Norway Russia Serbia Ukraine USA n/a 5.75 5.77 14.93 5. European Central Bank.59 0.79 40.87 0.28 n/a 5.64 20.89 2002 4.23 3.67 0.25 32.68 23.39 13.45 9.01 2.59 n/a n/a 0.13 7.13 2.97 2.52 10.77 n/a n/a 0.96 5.20 11.03 n/a 8.64 16.16 n/a n/a 0.01 0.01 0.72 13.98 3.78 0.04 27.09 28.83 7.12 3.59 14.11 0.20 0.91 8.05 14.82 11.07 0.44 0.47 17.71 4.12 35.46 0.18 28. National Central Banks.40 12. US Bureau of Census Notes: n/a: figures not available Denmark: The figure for the Danish market is an estimate.44 0.17 1.51 20.48 3.02 9.19 11.14 1.18 26.93 18.54 2000 n/a 6.09 29.07 4.99 0.38 33.86 0.93 1.71 28.58 32.18 6.24 11.10 14.19 0.43 0.42 14.18 1.60 0.01 0.94 0.08 4.62 2.86 6.47 n/a 0.88 12.83 1.10 0.70 6.02 1.24 14.65 23.36 1.33 0.53 0.06 0.90 3.32 2001 3.18 10.46 n/a 21.36 22.47 2.00 23.01 23.67 10.36 56.69 0.59 36.98 n/a n/a 0.01 0.77 1.04 0.56 0.66 32.67 10.06 16.35 0.77 2004 5.55 9.94 9.76 11.43 35.59 8.40 9.Statistical tables 2.94 34. Dutch and Finnish series have been revised 60 | 2008 EMF HYPOSTAT .09 4.22 0.48 2005 6.26 0.31 12.84 12.48 9.41 0.66 7.10 6.14 0.91 24.96 1. which account for approx.51 14.10 4. Residential Mortgage Debt per Capita.55 0.06 n/a n/a n/a n/a 3.07 19.20 1.91 8.03 4.36 12.89 21.30 26.99 2008 8.10 21.66 21.17 0.58 1.64 0.77 29.02 0.32 14.98 0.68 0.01 29.93 0.37 8.97 6.62 0.68 0.53 0.49 n/a 0.34 10.98 n/a n/a n/a 16.86 0.96 20. Eurostat.11 15.12 10.15 5.03 1.99 24.72 n/a 23.24 0.51 0.06 0.03 4.49 18.70 2.24 n/a 36.29 4.65 1.04 10.33 2003 4.04 0.01 24.82 5.96 14.34 0.12 6.20 0.43 0.85 n/a 23.17 0.54 40.90 6.23 0.21 n/a 5.28 n/a 0.21 1.09 0.48 32.52 0.04 0.51 0.88 24.92 25. Czech.13 5.18 1.
2% 9.2% n/a 6.8% n/a 0.1% n/a n/a n/a 0.8% n/a n/a n/a 2.5% 10.4% 27.0% 120.2% n/a n/a 3.5% n/a 0.0% 7.5% n/a 1.8% n/a 3.4% 0.6% n/a 1.8% 2.5% 0. 2008 EMF HYPOSTAT | 61 . Federal Reserve Notes: n/a: figures not available Covered bonds are debt instruments secured by a cover pool of mortgage loans (property as collateral) or public-sector debt to which investors have a preferential claim in the event of default. The covered bond data included in this table only applies to mortgage loan covered bonds.0% 1.0% 1.6% 11.4% n/a 3.4% n/a 2.6% n/a 28.1% 8.8% n/a n/a 0.3% n/a 0.3% n/a n/a n/a 4.7% 2. Eurostat.1% 0.5% 156.1% n/a n/a 2.4% 0.9% n/a n/a n/a n/a n/a n/a 2005 1.2% n/a 0.0% n/a n/a n/a 5.5% n/a n/a 0.7% n/a 6.5% n/a 1.8% n/a n/a n/a 25.1% 6.2% 4.Statistical tables 3.9% 10.5% n/a 5.0% 18.9% 136.5% n/a n/a n/a n/a n/a n/a 2006 1.6% n/a 5.3% 3.0% n/a n/a n/a n/a 2008 3.2% n/a 5.3% 11.3% n/a n/a n/a n/a n/a n/a 2004 n/a n/a n/a n/a 2.8% 0.3% n/a 7.4% n/a 1.4% n/a n/a 3.5% n/a n/a n/a 6.0% 0.4% n/a 0.4% n/a n/a n/a n/a 0.3% n/a 4.3% n/a 11.8% n/a 4.2% n/a 22.1% 6.2% 127.5% n/a n/a n/a 4.4% 137.7% n/a 6.4% 0.4% n/a 0.3% n/a 0.5% 0. Covered Bonds as % GDP 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK Iceland Norway Russia Serbia Ukraine USA n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 1999 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 2000 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 2001 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 2002 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 2003 1.8% 4.5% 141.8% 7.5% 0.3% n/a n/a 1.1% n/a n/a 0.8% 38.0% 2.1% 2.1% Source: European Covered Bond Council.4% 9.2% 1.7% n/a n/a n/a n/a n/a n/a 2007 1.0% 0.2% n/a 16.8% 12.3% n/a 0.4% 0.4% 0.1% n/a n/a 1.4% 8.2% 1.5% n/a 0.
0% 77.0% 59. International Union for Housing Finance.0% 57.2% 80.6% 92.0% 96.0% 63.4% 43.0% 82.0% 97. US Bureau of Census Notes: n/a: figures not available Luxembourg: households only Malta: households only The EU27 average has been weighted with the total dwelling stock 62 | 2008 EMF HYPOSTAT . Organisation for Economic Co-operation and Development. National Statistics Offices.0% 78.5% 68.0% 66.8% Source: European Mortgage Federation.Statistical tables 4.0% 59.0% 75. World Bank.0% 87.0% 97.8% 80-85.0% 88.5% 80.0% 58.0% n/a 67.0% 84.0% 57.0% 96.5% 52. United Nations Economic Commission for Europe.7% 54.8% 89.0% 75.0% 76. Owner Occupation rate.0% 74. % Latest data available Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK EU27 Iceland Norway Russia Serbia Ukraine USA 2003 2007 2002 2006 2007 2008 2008 2007 2007 2002 2008 2003 2008 2002 2007 2008 2008 2006 2008 2004 2007 2007 2008 2008 2008 2007 2008 / 2008 2001 2003 2002 n/a 2008 Owner occupation rate 57.0% 75.
209.000 106.000 4.584 2.978 2.500 2.038.953.376.023.549 1.000 122.700 129.000 n/a 1.000 29.826 32.119 1.165 2.406.176.000 29.798 314.000 29.682.771 2.494 805.000 26.000 26.704.900 115.060 5.768.616 n/a 6.000 7.697.049.925.000 5.418.925.762.329.557 1.299.013.683 1.000 39.912.030 791.000 n/a 4.Statistical tables 5.000 4.000 6.857.848 1.425.174.197.000 2000 3.937 n/a n/a 3.000 622.603.059 785.225 293.000 11.590.202 n/a 288.000 1.162 4.000 n/a 1.498.293 2.329.000 39.000 23.858.500 125.938 812.982.500 1.649.000 n/a 2.000 620.351.764.710.000 11.000 8.046 12.000 26.000 5.519.060 3.000 5.526 4.317.244.890 325.000 2003 n/a 4.282.754.058.913.270.954.885 633.526.860.452 650.000 7.902.000 1.000 5.000 37.352.290 1.153 830.900 2.000 24.362.365 32.696 4.530.946.111.100.000 5.715.000 39.000 38.247 5.749 19.804.877 12.000 1.000 11.101 n/a 133.000 4.021.524 4.430 8.000 4.987.413 4.527 4.711 2.958.950.000 7.000 26.819.404 n/a 2.631 798.050.000 7.022.194 n/a 1.489 n/a 358.052.000 4.478. US Bureau of Census Notes: n/a: figures not available Luxembourg: Households only Czech.495.834.295.986.393.295 1.000 n/a 4.900 110.930 1.554 341.700.281.000 8. European Central Bank.044.329 4.000 1.548 n/a n/a 18.917 n/a n/a n/a 127.000 4.000 2002 n/a 4.000 25.000 4.606 n/a n/a 8.000 n/a 2.316.000 38.849 n/a 6.624.000 30.000 2004 n/a 4.956 4.000 Source: European Mortgage Federation National Experts.132.976.200 2.435 3.000 621.905 n/a 126.918.029 122.652.733.934.465 n/a 6.000 25. Spanish and UK series has been revised 2008 EMF HYPOSTAT | 63 .000 796.745 4.200 2.000 4.516 19.987.000 26.986 n/a n/a n/a 130.000 107.820 4.000 26.129.913.100 2.711.384.238.554.000 1.000 28.012.000 n/a 6.581 12.000 877.000 n/a 2.000 8.400 2.376.000 1999 3.366.187.782.076.028.738 n/a 275.309.659.000 116.000 20.000 25.006.451.000 21.690.200 n/a 4.967.000 1.969 820.000 5.930 175.654 8.515.508 1.384 4.472 1.201.581.480.000 967.513.055.306.448.000 39.512.000 n/a 706.476.293.923.651.579 n/a n/a 133.405 12. Eurostat.885.462.000 25.572.729.763.000 2.000 19.134.942.816.000 115.000 4.000 1.327.000 5.000 1.500 n/a n/a 40.626.000 119.961.452.423 4.620.225 n/a n/a 18.979 2.000 7.100 2.029.420.000 n/a 986.000 4.904.541.100 19.696.231.485.548.000 2005 n/a 4.612 3.054.845.836.002.846 719.000 26.000 n/a 1.407 645.500 120.743.000 28.113.628.651.152.000 1.940.000 121.230.000 11.000 25.470.032 2.000 n/a 1.258.000 22.322 305.000 5.002 1.488 19.000 123.000 2008 n/a n/a 3.283.172.529.053.187.669.139.000 4.758.141.339 3.200 123.597 4.000 26.436.000 5.697.925.000 n/a 997.731.618.306.000 4.003.000 26.894 2.629 3.038 123.000 8.899.333 n/a n/a n/a 119.200 2.000 11.308.463.000 6.104.000 26.232 n/a 6.000 958.984.974 3.000 117.000 25.000 1.075.809.522.300 118.000 1.670.526.440 n/a n/a 18.000 621.918.921.294.551.506.150 n/a 6.800 1.908.000 1.000 38.000 n/a 1.575.291.000 2007 n/a 4. Slovenian. National Central Banks.592 n/a 3.600 2.026.596.000 30.930 n/a 2.726.872.000 119.884.329.000 2001 3.241 4.300.739 n/a 2.177 n/a 39. National Statistics Offices.000 623.681 2.000 24.025.000 n/a 712.133.000 37.000 23.271.557.544.969.882.767.095.700 119.635.861.000 1.787 1.767 n/a 6.366.592.753.000 21.792 4.449.327 135.000 626.644.965.324.107.070.000 112.787.401.000 121.096.061 2.574.200 n/a 4. Total dwelling stock 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK Iceland Norway Russia Serbia Ukraine USA 3.000 n/a 696.975 n/a n/a 8.516.229 19.990.000 n/a 1.462.649.960.145 2.380.451.000 2006 n/a 4.322 299.728.200 n/a 4.842 2.000 120.000 n/a 4.799.970 n/a 282.596.428.000 n/a n/a 1.858.424.383 n/a 6.081 n/a 4.821 1.404.700.400 1.297.000 25.000 629.786 n/a 125.640 638.
212 24.796 8.170 4.081 n/a 102.884 5.456 n/a 33.811 24.000 n/a n/a 16.000 41.400 90.800 2005 n/a 54.300 2006 n/a 57.849 n/a 27.751 29.000 760.000 360.700 114.000 n/a 37.796 19.616.817 20.625 303.602 317.321 7.564 n/a n/a 35.000 n/a n/a 12.193 n/a n/a 39.200 n/a n/a 44.996 75.975 n/a 1.707 n/a 97.876 309.536 n/a 9.700 2001 37.000 n/a n/a 11.000 n/a 31.243 n/a 32.852 765.500 368.592 9.000 n/a n/a 42.266 20.352 n/a n/a n/a 6.206 77.116 11.179 45.421 n/a n/a n/a n/a 85.607 5.709 296.000 543.134 n/a n/a 36.000 40.000 511.100 206.615 n/a n/a n/a n/a 80. National Statistics Offices.798 16.201 n/a n/a n/a 9.900 1.443 48.147 n/a 169.900 188.399 n/a 14.800 n/a 17.047 n/a n/a 28.340 n/a 32.900 17.000 227.027 18.000 41.100 125.643 22.309 309.000 n/a n/a 22.216 n/a 12.393 30.702 14.492 n/a n/a n/a 1.549 n/a 174.568.377 322.340 1.739 n/a 1.500 n/a n/a 22.223 n/a n/a n/a 1.100 192. Eurostat.470 3.482 22.500 192.847.730 n/a n/a n/a 1.795 19.900 2003 n/a 41.000 42.010 16.586 6.839 19.643 18.900 1999 46.620 n/a 30.606 23.038 n/a 49.269 n/a n/a n/a n/a n/a 77.374 n/a n/a 33.000 534.670 n/a n/a 32.983 20.650 12.377 16.573 n/a n/a n/a n/a 74.100 1.688 22.746 32.500 Source: European Mortgage Federation National Experts.380 363.342 n/a 34.602.747 32.446 31.600 n/a n/a 52.900 2000 39.597 285.000 523.125 n/a n/a 43.388 n/a n/a 43.000 n/a n/a 19.450 39.955.892 77.005 n/a 150. National Central Banks.962 n/a 66.600 230.876 27.000 n/a 3.836 n/a 174.854 14.279 n/a 171.531 14.100 216.691 n/a n/a n/a n/a 6.950 14.065 7. US Bureau of Census Note: n/a: figures not available UK series has been revised Slovenian series has been revised 64 | 2008 EMF HYPOSTAT .700 187.900 n/a n/a 40.037 29.379 n/a n/a n/a 11.044 22.620 n/a 177.000 691.000 n/a 2.640.400 n/a n/a 52.000 n/a 32.600 n/a n/a 25.590 317.139 28.400 n/a n/a 38.000 2008 n/a n/a n/a n/a 43.704.000 716.084 22.912 n/a 162.068. European Central Bank.800.852 n/a n/a n/a n/a 6.580 1.355.105 19.000 407.343 n/a 185.035 32.569 n/a n/a 40.000 623.016 19.360 22.954 n/a 31.740 n/a 34.154 302.000 n/a n/a 9.560 n/a 1.087 n/a n/a 32.282 n/a 24.871 91.409 n/a 137.976 28.168 7.857 6.391 n/a n/a n/a 10.470 n/a 31.478 435.191 n/a 8.000 615.381 33.700 2004 n/a 46.353 420.646 n/a n/a n/a 1.789 n/a 1.170 2.730 4.496 27. Housing Starts 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK Iceland Norway Russia Serbia Ukraine USA 48.Statistical tables 6.600 n/a n/a 905.034 n/a n/a n/a n/a 83.272 n/a 28.263 n/a 10.900 n/a n/a 42.900 2007 n/a 52.128 6.740 2.400 227.117 n/a 87.128 n/a 82.600 190.740 2.686 n/a 143.275 410.700 2002 36.406 n/a 1.
900 n/a n/a 67.267 11.800 107.700 Source: European Mortgage Federation National Experts.882 165.595 50.075 51.000 1.299 16.979.105 102.913 76.400 2007 n/a n/a 18.059 27.190 28.030 1.820 2.386 n/a 6.500 181.310 3.641 24.678.063 4.119.159 78.419 30.738 19. Housing Completions 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK Iceland Norway Russia Serbia Ukraine USA 57.444 8.Statistical tables 7.000 1.583 29.474. US Bureau of Census Note: n/a: figures not available UK series has been revised 2008 EMF HYPOSTAT | 65 .900 2005 n/a n/a 12.543 68.871 62.599 22.059 16.382 115.060 59.380 19.900 2000 53.677 n/a n/a n/a 1.931 7.287 46.700 2004 n/a n/a 8.000 641.300 30.311 20.101 n/a 268.865 34.713 64.511 57.649 28.084 11. National Statistics Offices.348 n/a 10.213 7.000 1.364 3.496 65.160 2.258 18.800 2008 n/a n/a 20.414 17.601 n/a 31.520 n/a 8.286 n/a n/a 72.000 84.475 n/a 66.000 426.388 71.718 n/a 20.562 2.416 32.183 18.864 93.812 n/a 899 4.904 27.465 882 29.177 11.914 36.680 2.372 63.291 18.957 n/a 3.147 n/a 10.127 12.927 1.427 20.376 39.500 223.489 n/a n/a 6.462 720 32.400 2006 n/a n/a 13.100 28.570.602 n/a 800 3.722 14.000 615.473 8.711 22.778 n/a 47.000 275.000 34.072 33.008 n/a 43.187 58.770 1.980 7.349 n/a 1.900 181.463 1.000 524.176 2.355 22.804 2.315 n/a n/a 80.184 10.000 1.041 10.351 4.659 n/a n/a 74.939 n/a 472.155 n/a 65.500 76.842 n/a 500.750 1.000 1.321 7.662 n/a 278.954 n/a 2.200 106.596 11.497 2.127 24.199 n/a 59.062 n/a 21.381 19.520 3.000 365.683 n/a 249.628 2.583 49.604.592 7.800 212.234 7.016 114.821 6.704 97.671 n/a 70.084 80.200 n/a 2.000 366.739 n/a 36.000 105.197 n/a 28.054 52.572 n/a 90.775 13.856 n/a 10.027 n/a 9.760 40.000 1.745 5.660 15.892 n/a n/a n/a 1.648.435 28.526 n/a 13.255 n/a 6.629 162.516 80.192 n/a 64.135 20.317 619 30.177 n/a 242.968 28.819 n/a 828 4.348 29.412 32.502.724 n/a 8.573.839 29.400 173.807 5.135 27.862 7.873 n/a 10.200 1999 59.592 n/a 326.510 3.000 210.193 133.000 321.419 n/a 5.105 30.864 n/a 41.887 26.000 1.000 190.853 n/a 19.400 12.785 25.000 1.067 n/a 78.695 n/a 794 4.000 176.700 2001 45.140 20.268 27.284 5.270 n/a 30.341 n/a 195.316 n/a 41.436 n/a 33.264 n/a 210.512 n/a 1.253 n/a 5.734 27.638 14.809 n/a 16.125 13.096 n/a 35.800 2002 41.285 3.500 n/a 36.000 496.327 23.650 87.207 16.323 42.342 n/a 73.013 32.983 5.073 35.514 785 28.625 82.083 25.068 33.505 30.785 2.479 23.319 9.106 3.238 27.700 182.931.400 2003 n/a n/a n/a 8.000 585.646 7.759 17.734 17.123 66.863 8.000 459.294 n/a n/a n/a 82.868 14.069 n/a n/a n/a 1.850 38.300 202.841.314 108.740 n/a 423.000 1.171 n/a 289.863 28.829 920 n/a 78.805 n/a 19.924 n/a 38.447 n/a n/a 6.
204 1.000 47.070.493 15.252 51.162 356.900 2007 n/a 53.605 22.800 268.000 535.548 51.700 n/a n/a n/a n/a n/a n/a 1.277 2.720 988 39.862 73.000 651.719 31.558 36.854 81.332 35.848 18.000 524.215 3.301 44.000 865.229 41.530 n/a n/a 3.442 16.155 3.100 2004 n/a 52.613 n/a 2.300 296.592 8.100 n/a n/a n/a n/a n/a n/a 892.000 47.327 30.592.580 44.468 26.831 79.700 n/a 1.800 437.092 28.279 20.045 340.100 17.949 n/a 2.974 35.155 16.459 27.800 182.201 106.762 19.411 10.116 9.180 105.287 n/a n/a n/a n/a 2.668 18.612.468 95.731 n/a 56.795 24.595 31.856 45.336 76.899 8.000 515.319 n/a n/a n/a n/a 2.491 n/a 4.300 n/a 1.923 385.607 4.747.276 22.300 455.111 12.956 5.447 35. National Statistics Offices.366 9.095 n/a 14.673 n/a 9.553 9.077 4.842 57.284 n/a 6.618 18.076 36.978 59.253 n/a 6.414 8.246 7.065 5.663.155.549 68.466 n/a n/a n/a n/a 1.321 8.000 687.273 84.800 Source: European Mortgage Federation National Experts.000 47.112 43.430 30.273 115.003 5.700 240.545 68.711 547.700 247.867 23.166 37.053 2.700 174.561 45.256 2.334 n/a 6.921 n/a 6.794 49.447 160.615 51.507 8.000 81.541 81.500 2000 41.200 291.980 n/a n/a 3.490 25.182 18.300 n/a n/a n/a n/a n/a n/a 1.796 6.135 511.281 43.543 3.948 28.648 48.081 83.096 45.000 636.692 9.032 51.499 45.372 n/a 61.429 47.857 n/a 429.918 236.128 4.300 2006 n/a 61.548 n/a 2.998 n/a 16.460 42.708 1.236 n/a 16.500 4.300 2001 40.100 477.419 35.046 460.781 1.398.500 n/a n/a n/a n/a n/a n/a 1.709 26.241 20.298 20.052.051 28.542 19.884 4.177 n/a n/a n/a n/a 1.889.757 47.800 43.939 358.838 2.389 15.846 4.100 2005 n/a 59. US Bureau of Census Note: n/a: figures not available 66 | 2008 EMF HYPOSTAT .194 n/a 14.000 499.032 n/a 7.411 2.863 35.336 n/a n/a n/a n/a 2.989 3.919 6.300 1999 45.673 78.925 32.120 82.427 28.400 n/a 2.249 8.235 350.300 n/a 2.004 87.098 47.896 47.800 n/a n/a n/a n/a n/a n/a 1.728 n/a 2.893 n/a 6.563 70.180 60.748 9.869 4.415 2.408 3.300 n/a 2.004 n/a 11.369 78.521 47.128 72.000 729.789 37.224 9.820 13.862 17.378 n/a 9.874 18.652 34.409 96.838.000 43.343 87.595 64.465 561.084 75.038 3.156 31.731 5.400 2008 n/a 52.189 4.969 44.332 25.200 2003 n/a 45. Building Permits 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK Iceland Norway Russia Serbia Ukraine USA 50.900 274.707 71.017 n/a 87.133 33.464 30.826 22.790 23.454 61.726 n/a 6.000 52.947 375.Statistical tables 8.707 76.000 264.482 4.459 45.739 2.584 66.198 223.065 20.000 n/a n/a n/a n/a n/a n/a 1.647 n/a 12.512 n/a 4.700 2002 42.777 33.149 n/a 6.481 67.183 39.577 23.800 350.035 17.934 11.397 16.000 49.204 n/a 8.774 n/a 7.123 80.364 6.961 24.168 5.586 6.
578 40.Statistical tables 9.157 51.490.000 n/a 97.428 2008 n/a 119.613 n/a 189.768 n/a 158.467 658. and so on) Ireland: estimate based on mortgage approvals Netherlands: includes commercial transactions Portugal: urban areas only .348.852 1999 n/a 114.261 2004 n/a 118.000 n/a 8.340 n/a n/a 4. Number of Transactions 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK Iceland Norway Russia Serbia Ukraine USA n/a 107. urban areas only Spain: New data published by the Ministry of Housing. new apartments excluded.815 n/a n/a n/a 6.243 2002 n/a 116.456.300 76.358 270.058 n/a 193.073 n/a n/a n/a 71.524 n/a 5.406 n/a 300.000 n/a 101.757 778.000 3.901 71.000 503.000 n/a n/a 955. National Central Banks.000 n/a n/a 68.058 110.280 81.000 492.000 n/a 455.392 n/a n/a 484.908 n/a 191.280 n/a 14. National Statistics Offices.574 59.000 n/a n/a 80.714 n/a n/a n/a 76.359 2006 n/a 120.306 n/a 5.856 688.529.871 64.736 742.051 2001 n/a 110.609 n/a n/a n/a 6.284 22.813 n/a n/a n/a 71.700 68.374 803.000 n/a 6.058 167.896 93.000 n/a n/a 78.000 329.953 30.000 326.124 110.700 1.301 n/a n/a n/a n/a 51.000 n/a 53.000 20.331 n/a n/a n/a 85.759 n/a 156.194 806.000 n/a n/a n/a n/a n/a 51.000 n/a 85.000 n/a n/a n/a n/a n/a 56.605 2003 n/a 119.464 57.290 28.225 34.791.000 498.600 1.941 n/a 276.000 7.000 500.390 56.622 25. The data includes the transactions of all type of dwellings (new.379 31.344.772 10.781 n/a n/a n/a 5.744 73.888 807.386 243.882 n/a n/a n/a 6.622 68.includes commercial transactions Sweden: one and two dwelling buildings only UK: England and Wales only.includes commercial transactions 2008 EMF HYPOSTAT | 67 .416 179.112 792.438 24.616 686.394 Source: European Mortgage Federation National Experts.203 n/a n/a 446.629 n/a 300.595 n/a n/a n/a 5.443.300 1.000 1. second-hand.142 n/a n/a n/a 67.517 8.000 441.000 n/a 151.147 23.867 84.577 n/a n/a n/a 70.982 28.000 n/a n/a 836.791 n/a 195.540 785.494 68.647 104.000 n/a 72.999 183.350 n/a 192.000 n/a n/a 901.305 804.056 n/a n/a n/a 70.600 1.000 n/a 91.051 n/a n/a n/a n/a 209.819 97.063 2000 n/a 108.585.200 1.225 n/a n/a 3.000 785.538 321.483 682.000 n/a 4.170 n/a 198.208 802.062 661.732 n/a n/a n/a n/a 50.467 161.529 2007 n/a 125.011 n/a 206.568 33.700 n/a 5.981 2005 n/a 118.000 9.200 1.905 44.200 1.292 n/a n/a n/a 848.777 n/a n/a n/a 79.000 n/a 144.737 262.600 n/a 4.979 93. subsided.126 63. US Bureau of Census Notes: n/a: figures not available Please note that EU27 annual aggregate values on are not fully comparable on a year-on-year basis with values of the previous years.000 n/a 109.431. due to the lack of some national data in each year Belgium: transactions on second hand dwellings only France: new apartments as principal and secondary residence or rental Hungary: new series from 2001.000 623.506 177.456 n/a n/a n/a 7.473 n/a 4.196 47.767 n/a 285.365 521.700 1.790 845.622 293.121 n/a 442.035 313.136 753.000 n/a 7.587 n/a n/a 3.000 567.001 n/a 182.734 n/a 204.000 n/a 82.900 1.647 n/a 4.939 804.775 n/a n/a n/a 7.177 n/a 202.900 564.510 166.935 n/a n/a n/a 70.000 n/a n/a n/a n/a n/a 48.401 n/a 281.617 n/a n/a 4.973 n/a n/a n/a 67.005 69.000 n/a 136.469.566 35.572 639.044 535.925 77.105 n/a n/a n/a n/a 54.391 n/a n/a n/a 6.350 68.831 53.923 n/a n/a n/a 53.000 483.925 576.094 n/a 12.036 90.186 58.466 9.495 833.
6% 2002 -0.3% 36.2% 20.0% 5.5% n/a 5.8% n/a n/a n/a 8.5% 5.7% 5.8% n/a n/a n/a 5.8% 30.0% 17.3% 3.4% 9.2% n/a n/a n/a 3.9% 7.1% 4.2% 35.6% 11.7% 10.2% 11.5% n/a 8.1% 13.0% 48.9% 16.3% 7.2% 6.7% 8.0% 14.3% n/a n/a 1.5% 4.2% 14.3% 17.9% 12.4% 10.4% 6.4% 1999 n/a 6.5% n/a n/a n/a 5.9% 0.2% n/a 2.9% 9.7% -0.6% n/a 10.9% 0.4% n/a 5.4% 2.0% n/a n/a n/a 6.9% 8.4% 21.9% n/a n/a 10.0% n/a 5.2% 2.8% n/a n/a 3.3% n/a 8.7% n/a n/a n/a 15.7% 4.2% 0.7% 24.9% n/a 13.5% 8.6% n/a n/a 6. data for 2008 is provisional Netherlands: all dwellings.3% 8.7% 10.5% -9.0% n/a 4.8% 28.8% 1.2% -4.0% 0.2% 19.2% 11.5% 2003 0.8% 8.6% 4.5% 47.8% n/a n/a n/a 10.1% 2001 3.3% n/a n/a n/a 17.8% -1.1% 2006 3.1% 16.0% 14.7% 13.6% 5.7% 6.4% 4.1% 12.9% 18.1% 7.9% 1.2% 5.3% 2.5% n/a n/a 7.3% 10.9% 20.9% 5.7% n/a n/a 6.8% 16.8% 2008 0.3% 7.6% n/a 4.0% 3.7% -6.6% Source: European Mortgage Federation National Experts.9% 7.8% 9.Statistical tables 10.5% 12.8% 2.9% 2000 n/a 3.8% 2004 -2.2% 3.7% 10.2% 12.7% 9.4% 8.5% n/a n/a 1.2% 11.2% 7.8% 5. OECD Notes: n/a: figures not available Belgium: averge prices of existing houses Bulgaria: average price for dwellings Germany: new series from 2003.7% 5.8% 11.6% 17.5% 2.0% 5. single-family houses Denmark: second hand dwellings only Finland: new series from 2000 Greece: urban areas only.6% 11.8% n/a n/a 12.3% 16.8% 4.1% 23.0% 42.4% 6.6% n/a 11.7% 2.2% 15.3% -3.4% n/a 13.4% 11.1% n/a n/a n/a -8.3% n/a n/a n/a 9.1% n/a n/a 23.9% -0.1% -28.1% 1.6% 25. series has been revised Hungary: new series from 2004.0% n/a 2.3% 8.0% n/a n/a 5.1% 11.1% n/a -6.4% 7.7% 2.1% 11.7% 9.4% 7.3% n/a n/a n/a 0.7% n/a n/a n/a 4.2% 8.7% n/a n/a n/a 7.1% n/a n/a 15.2% 8.1% 6. annual % change 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK EU27 Iceland Norway Russia Serbia Ukraine USA n/a 4.9% n/a n/a 14.6% 2007 3.2% 2.0% n/a 13.2% n/a n/a n/a 10.7% 42.4% 7.9% 9.8% 7.3% 5.9% 7.9% 8. US Bureau of Census.9% 1.6% n/a n/a n/a 7.6% n/a -0.9% n/a 14.1% n/a n/a 6.0% 10.2% n/a n/a 7.7% 5.9% -1.2% 17.5% 9.0% n/a n/a n/a 9.6% 28.0% -0.0% n/a -5.1% 11.8% 10.7% 6. House Prices (national).3% n/a n/a n/a 9.9% 2.5% 4.8% 2.9% 5.8% 3.7% 6.6% 10.6% n/a -1.4% 1.1% 17. urban areas only.8% 10.1% 6.0% n/a 9.9% n/a 10. National Statistics Offices.2% 4.5% 2.4% 13.3% 1.7% 17.1% n/a n/a n/a 0.0% 2005 4.2% n/a n/a 10.5% n/a 1.2% 15.5% -1.7% 10.3% 8. series has been revised Spain: second hand dwellings only France: second hand dwellings only Ireland: average price of all residential property approved for mortgage Italy: new residential house price index starting from 2005 Latvia: average residential house prices in Riga Sweden: one and two dwellings buildings UK: Department of Communities and Local Government Index (all dwellings) Iceland: Reykjavik capital region USA: all dwellings 68 | 2008 EMF HYPOSTAT .6% 0.1% n/a 8.6% 1.4% 7.9% 8.0% 8.6% n/a 0.0% 14.1% n/a 14.3% 7.8% -7.7% n/a n/a 13.5% 2.4% 3.6% 6.3% 7.7% 7.8% 6.0% 5.2% n/a 24.3% 9.6% -4.9% 10.5% n/a 12.0% 10.9% 11.0% 15.0% 0.9% n/a -0.2% -2.0% 1.4% 8.0% 8.6% 6.6% 15.3% n/a n/a n/a -0.
2% 1.3% 2.9% 2.8% n/a n/a n/a n/a 2007 3.0% 2.7% 2.1% 7.3% 5.0% -0.5% n/a 3.9% 2.6% n/a 2.1% 2.6% 5.4% 3.7% 3.7% 1.9% 0.7% n/a 4.0% n/a 16.1% n/a 13.6% 1.3% 3.6% n/a n/a n/a n/a 2001 1.3% n/a 16.8% 6.0% 6.6% n/a 10.1% n/a 4.6% 3.3% n/a 9.4% n/a n/a n/a n/a n/a 3.6% 2.8% n/a 3.4% 0.8% 3.2% n/a 3.9% 4.5% 3.9% 4.1% -0.1% n/a n/a 5.4% 2.2% 5.4% 18.9% 6.6% 2.8% 1.6% 3.9% 2.3% 2.1% 3.6% n/a n/a n/a 0.2% n/a n/a n/a n/a n/a n/a n/a 4.5% 3.8% n/a 21.7% 5.Statistical tables 11.8% 3.4% 2.3% 3.8% n/a n/a n/a n/a 2000 0.3% 2.2% 3.2% n/a n/a n/a n/a 1999 0.7% 3.0% 4.1% n/a 5.3% 2.1% n/a -1.3% 11.0% 2.6% 2.7% n/a 2.0% 3.3% 2.4% n/a n/a n/a n/a 2008 4.7% 14.2% n/a n/a n/a n/a n/a 0.7% 5.3% 3.5% 2.4% 3.3% n/a n/a n/a 3.8% n/a 5.6% 1.7% 6.8% -19.0% 3.3% n/a 9.7% n/a n/a n/a n/a 2005 1.0% 2.6% 4.8% n/a -3.6% 2.7% 0.0% 2.0% n/a 4.8% 3.9% 2.8% n/a 4.0% 2.3% 4.7% n/a 2.7% 2.3% 3.1% 5.0% 6.9% n/a n/a n/a n/a 2003 0.2% n/a 1.0% 2.5% 2.4% 6.2% 2.0% n/a 3.7% -5.1% n/a 4.5% 4.4% 1.7% 2. National Statistics Offices Note: n/a: figures not available Hungary: new series from 2000 Spain: new series from 2005 2008 EMF HYPOSTAT | 69 .9% 4.9% n/a n/a n/a n/a 7.1% -0.4% 2.8% 3.0% 5.9% 7.3% n/a n/a n/a n/a 2006 2.6% n/a 10. Building Prices.7% n/a -0.5% n/a 7.2% 10.0% 4.0% 2.3% 2.2% n/a 8.6% n/a n/a 4.5% n/a 4.2% 0.3% 5.2% n/a n/a n/a 6.0% 2.5% n/a 2.2% 7.0% 0.0% 2.6% 11.5% 0.6% n/a n/a n/a n/a n/a 7.6% 1.3% 3.1% 4.9% n/a n/a n/a n/a n/a 4.4% 6.0% 5.3% 0.9% 1.3% -1.1% n/a n/a n/a n/a n/a 1.8% 4.0% 6.1% 7.7% 3.9% 2.9% 9.7% 7.3% 3.1% 0.5% n/a 6.5% n/a 2.5% n/a n/a 6. annual % change 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK Iceland Norway Russia Serbia Ukraine USA 1.8% 2.2% n/a 0.9% n/a -2.0% 3.9% 2.6% 0.7% n/a n/a n/a n/a Source: European Mortgage Federation National Experts.6% n/a -3.9% 5.1% n/a 6.9% 0.7% n/a 4.9% 6.0% 2.3% 8.4% 0.9% 6.0% 5.8% -2.7% n/a n/a n/a n/a 2004 2.2% n/a 7.2% 9.0% n/a n/a n/a n/a n/a 3.9% 1.6% 4.4% n/a 12.0% 3.3% 0.4% 1.7% n/a 2.7% 5.5% 3.0% n/a n/a n/a n/a 2002 0.9% 5.8% 2.8% 3.9% 3.1% n/a 6.1% n/a 2.6% 3.9% n/a 3.8% 6.2% 3.4% 4.6% n/a 3.0% 6.2% 2.1% 3.0% 4.
500 1.553 135.582.416 n/a n/a n/a 6.147. National Statistics Offices.144 1.632 69.058 651.966 101.252 n/a n/a n/a n/a 128.928 n/a 171.333 71.795 91.458.916 133.612 148.126 3.988 54 584 n/a 117.815 101.220 5.341 1.834 6.900 1.999 11.168.834 57.652 1.362 173.286.491 1.385 2.014 222.073.125 432.842 305.395 674.896 880.737 114.417 750.101 921 2.956 571.869 77.078 89.536 3.236 466.940 2.531 136.014.831 220 185 6. National Central Banks.160.212 142.305 98.328 99.381 2004 48.954.236 14.370 n/a n/a 66 6.693 66.288 276.625 82.600 1.853 13.891 2001 29.871.937 6.676 190.618 65.139.712.647 878 410.122.037 48 138 4.968 4.868 1.726 2006 60.778 22.094 4.500 307 1.092 1.414 510 1.343 123.649 593 46.425 185 34.842 2003 39.782 Source: European Mortgage Federation National Experts.640 53.233 80.011 201 261.476 105. Finnish.463 1.039 139.Statistical tables 12.240 79 680 n/a 127.487 3. Dutch.556 110.367 700.847 2.252 3.384 62.615.675 2.300 1.600 1.521 211.517 286 39.052 7.759 97.291 2.339 5.025 1.770 548.494 337 285.998 74.532 56.460 120 870 1.029 206.040 7.509 2.934 77.452 1.838 n/a 1.868 6.742 69.664 5.449 3.576 5.967 n/a 89 487 7.105 1.228 2.800 1.318 47.097.646 79.006 1.026 34.873 350.119.622 2.920 13.809 15. € million 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK EU27 Iceland Norway Russia Serbia Ukraine USA n/a 60.157 768 327.155.733.746 82.991 3.349 2007 65.788 7.119.034 444.571 159.363 13.575 15.180 n/a n/a 52 154.979 950.230.803 173.412 103.400 1.275 8.642 71.900 205 1.148 n/a n/a n/a 4.485 8.198 3.921 124.906 6.700 15.012.280 4.519 480.700.500 58.946 503.370 324.529 2.381 8.259 8.056.045 5.661.346 137.212 1.222 2002 35.145 10.844 410 337 6.368 475.954 17.240 285.142 5.100 1.871 2005 53.593 506 26.488 6.216 88.383 5.877 17.808.800 1.623 10.016 176.262 6.775 5.020 133 146 5.055 194.796 2008 71.551 110.383 2.922 3.000 2000 n/a 69.273 1. Norwegian and Russian series have been revised 70 | 2008 EMF HYPOSTAT .415 263 312.365 n/a n/a 99 220.789 43 490 n/a 112.998 6.745 5.797 1.583 5. Swedish lending figures in 2008 cannot be directly compared with the earlier figures Cypriot.855 84.006 4.162 2.165 118.896 59.287 1.583 123.968 8.070 126.989 12.735 n/a n/a 65 188.682 156.210 9.743 28.272 723 32.968 50.125.438 147.631 145.726 4.102 4.270 10.196 800 384.278 73.935 2.460 n/a 23 380 6.360 263.581 1.764 57.546 117.233 n/a 1.300 38. Total Outstanding Residential Loans.670 8.420 9.105 6.990 305.895 6.670 646.292.341 26.895 2.700 1.301 8.157.696 3.235 387 43.530 35.300 1.710 173. European Central Bank.156.458 292 234.021 551.055 1.913 115.956 243.210 5.367 4.866 4. Federal Reserve Notes: n/a: figures not available Please note that due to changes in the official sources for statistics on mortgage lending in Sweden.566 3.582.162.588 45.434 199.140 6.186 101.859 650 4. Czech.087.914 11.786 8.732 1.973 7.129 n/a 4 134 7.750 577.373 n/a 308 n/a 116.813 1.037 n/a 218.025 385.078 1.345 1.245 1.183.828 154.652 n/a 87 4.377 n/a n/a n/a n/a 1999 n/a 65.019 215 37.981 954 51.326.115.830 21.379 9.542 311.745 42.265 4.357 760 669 7.450 8.061 64.285 8.135 647.228 589.899.225 3.118.844 n/a 20.501 16.745.960 8.414.830 1.
787 66.020.245 n/a 103 1.556 508 18.598 42.800 112.376 266 119.028 33.134 n/a 4.590 46.032 n/a n/a n/a n/a n/a 40.842 2003 n/a 18.104.22.1683 n/a 60.919 n/a n/a n/a n/a 585 2.682 n/a n/a n/a n/a n/a 1.457 63.339 27.000 121.316 n/a n/a 1.190. Gross Residential Loans.130 2001 n/a 9.854 n/a 245 n/a n/a 5.265 22.357.517 41.576 45.202 52.599 n/a 1.148 316.705 126.420 19.773.500 103.609 1.587 26.080 114.910 16.909 2000 n/a 9.966 n/a n/a 15.839 2005 n/a 25.996 n/a n/a n/a n/a n/a 91.172 4.166 1.446 n/a n/a 1.461.900 n/a 597 7.202 78.400 n/a 2.094 49.443 70.634 63 9.035 n/a 16.408 Source: European Mortgage Federation National Experts.134 n/a n/a 1.800 119.395 43.550 3.905 n/a 13.500 1.880 421.058 52.752 2.531 2.850 n/a 348 2.731 351.569 n/a 4.150 2004 n/a 17.651 n/a 78.810 n/a 205 n/a n/a 2.691 383.872 89.Statistical tables 13.386 n/a 87.290 257.825 n/a n/a 5.354.873 301 8.079 2007 n/a 22.527 23.931 146.688 n/a n/a 735 33.384 891.287 1.727 n/a n/a 2.369 n/a n/a n/a n/a 92 2.516.028 831.408 41.369 7.700 n/a n/a 23.200 15.000 149.036.289 507.162 n/a 48 1.486 691.704 n/a 56 1.644 n/a n/a 1.325 87 8.128 n/a n/a n/a 4.875 1.959 19.119 n/a n/a 139.173 n/a 211 2.365.657 n/a 1.049 85.296 429. Federal Reserve Note: n/a: figures not available Please note that due to changes in the official sources for statistics on mortgage lending in Sweden.199 2.828 120 7.506 174.897 n/a n/a 1.944 39.676 n/a 69.559 400.264 n/a n/a 1.648 n/a n/a 156.593 n/a n/a n/a n/a n/a 47.063.164 n/a n/a n/a n/a n/a 109.347 n/a n/a n/a 6.987 2.780 40.622 n/a n/a n/a 33.471 28.300 5.933 68.198 n/a n/a 2.918 n/a n/a n/a n/a 188 3.028 n/a n/a n/a n/a n/a 35.385 n/a n/a n/a n/a n/a 70.745 n/a 95.808 94.029 n/a 1.911 33. € million 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK EU27 Iceland Norway Russia Serbia Ukraine USA n/a 12.513 n/a n/a n/a 18.400 108.769 n/a n/a 672 83.832 n/a n/a n/a n/a n/a 1.622 n/a n/a n/a 29.131 n/a 1.906 n/a 72.328 n/a n/a 4.789 999.031 10.700 n/a n/a n/a 7.600 15.734 866 3.132 487.599 134.723 2008 n/a 21.000 n/a 4.111 2002 n/a 11.611 1.457 533.537 n/a n/a 17.500 109.129 2006 n/a 24.933 34.488 806 19.609 n/a n/a n/a n/a n/a 55.551 484.585 1.524 59.609 77.957 226 114.387 29. Swedish lending figures in 2008 cannot be directly compared with the earlier figures Czech and Dutch series have been revised 2008 EMF HYPOSTAT | 71 .244.308 n/a 81.664 44.669 122.837 2.797 n/a n/a 7.491.600 13.624 113. National Central Banks.434 26.444 2.544 n/a 594 3.467 196.864 n/a n/a 135.930 1.849 95.114 79.341 n/a n/a n/a 37.200 110.275 2.452 n/a n/a n/a n/a 493 3.825 53.319 43.137 28.075 n/a n/a n/a n/a n/a n/a 1999 n/a 17.519 176 8.600 8.858 36.
900 -7.723 n/a n/a n/a 659.299 15.663 159.197 n/a 3.426 526.787 32.333 11.677 2005 5.500 5.118 1.546 50.980 575 591 967 208 33.230 1.526 21.503 26.183 184 26.945 65.432 7.760 n/a 727 27.561 n/a 1.092 2.332 6.659 10.905 24.314 486.760 148.828 1.808 74.195 801 570 90.368 1.082 805 8.565 494 n/a 2.982 80 -18 1.954 8.736 541 4.192 n/a n/a 729 563 71.653 Source: European Mortgage Federation National Experts.526 101 3.852 1.008 6.883 n/a n/a n/a n/a 1999 n/a 5.488 86.021 218 1.404 284.855 3.036 n/a 66 141 869.742 66.478 11 89 n/a 5.311 5.281 1.357 1.757 16.568 n/a 73 n/a 8. National Central Banks Note: n/a: figures not available Please note that due to changes in the official sources for statistics on mortgage lending in Sweden.247 8.430 9.573 2.869 19.355 326.331 16.998 162.672 2008 38.542 206 3.737 10.389 414.243 n/a 625 4.332 32.076 370.382 674 n/a n/a n/a n/a 26.118 6.854 10.873 252.421 11.785 1.660 6.949 n/a 2.513 350 331 1. Hungarian.748 741 929 1.457 4.500 48.359 11.700 20.935 2006 6.636 2000 n/a 2.501 n/a n/a 375 95 50.309 2.337 574. Swedish lending figures in 2008 cannot be directly compared with the earlier figures Czech. Net Residential Loans.511 790 1.715 11.128 1.331 11.036 496 644 2.339 248 42.491 n/a 343 2.497 30 2.603 2007 4.071 n/a 2.Statistical tables 14.348 6.164 2.880 21.873 16.043 478.534 451 10.048 7. € million 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK EU27 Iceland Norway Russia Serbia Ukraine USA n/a 2.480 2.816 34.050 n/a 37 421 n/a 27.679 233 6.156 43 1.402 1.620 1.093 n/a 30.590 421 20.009 133.940 16.749 7 5.626 684 12.067 n/a 645 6.770 186.502 n/a 36.488 584 5.200 7.232 13.302 306 321 1.434 n/a n/a n/a 32 43.611 57.121 2.100 -9.100 19.701 n/a n/a n/a 426.186 872 1.171 1.075 n/a n/a n/a 5 33.097 146.733 17.754 12.573 1.720 41 189 n/a 8.975 125.661 257.750 20.500 60.946 8.927 37.274 2004 8.893 n/a 74.808 3.073 17.000 1.767 n/a 17.785 1.142 18.832 12.748 6.380 19.417 15 180 n/a 5.957 2001 n/a 443 24 99 n/a 7.497 45.034 158 35.573 n/a n/a n/a 107 41.209 271 46.858 7.667 2002 6.253 85 305 957 9.200 40.175 12.366 4.200 3.816 672 7.755 -32.181 48 2.218 2.482 71 2.380 544 5.151 30.612 295 n/a n/a n/a n/a 24.947 2003 3.942 1.738 11.718 17.911 902 1.360 14.166 956.854 361 4.172 2.004 4.274 1.811 88 43 663 424 41.448 n/a n/a n/a 496.703 1.013 196 146 490 144 46.793 1.725 1.024 16.712 546 5.955 2.036 40 50.867 1.600 5.550 23.700 7.002 10.384 48 39 421 n/a 35.597 n/a 4 71 836.390 260 4. Dutch and Portuguese series have been revised 72 | 2008 EMF HYPOSTAT .865 74.616 874.334 n/a 19 267 773.878 n/a 18.300 27.228 3.600 68.995 9.153 1.797 6.554 28.018 588 96.608 3.302 251.
755 Source: European Mortgage Federation National Experts.Statistical tables 15.424.500 n/a 989.745 203 n/a n/a n/a 13.015 n/a 536.653 34.257 80.801 7.673 n/a n/a n/a 1.732 15.092 131.058 1.712 n/a n/a n/a n/a 30.427 n/a n/a n/a n/a n/a 1.278 n/a n/a 258.608 n/a 4.354.679 262 n/a n/a 217.903 n/a 8.040 n/a 10.046 5.020 n/a n/a n/a n/a 13 1.549 n/a n/a n/a n/a n/a 1.645 1.204 1.821 n/a n/a n/a n/a n/a 1.864 9.032 n/a n/a 17.548 138.227 61.141 n/a n/a n/a n/a 154.728 n/a n/a n/a n/a n/a 73.758 n/a n/a n/a n/a n/a 64.401 415. Federal Reserve Note: n/a: figures not available Please note that due to changes in the official sources for statistics on mortgage lending in Sweden.236 35.444 2002 35.008 n/a 356.910 30.317 2.157 1.805 n/a n/a n/a n/a n/a 91.763 7.332 4.399 1.065 3.781 n/a 388.015 n/a 819.817.720 n/a n/a n/a 197.866 n/a n/a n/a n/a 12.371 n/a n/a n/a 1.294 3.101 779 n/a n/a n/a 23.527 5.068 4.792 104.030 n/a n/a n/a n/a 12.625 11.072 93.073 71.247 n/a 7.272.092 8.498 n/a n/a 260.436 n/a 946.569 4. National Central Banks.805 498 n/a n/a n/a 20.483 8.190 n/a 11.296 8.409 58.929 n/a n/a n/a 1.620 7.774 n/a 18.524 1.375 n/a 488.284 n/a n/a n/a n/a 167 1.314 n/a n/a n/a n/a 49 1.175 2007 n/a n/a n/a n/a 3.200 8.046 78.505 n/a 3.753.577 n/a n/a n/a 39.977 607 n/a n/a 232.625 117 n/a n/a 199.212 n/a n/a 400.727 27.454 n/a n/a 263.008 4.126 n/a n/a n/a 23.604 n/a n/a n/a n/a n/a 967.164 3.609 n/a 420.765 8.316 n/a 4. Swedish lending figures in 2008 cannot be directly compared with the earlier figures Czech series has been revised 2008 EMF HYPOSTAT | 73 .705 191 n/a n/a 207.892 409 n/a n/a 223.137 121.251 66.434 n/a 681.194 n/a 16.345 n/a n/a n/a 25.952 8. € million 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK EU27 Iceland Norway Russia Serbia Ukraine USA n/a n/a n/a n/a n/a 21.221 2004 31.772 7.935 2001 36.279 n/a n/a 258.729 3.739 n/a n/a 258.556.797 1.669 n/a n/a n/a 24.335.314 n/a 749.071 n/a n/a n/a n/a n/a n/a 1999 n/a n/a n/a n/a n/a 22.297 300 n/a n/a n/a 18.541 n/a n/a n/a n/a 7 1.298 n/a n/a n/a n/a 13.181 n/a 607.045 4.673 n/a 8.540 n/a 17.811 n/a 4.475 n/a n/a n/a 23.184 n/a n/a n/a 672 34.694 2006 n/a n/a n/a n/a 2.495 n/a n/a n/a n/a n/a 1.526 2003 35.454.013 n/a n/a n/a n/a 38 1.767.701 2.187 n/a n/a n/a n/a n/a 51.455 2000 n/a n/a n/a n/a n/a 29.432 3.839 2005 31.925 69.172 n/a 6.384 74.923 813 n/a n/a 257.145 n/a n/a 256.509 718 n/a n/a n/a n/a 115. Total Outstanding Non Residential Loans.680 2.440 5.644 2.876 n/a n/a 339.080 2008 n/a n/a n/a n/a 5.
Gross Non Residential Loans.527 n/a n/a 906 n/a n/a n/a n/a 23.320 n/a n/a 1. National Central Banks Note: n/a: figures not available Please note that due to changes in the official sources for statistics on mortgage lending in Sweden.312 17.205 1.270 n/a n/a n/a n/a n/a 28.737 n/a n/a n/a n/a n/a n/a n/a 1999 n/a n/a n/a n/a n/a 10.000 n/a n/a n/a 31. € million 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK Iceland Norway Russia Serbia Ukraine USA n/a n/a n/a n/a n/a 10.000 n/a n/a n/a 43.806 702 n/a n/a 25.821 n/a n/a 784 n/a n/a n/a n/a 15.562 105 n/a n/a n/a n/a n/a n/a 16.089 n/a n/a n/a n/a n/a 49 n/a 2004 n/a n/a n/a n/a 546 8.850 194 n/a n/a n/a n/a n/a n/a 23. Swedish lending figures in 2008 cannot be directly compared with the earlier figures 74 | 2008 EMF HYPOSTAT .509 n/a n/a 121.241 n/a n/a 779 n/a n/a n/a 1.627 256 n/a n/a 22.732 2.832 n/a n/a 823 n/a 42.700 n/a n/a n/a 42.893 n/a n/a 35.214 n/a n/a n/a n/a n/a n/a n/a 2001 n/a n/a n/a n/a n/a 9.Statistical tables 16.386 n/a n/a n/a 41.843 1.857 2.386 363 n/a n/a 22.100 n/a n/a n/a 26.563 412 n/a n/a 24.952 3.213 17.553 n/a n/a n/a n/a n/a 184 n/a 2006 n/a n/a n/a n/a 899 6.472 1.988 n/a n/a n/a n/a n/a 27.756 1.469 n/a n/a n/a n/a n/a 58 n/a 2005 n/a n/a n/a n/a 709 14.289 105 n/a n/a n/a n/a n/a n/a 22.972 n/a n/a n/a n/a n/a 44.044 n/a n/a 413 n/a 33.335 3.502 n/a n/a n/a n/a n/a n/a n/a 39.927 n/a n/a n/a n/a n/a 9 n/a 2002 n/a n/a n/a n/a 249 9.564 n/a n/a n/a n/a n/a 23.700 n/a n/a n/a 38.358 n/a n/a 638 n/a 36.444 n/a n/a 552 n/a 40.040 99.963 n/a n/a 828 n/a 49.603 n/a n/a 127.057 n/a n/a 56.564 n/a n/a 26.682 1.138 n/a n/a n/a n/a n/a 63.114 n/a n/a n/a n/a n/a n/a n/a Source: European Mortgage Federation National Experts.520 n/a n/a n/a 86.139 n/a n/a n/a n/a n/a n/a n/a 2008 n/a n/a n/a n/a 2.266 1.100 n/a n/a n/a 21.595 n/a n/a n/a n/a n/a n/a n/a 2007 n/a n/a n/a n/a 1.900 n/a n/a n/a 29.412 n/a n/a n/a n/a n/a n/a n/a 2000 n/a n/a n/a n/a n/a 4.312 n/a n/a 110.226 n/a n/a n/a n/a n/a 34.108 n/a 64.072 2.458 2.411 2.440 2.506 n/a n/a n/a n/a n/a n/a n/a n/a n/a 6.900 n/a n/a n/a 35.959 n/a n/a n/a n/a n/a 19 n/a 2003 n/a n/a n/a n/a 293 13.
662 3.742 103 n/a 842 7.300 322 n/a n/a n/a 3.389 2004 n/a n/a n/a n/a 332 2.087 2001 n/a n/a n/a n/a n/a 2.382 450 n/a n/a n/a n/a n/a n/a 116.410 n/a n/a n/a n/a n/a 7.627 336 n/a n/a n/a 77 n/a n/a n/a n/a n/a 7.556 349 n/a n/a n/a 332 860 n/a n/a n/a 8. Federal Reserve Note: n/a: figures not available Please note that due to changes in the official sources for statistics on mortgage lending in Sweden.269 n/a n/a n/a n/a 970 n/a n/a n/a n/a n/a 9.849 -745 n/a n/a n/a n/a n/a 7 138.715 n/a n/a 61. € million 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK Iceland Norway Russia Serbia Ukraine USA n/a n/a n/a n/a n/a -3.944 n/a n/a n/a -2.676 n/a n/a n/a 748 n/a n/a 8.144 599 n/a n/a n/a n/a n/a n/a 204.134 927 n/a n/a n/a n/a n/a n/a n/a 1999 n/a n/a n/a n/a n/a 1.978 731 n/a 1.065 2005 n/a n/a n/a n/a 218 1.534 n/a n/a 75.222 2002 n/a n/a n/a n/a n/a 2.123 203 n/a 674 4.552 103 n/a n/a n/a 4.858 -323 n/a n/a n/a n/a n/a n/a 221.759 243 n/a n/a -1.882 -448 n/a n/a n/a n/a n/a 39 105.855 2006 n/a n/a n/a n/a 731 1.747 13.035 n/a n/a n/a 2.155 141 n/a 585 34.129 Source: European Mortgage Federation National Experts.298 935 n/a n/a n/a 1.962 11 n/a n/a n/a n/a n/a 189 201.860 110 n/a n/a n/a n/a n/a 103 112.840 585 n/a -790 2.Statistical tables 17.673 150 n/a 1.486 n/a n/a n/a 11.441 551 n/a 959 12.146 -389 n/a n/a n/a n/a n/a n/a 123.073 4 n/a 4.456 -1.822 330 n/a 1. National Central Banks.109 n/a n/a 65.411 11.625 n/a n/a 16.720 11.345 16.190 2007 n/a n/a n/a n/a 456 7. Net Non Residential Loans.672 2008 n/a n/a n/a n/a 1. Swedish lending figures in 2008 cannot be directly compared with the earlier figures 2008 EMF HYPOSTAT | 75 .053 2003 n/a n/a n/a n/a 449 2.186 n/a n/a -1.459 5.387 n/a n/a n/a n/a 1.648 n/a n/a n/a n/a n/a 39.704 n/a n/a n/a n/a n/a 23.240 1.327 n/a n/a n/a 8.748 4.895 1.090 159 n/a n/a n/a n/a n/a n/a 95.508 265 n/a n/a n/a 1.608 n/a n/a n/a n/a n/a n/a 83.970 n/a n/a n/a -4.426 -755 n/a n/a n/a -1.348 n/a n/a -5.604 n/a n/a n/a -5.163 n/a n/a n/a n/a 571 n/a n/a n/a n/a n/a 13.876 -9.047 n/a n/a n/a n/a n/a 42.113 n/a n/a 4.557 n/a n/a n/a 2.443 n/a n/a n/a -6.545 2000 n/a n/a n/a n/a n/a 892 n/a n/a n/a 6.758 580 n/a 2.
0% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 85.0% n/a 64.8% 80.0% n/a 56.Family Homes (annual National Average) 76 | 2008 EMF HYPOSTAT .1% 2003 n/a 80.0% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 60.0% n/a 2007 n/a n/a n/a n/a 56.0% n/a n/a n/a 61. Loan-to-Value ratios for mortgage loans.0% 65.0% n/a n/a n/a n/a 78.3% 80.0% n/a n/a n/a 70.0% n/a n/a n/a n/a 73.0% n/a 64.5% n/a 80.4% 85.6% n/a 77.0% n/a Source: European Mortgage Federation National Experts.0% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 80.0% 47.2% 65.0% n/a n/a 80.Statistical tables 18.0% n/a 72.1% 80.0% n/a n/a n/a 54.8% 2001 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 81.5% 63.0% n/a n/a n/a 75.5% 2004 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 58.0% n/a n/a n/a n/a 76.0% n/a n/a 80.0% n/a n/a 80.0% n/a n/a n/a 75.0% n/a n/a n/a n/a n/a n/a n/a 71.0% n/a n/a 70.0% n/a 79.2% 2002 n/a 80.0% 80.4% 90.3% 65.0% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 68.0% 60.0% n/a n/a 70.0% n/a n/a n/a n/a n/a n/a n/a n/a 56.0% n/a n/a n/a n/a 75.0% 74. European Central Bank.3% 65.0% n/a n/a 70.9% 1999 n/a n/a n/a n/a n/a n/a n/a n/a n/a 68. national averages (%) 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK Iceland Norway Russia Serbia Ukraine USA n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 87.0% n/a 58.0% 90.0% n/a 64.0% n/a n/a n/a n/a n/a n/a 80.0% n/a n/a n/a n/a 78.0% 52.0% n/a n/a n/a n/a n/a n/a n/a n/a 54.9% 65.0% n/a n/a n/a n/a n/a n/a 52.0% n/a n/a 70.0% n/a 80.0% n/a 77. Federal Housing Finance Board Notes: n/a: figures not available Germany: average for clients of mortgage banks and commercial banks Iceland: first-time buyers Spain: new lending only USA: average LTV For conventional Single.0% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 80.0% 60.0% n/a n/a 55.0% n/a 2008 n/a n/a n/a n/a 56.9% 2005 n/a 80. National Central Banks.0% 75.0% 74.0% n/a 85.0% n/a n/a 53.0% 85.0% 80.9% n/a n/a 80.0% n/a n/a n/a n/a 77.5% 2000 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 84.7% n/a 2006 n/a 80.6% n/a 72.
39% 4.97% 3.75% 8.30% 5.38% 6.Statistical tables 19.60% 5.94% 1999 6.36% 5.10% n/a n/a n/a 7.00% n/a 5.18% 5.19% n/a 8.00% n/a 5.93% 10.29% 6.30% 3.50% n/a n/a n/a 8.46% n/a n/a n/a 6.50% 4.16% 3.22% 4.32% 4.98% 15.47% 4.14% 7.10% 14.87% 6.54% 2003 4.00% n/a 7.30% 4.70% 5.11% 6.05% n/a 5.90% 6.70% 14.00% n/a 6.99% 10.40% 4.58% 5.04% Source: European Mortgage Federation.04% 4.10% 5.29% 13.50% 4.10% 17.17% 6.74% 4.90% 5.90% 4.10% 4.98% 5.65% n/a 8.30% 5.80% 5.00% n/a 6.30% 11.50% 2.36% 5.31% 11.75% 5.95% 4.65% n/a 6.30% 3.00% 5.15% 10.11% 4.52% 4.80% 5.45% 4.03% 3.62% 6.18% 3.50% 3.00% 5.05% 4.00% 5.00% 4.33% 6.90% 4.55% 13.52% 4.20% 4.65% 6.60% 4.44% 3.48% n/a 8.10% n/a 6.60% 6.03% 6.00% 5.52% 6.30% 4.98% n/a 7.75% 9.86% 2006 3.41% 2007 4.03% 8.20% 5.70% 3.89% 5.20% 4.85% 8.82% 5.23% 4.70% 5.76% n/a 5.58% n/a 7.64% 4.91% 5.78% n/a 5.90% 4.30% n/a 5.40% 4.25% 4.00% n/a 9.10% 8.40% n/a 5.41% 4.40% 17.71% 4.40% 4.34% 4.90% 7.94% 5.50% 4.40% 5.62% 5.23% 6.10% 3.41% 6.36% 5.22% 3.40% 10.69% 5.10% 5.96% 5.68% 4.80% 8.06% 2001 6.92% 5.70% 3.10% n/a 8.10% 5.48% 4.00% 4.70% n/a 6.97% 3.37% 5.95% 6.50% 4.14% 5.72% 3.82% 2004 3.50% n/a n/a n/a 6.57% 4.34% 7.10% n/a 4.00% 6.20% 9.90% 7.20% 6.00% 5.00% 4.13% 3.87% 7.27% 3.34% n/a 6.30% 3.80% n/a 9.00% 17.69% 6. National Central Banks Notes: n/a: figures not available Czech and Hungarian series has been revised US: Representative interest rate on 30-year new mortgage loans (conventional 30-year) For more information on the national definitions of representative interest rates.05% 4.50% 5.95% 4.58% 4.15% 3.97% 2002 5.70% 2.75% 6.80% 4.70% 4.00% n/a 6.43% 2000 7.75% 22.80% 4.90% 5.03% 4.00% 5.40% 8.40% 4.60% 5.70% 5.12% n/a 9.00% 17.40% 9.40% n/a n/a n/a 6.98% n/a 6.90% 4.25% 15.50% n/a 5.40% 7.95% 4.72% 5.27% 5.00% 22.30% 5.10% 4.35% 9.51% n/a n/a 20.60% 5.00% n/a 6.45% 4.84% 2005 3.50% 6.38% 6.64% 3.40% 5.62% 4.24% 13.90% 5.03% 3.52% 3.97% 3.20% 10.45% n/a n/a 5.00% 16.29% 12.10% 6.34% 5.13% 7.30% n/a 7.56% 4. see the annexed Explanatory Note on data 2008 EMF HYPOSTAT | 77 .00% 14.06% 4.93% 5.99% 3.40% 5.40% n/a 6.75% 25.00% n/a 7.40% 3.07% 5.80% 8.00% 7.50% 11.90% 5.60% 5.60% 3.00% 12.88% 6.20% 5.10% 14.50% 12.80% 4.75% 3.98% 4.58% 3.70% n/a n/a 16.40% 5.48% 4.40% 11.07% 5.79% 4.64% 4.21% 10.19% 4.70% 15.01% 6.63% 4.50% 11.75% 5.60% 6.80% 6.75% 6.74% 4.14% 4. Representative interest rates on new mortgage loans (%) 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK Iceland Norway Russia Serbia Ukraine USA 6.86% 8.30% 5.14% 6.00% 8.77% 4.10% 5.66% 7.63% 5.47% 5.60% 5.83% 5.40% 5.70% 5.80% 6.83% 3.34% 2008 5.01% 5.50% 5.00% n/a n/a 12.90% 15.44% 7.70% 6.00% 5.98% 5.62% 13.73% 4.40% 6.58% 7.78% n/a n/a n/a 5.37% 11.
937 Source: European Covered Bond Council Notes: n/a: figures not available 78 | 2008 EMF HYPOSTAT .395 n/a n/a n/a 8.267 50.105 23.000 n/a 1.316 n/a n/a n/a n/a n/a n/a 2000 n/a n/a n/a n/a n/a 155.555 206.543 300.768 55.683 n/a n/a n/a n/a n/a n/a 2004 n/a n/a n/a n/a 1.059 n/a n/a n/a n/a n/a n/a 2003 4.547 n/a 5.009 n/a n/a n/a n/a 2008 8.727 676 7.500 32.500 453 2.718 n/a 6.575 n/a 90 n/a 150 n/a 15.111 n/a 5.213 n/a 26.677 n/a n/a n/a n/a n/a n/a 2007 4.464 126.000 7.244 n/a n/a n/a n/a n/a n/a 2001 n/a n/a n/a n/a n/a 161.973 n/a n/a n/a n/a n/a n/a 2006 3.900 n/a 63 14 150 n/a 7.177 n/a n/a 432.977 561 15.334 n/a n/a 410.000 43.695 n/a n/a 21.075 6. Total Covered Bonds Outstanding (backed by mortgages).411 n/a 1.924 11.560 n/a n/a n/a 4.003 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 5.367 5.071 n/a n/a 11 12.886 n/a 5.184 n/a n/a n/a n/a n/a n/a 1999 n/a n/a n/a n/a n/a 155.794 n/a n/a n/a 261.027 n/a 3.000 558 n/a n/a 1.778 751. € million 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK EU27 Iceland Norway Russia Serbia Ukraine USA n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 1.000 n/a 264.306 n/a 5.133 n/a 250 26.987 13.894 92.000 571.956 250.614 n/a 307.104.707 n/a 14.568 n/a n/a 35 n/a n/a n/a n/a 160 n/a n/a 370 n/a 57.245 335.762 n/a 4.133 237.072 4.313 n/a n/a 160.816 246.484 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 7.499 n/a n/a n/a n/a n/a n/a 2005 3.489 n/a 5.850 n/a 3.079 256.959 643.000 n/a n/a n/a 1.098 365.500 95 n/a 150 n/a 20.548 925.873 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 15.899 300 23.425 187.235 n/a 150.362 n/a n/a n/a n/a n/a n/a 2002 n/a n/a n/a n/a n/a 212.000 n/a 54 14 n/a n/a n/a 220 n/a n/a 792 n/a 94.092 217.426 n/a n/a n/a 247.500 63.367 n/a 3.270 n/a 3.636 n/a 4.419.312 n/a n/a n/a 255.012 223.470 1.420 n/a n/a n/a 5.638 226.254 81.165 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 30.750 119.125 n/a n/a n/a 8.452 286.184 n/a n/a 1.000 n/a 60 14 n/a n/a 2.964 1.100 n/a n/a 504.Statistical tables 20.861 n/a 214.962 2.
067 n/a n/a n/a 49.500 52 2.293 n/a n/a 88.250 59.959 196.120 n/a n/a 133.553 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 2.176 n/a n/a n/a 956 114.115 17.336 n/a 1.900 n/a 20 n/a 150 n/a 5.726 n/a n/a 7 n/a Source: European Covered Bond Council Notes: n/a: figures not available 2008 EMF HYPOSTAT | 79 .000 n/a 617 n/a 67.587 n/a n/a n/a n/a n/a n/a 2005 214 n/a n/a n/a 2.675 n/a 23 n/a n/a n/a 8.000 199.583 n/a n/a 58.217 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 4.500 21.708 n/a 1.050 n/a 5.621 n/a 2.737 40.734 57.000 224 n/a n/a 455 n/a 55.352 n/a n/a n/a 51.234 n/a 1.013 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 8.961 0 n/a 11 n/a n/a n/a n/a 123 n/a n/a 258 n/a 27. Total Covered Bonds Issuance (backed by mortgages).010 44.500 12.500 6.819 266.Statistical tables 21.420 n/a 734 n/a 48.181 57.418 7.262 n/a n/a n/a 44.880 n/a 11.784 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 15. € million 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK EU27 Iceland Norway Russia Serbia Ukraine USA n/a n/a n/a n/a 77 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 77 n/a n/a n/a n/a n/a n/a 1999 n/a n/a n/a n/a 309 53.569 23.687 n/a n/a n/a n/a n/a n/a 2002 n/a n/a n/a n/a n/a 66.066 n/a 1.255 0 16.608 197 7.227 206 5.029 n/a n/a n/a 666 99.514 138.598 n/a n/a n/a n/a n/a n/a 2004 n/a n/a n/a n/a 744 95.331 9.321 n/a n/a n/a 939 113.638 31.500 11 n/a n/a n/a 5.109 n/a n/a n/a n/a n/a n/a 2000 n/a n/a n/a n/a 235 36.381 2.770 290.148 n/a n/a n/a n/a n/a n/a 2001 n/a n/a n/a n/a 274 61.397 33.256 n/a n/a n/a n/a n/a n/a 2003 1.874 333.138 n/a n/a 113.850 n/a 600 n/a 56.554 n/a n/a n/a n/a n/a n/a 2007 1.126 36.000 n/a 4 n/a n/a n/a 2.250 6.222 467.637 35.670 26.220 104.009 n/a 250 5.235 n/a 9.014 n/a 1.825 n/a n/a n/a n/a n/a n/a 2006 2.722 n/a 808 2.009 n/a n/a n/a n/a 2008 1.000 3.773 n/a 2.834 n/a 331 1.000 n/a 22 n/a n/a n/a n/a 63 n/a n/a 414 n/a 39.558 149.345 5.727 n/a n/a 6.959 n/a n/a n/a 3.134 n/a 6.
124 n/a 22.355 2005 n/a n/a n/a n/a n/a 100 n/a n/a 4.Statistical tables 22.858 280 25.060 n/a 4.130 741 n/a n/a 8.158 2003 n/a 2.401 Source: European Securitisation Forum.000 n/a n/a n/a 27.200 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 72.413 n/a n/a n/a n/a n/a n/a n/a 4.167 1.000 63.300 n/a 70.590 3.235 1.055.634.513 80.500 22.400 n/a n/a n/a n/a 9.469.150 n/a n/a n/a n/a n/a 3.797.030 n/a n/a 520 7.690 1.050 n/a n/a n/a n/a n/a n/a 4.820 9.000 1.611 n/a 1.048 2007 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 2.470 35.200 3.600 n/a 8.062.200 n/a n/a n/a n/a 25.790 3.300 n/a n/a n/a n/a n/a 55.679 2008 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 19.430.400 n/a n/a n/a 36.500 n/a n/a 8.669 n/a n/a n/a n/a n/a 3.080 n/a n/a n/a n/a 7.100 1.556 2002 n/a n/a n/a n/a n/a n/a n/a n/a 4.700 n/a n/a n/a n/a n/a 4.900 n/a n/a n/a 8.441 n/a n/a n/a n/a n/a 3.336 n/a n/a n/a n/a n/a 3.490 n/a n/a n/a n/a 17.500 n/a 4.900 n/a 8.200 n/a n/a n/a n/a 35.261 n/a n/a n/a n/a n/a n/a n/a 2.860 250 n/a 1.830 11.413 n/a n/a n/a n/a n/a n/a n/a 4.270 n/a n/a n/a n/a n/a n/a 6.000 n/a n/a n/a 16.000 55.568.500 n/a n/a n/a n/a 26.070 n/a n/a n/a n/a 17.661 2006 n/a n/a n/a n/a n/a n/a n/a n/a 300 6. Total Residential Mortgage-Backed Securities (RMBS) Issues.862 51 n/a n/a n/a 16.800 n/a n/a n/a 100 n/a 4.731. Federal Reserve Notes: n/a: figures not available 80 | 2008 EMF HYPOSTAT .000 n/a n/a n/a 6.000 n/a 7.805 n/a 6.430 n/a n/a n/a n/a n/a 3. € million 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK Iceland Norway Russia Serbia Ukraine USA n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 508 n/a n/a n/a n/a n/a 924 n/a n/a n/a n/a n/a 3.400 n/a 138.523.843 n/a n/a n/a n/a n/a 6.059 1.080 2.171 n/a 1.543 2001 n/a 60 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 1.353.393 n/a n/a n/a n/a n/a 3.301 n/a n/a n/a n/a n/a 3.885 2004 n/a 1.091 2000 n/a 39 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 2.542 n/a n/a n/a n/a n/a n/a n/a n/a 1999 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 1.920 n/a n/a n/a 20.700 16.
078.226 6.415 163.172.164 9.163 56.052.085 2.383 155.326 148.936 28.018.687 6.012.305 268.077 190.959 33.388 19.126 1.045 179.952 2.857 34.587 38.048 2003 223.782 289.572 8.208 123.594.615.312 21.929 269.842 34.262 184.491.014 984.093 7.436 19.979 238.828 2008 282.651 152.360 22.244 185.500 213.741 13.854 5.726 17.792 287.636 127.404 8.243.980 2001 212.470 114.915 29.335 122.819 11.497.652 9.018 36.180 101.212 42.190 207.320 13.423 102.582 13.410 74.549.769.420 148.924 188.467 Source: Eurostat.012 20.736 782.471 1.818 10.617 135.910.163.529 251.936 45.068 2.690 19.793 508.555 233.612 162.190 1.525 9.718 44.279.945 191.884 37.402 359.315.428.020 1.744 7.946 105.206 258.146 381.076.572 4.250 10.985 11.107 2.115 32.321.571 31.532 55.911 15.384.844 1.241 19.644 138.143.555 2.285 26.975 1.859 186.035 64.168 1.439 4.400 242.496 12.355 9.530 11.662 5.292 36.425.756 121.699.191.057 8.032 4.410 579.253 1.000 121.214 209.465 25.295 316.800 171.707 680.324 271.500 137.193 33.502 328.429 105.441.074 367.367.887 3.479.475 204.661 10.301 30.335.577.645 88.980 9.465 n/a 8.712 908.882 13.333 11.286 1.966 1.256 477.562 22.968 17.730 331.420 1.892.810 9.177.272 1.830 190.670.648 9.421 476.194 149.216 97.823 10.057.747 2000 207.848 267.960 185.431 54.573.818 17.372 2.099 9.656 2007 270.796 18.928 79.912 19.423 85.428 59.499 258.603 1.136 841.673 113.383 134.452 25.904 23.989 1.613 29.415 559.180 156.543 10.301 447.128 60.815 1.760 37.095 166.613.221 417.657 208.087.331 15.270 40.952.500 8.029 536.442 1.724 12.900 228.104 167.185 2.197 137.365 9.766 10.363 790.294 129.721 1.859 153.238 14.812.103 132.004 184.184 204.175 14.020.785 80.586 2006 257.062.512 116.767 11.731 212.242 2.868 1.582 52.048 10.887 10.711 199.193 157.160 146.248 12.665 15.520 22.226 9.734 1.237 144.527 729.929 10.955 24.937 25.938 1.160 69.150 12.598 6.532 10.875 12.931 78.042 281.359 8.140. GDP at Current Market Prices.265 1.863 162.262 197.253.721 33.632 9.015 9.558.682 139.118 16.603 1.053 941.804.878 1.900 185.023 27.673 30.661 386.659 100. International Monetary Fund.652 11.127.070 9.917 222.434 48.201 344.325 13.992 4.540 19.442 25.704 10.079 61.608 362.807.552.210.207 90.069 13.459.484 6.703.294 3.623 11.088.981 16.693 145.680 10.302 274.346 22.652 16.444.270 179.041 1.887 131.200 197.431 33.170 80.004.707 2002 218.641.745.220 1.422.032.726 4.215.548.077 1.728 88.091 1.189 2.535.378 7.782 9.579 282.615 70.948 148.369.935 616.912.899 15.307 19.354 9.553 227.537 310.998 n/a 37.498 227.421 182.706 1.572.800 28.894.534 11.375 13.091 157.387.124 1.113.678.550 1.391.814 2.950.126 27.184 11.047 23.051 2005 244.990 1.749 594.017 21.295.978 16.017.459 220.176 18.424.308 44. Bureau of Economic Analysis Note: n/a: figures not available 2008 EMF HYPOSTAT | 81 .165 20.118 242.462 2.974 1.841 45.435 630.023 23.826 11.726.757 143.530 155.206 34.489 465. € million 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK EU15 EU27 Iceland Norway Russia Serbia Ukraine USA 189.818 10.930 52.386 8.013 308.480 28.427 8.263 262.756 11.164 1.714 122.499 8.985 41.548 1.883 15.579 9.075 90.163 4.359 9.734.391 1999 197.453 301.Statistical tables 23.894 9.622 25.475 13.980 116.001 4.000 44.137 5.942 238.984 2004 232.025 104.773 52.600 284.142.916 139.345 1.523 491.678 247.889 8.956 344.200 5.660.045 177.837 330.495 173.801 69.964 244.714 130.243 23.701 241.095 534.248.034.113 10.335 1.284 305.538 16.525.851 82.966 21.
6 96.7 94.3 114.2 2000 131.5 113.5 62.6 178.4 128.7 35.2 140.9 115.1 63.9 73.9 133.5 147.3 103.4 124.3 114.5 267.3 137.2 90.8 52.7 83.4 138.2 127.6 47.1 116.2 110.7 98.0 60.1 114.8 113.2 130.3 2006 124.6 104.5 83.0 116.5 55.7 100.3 100.6 77.8 51.8 122.9 70.0 120.6 52.4 78.0 31.3 117.7 43.0 121.9 132.7 n/a n/a n/a 151.6 143.9 254.2 50.5 84.2 61.3 126.6 96.6 116.9 n/a n/a n/a 158.7 150.5 121.5 100.2 100.7 76.4 119.6 117. UE27=100 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK EU15 EU27 Iceland Norway Russia Serbia Ukraine USA 131.6 114.9 75.0 115.2 100. GDP per capita at Purchasing Parity Standards (PPS).1 63.5 267.8 115.2 119.2 120.2 56.0 117.9 26.1 217.7 164.4 120.5 108.0 67.6 122.5 128.8 48.7 183.7 53.2 161.8 122.2 90.5 117.0 38.9 36.9 41.3 63.4 69.9 87.1 54.5 81.3 77.0 129.1 247.9 35.6 40.3 125.0 119.1 67.9 100.7 47.7 119.7 130.1 144.0 122.4 100.4 101.0 116.0 115.4 94.3 48.0 123.3 90.8 104.6 44.1 65.2 77.3 48.0 29.1 164.5 88.9 76.4 100.2 116.3 100.1 104.2 101.3 38.7 2003 126.0 63.7 116.7 33.1 125.0 106.0 122.5 80.1 79.7 45.1 82.4 2007 123.0 50.0 112.1 123.6 117.5 29.8 108.8 100.1 142.8 120.9 2001 125.9 111.4 39.3 117.4 77.8 1999 131.3 100.5 131.1 178.4 80.8 62.0 37.5 87.9 Source: Eurostat Note: n/a: figures not available 82 | 2008 EMF HYPOSTAT .8 76.0 117.9 32.6 121.5 133.6 134.4 111.8 88.1 60.3 27.2 78.4 34.5 126.2 119.5 92.8 115.5 253.2 92.8 123.3 121.9 59.3 79.1 115.0 89.5 130.2 77.4 83.1 121.7 57.5 44.5 131.0 140.7 237.0 78.4 48.7 2004 126.7 2008 124.2 n/a n/a n/a 153.0 131.1 120.7 132.5 90.8 115.4 122.8 46.3 26.4 176.7 90.8 63.0 131.8 48.2 118.4 118.7 100.1 75.8 109.5 156.8 154.1 114.3 118.1 129.6 n/a 52.2 44.2 87.5 90.8 52.0 76.1 2002 126.7 50.1 n/a n/a n/a 154.8 116.7 41.3 75.Statistical tables 24.2 105.0 124.9 70.3 49.8 118.3 55.9 92.6 78.4 122.6 61.8 52.7 68.1 77.3 115.6 86.0 139.5 58.4 49.7 39.8 97.0 2005 124.4 n/a n/a n/a 151.3 76.4 n/a n/a n/a 155.7 118.9 57.6 115.0 130.9 114.7 n/a n/a n/a 155.8 26.1 240.1 110.8 n/a n/a n/a 161.1 78.9 42.0 89.4 101.2 70.0 131.7 119.7 78.7 31.7 115.3 52.0 115.1 115.2 n/a n/a n/a 156.4 n/a n/a n/a 152.4 125.0 132.8 114.8 80.3 76.8 42.1 86.1 82.9 53.2 120.7 130.0 125.5 110.6 74.5 234.6 258.0 26.6 95.7 90.7 70.7 121.4 79.1 50.4 112.3 122.1 99.4 54.1 56.1 144.3 55.3 243.4 n/a n/a n/a 159.4 129.3 81.2 115.4 36.6 34.8 38.9 65.4 102.2 42.2 125.7 94.9 111.3 112.9 86.1 57.8 123.1 115.9 27.0 130.2 122.3 115.5 36.
2% 4.7% 7.3% 1.1% 1.6% 3.2% 2.0% 4.0% 6.7% 1.9% 4.6% 1.5% 3.4% Source: Eurostat.0% 3.3% 4.5% 5.9% 0.4% 2.4% 3.2% 6.5% 7.5% 5.4% 12.4% 4.9% 3. Real GDP growth rate.9% 4.5% 1.7% 7.0% 3.5% 10.5% -1.2% 4.7% 3.9% 2006 3.9% 2.6% 0.2% -1.6% 3.1% 1.8% 4. OECD.4% 3.2% 2.7% 4.0% 4.5% 3.2% 10.4% 6.5% 3.7% 4.4% 4.2% 3.1% -0.4% 1.8% 5.4% 7.7% 3.1% 2.4% 7.9% 0.1% 1.7% 2.6% 3.2% 10.6% 4.3% 4. Bureau of Economic Analysis Notes: n/a: figures not available 2008 EMF HYPOSTAT | 83 .4% 3.3% -1.4% 4.5% 3.4% 4.0% 2.4% 6.8% 3.6% 1.3% 3.0% 4.1% 1.1% 4.5% 1.7% 1.3% 2.6% 5.2% 1.0% 5.9% -0.4% 2.3% 4.3% 3.0% 6.5% 7.6% -0.0% 8.0% n/a 2.5% 4.5% 2.2% 4.8% 1.0% 7.4% 4.8% -1.8% 2.9% 6.4% 0.9% 0.1% 5.5% 2000 3.5% 5.7% 2.6% 5.6% 3.2% 2.4% 1.3% 1.0% 1.0% 7.6% 1.9% 6.4% 6.6% 0.4% 3.6% 2.5% 8.0% 4.6% 0.1% 1.6% 4.9% 7.5% 4.5% 1.2% 9.4% 9.2% 3.2% 1.9% 4.0% 7.6% 7.5% 4.3% 7.5% 0.8% -4.9% 8.1% 7.6% 3.5% 0.3% 7.4% 6.9% 2.8% 2007 3.9% 4.8% 1.3% 3.6% 2.1% 4.0% 6.6% 5.6% 6.9% 8.2% 0.0% 2.7% 4.8% 8.1% 10.7% 3.5% 7.9% 3.6% 6.3% 4.0% 7.0% 2.5% 6.9% 0.1% 1.5% 2.5% 8.2% 1.7% 3.1% 5.1% 8.0% 3.6% 2003 0.3% 2.0% 5.5% 6.8% 3.3% 2.4% 6.1% 2.9% 2.2% 5.1% 2008 1.1% 6.3% 4.0% 3.9% 2.5% 6.4% 4.2% 7.1% 4.1% 6.0% 5.1% 6.7% 2.2% 4.6% 3.0% 0.3% n/a -1.9% 2.2% 5.8% 2.2% 0.4% 2.1% 4.4% 3.3% 3.0% 6.2% 2.7% 1.5% -2.4% -18.8% 1.7% 1.0% 5.9% 5.0% -4.2% 3.9% 2.6% 2.2% 4.0% 3.0% 5.9% 4.8% 2002 1.3% 10.9% 4.2% 0.9% 3.7% 2001 0.7% 7.8% 6.3% 10.0% 4.6% 1.4% 2.6% 1.2% 6.4% 3.3% 3.7% 6.6% 1.9% 2.9% 3.5% 0.5% 3.2% 3.8% 3.9% 3.7% 3.3% 2.9% 2.5% 4.9% 4.Statistical tables 25.4% 5.0% 4.1% 1.2% 2.1% 0.3% -1.2% 0.8% 3.0% -0.4% 6.0% 1.7% 2.0% -0. % 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK EU15 EU27 Iceland Norway Russia Serbia Ukraine USA 3.5% -0.4% 2.3% 4.2% 10.9% 1.9% 4.5% 4.7% 4.3% 2.5% 6.1% 3.2% 4.2% 2.2% 4.8% 1.9% 5.0% 3.1% 2.8% 1.9% 4.5% 0.2% 5.7% 4.8% 1.1% 5.9% -0.0% 3.4% 0.5% 2.4% 4.1% 3.7% 2.1% 1.5% 9.8% 2.4% 0.8% 5.0% 1.5% 5.3% 3.4% 5. International Monetary Fund.7% 2.6% 2.2% 8.9% 12.1% 1.1% 3.5% 3.9% 3.9% 3.5% 3.1% 8.1% 4.9% 3.4% 4.8% 9.2% 1999 3.7% 3.7% 0.5% 8.3% 2.8% 5.9% 6.3% 0.2% 0.4% 3.0% 0.6% 0.3% 2.0% 3.8% 4.8% 1.2% 3.0% 1.9% 1.4% 5.1% -3.2% 3.5% 2.4% 2.6% 2005 2.8% 1.8% 6.3% 2.9% 6.9% 1.8% 1.4% 2.1% 4.3% 2.4% 2.0% 5.1% 2.7% -5.5% 1.3% 3.7% 7.0% 5.5% 9.7% 2.9% 3.7% 5.5% 2004 2.8% 2.1% 2.7% 0.5% 6.7% 2.2% 4.
5% n/a n/a n/a n/a 3.8% 8.1% -4.5% -5.0% -1.0% 12.2% 5.0% 8.7% -4.0% n/a 0.0% 12.3% n/a n/a n/a 0.7% n/a n/a n/a 4.6% n/a n/a n/a -20.5% 6.8% 5.9% n/a n/a n/a n/a n/a -9.2% n/a -2.6% n/a n/a n/a 0.0% 1.2% -3.3% 10.0% 3.6% n/a n/a n/a 0.3% n/a n/a n/a n/a 2.9% 1.0% 10.9% 1.0% 2.8% 3.5% 7.3% 2006 0.9% 2008 0.7% 3.5% 2.0% 5.4% 16.2% n/a 6.1% -1.1% n/a -10.5% n/a n/a n/a n/a -3.4% 2004 0.3% n/a 1.8% 12.2% 3.8% 5.7% -1.1% -31.4% 1.0% 10.3% 8.7% 3.5% n/a 0.8% n/a 12.8% -0.2% n/a n/a n/a 0.2% 1.3% n/a 18.5% n/a n/a n/a n/a 4.6% n/a n/a n/a -2.3% 0.3% 0.6% 3.7% 5.7% n/a n/a n/a n/a n/a 9. Bureau of Economic Analysis Note: n/a: figures not available 84 | 2008 EMF HYPOSTAT .6% 3.7% 1.9% n/a n/a n/a 0.0% 3.0% n/a n/a n/a 6.3% 0.9% 0.4% 13.8% 5.5% n/a n/a n/a -17.8% 8.0% n/a 13.0% 4.3% -16.8% 0.6% n/a n/a n/a n/a n/a 10.1% 6.1% -2.6% 5.9% 15.4% n/a n/a n/a -0.8% n/a 6.3% n/a n/a n/a 10.7% 6.1% n/a 1.7% n/a 5.0% 11.3% 3.5% n/a n/a n/a n/a -6.9% n/a 9.%2 16.1% -0.5% 6.0% n/a n/a n/a n/a n/a 6.0% n/a n/a n/a 0. Real Gross Fixed Investment in Housing.6% n/a n/a n/a n/a 3.9% -0.2% 5.0% 2.4% -1.0% n/a 9.3% n/a 7.0% n/a n/a n/a n/a n/a 6.6% 29.3% 8.8% 15.1% 7.8% n/a n/a n/a 6.8% 13.8% -7.7% 5.3% 6.5% 4.2% n/a n/a n/a 0.3% 5.2% 3.1% n/a n/a n/a 18.8% 2003 0.5% -4.1% -5.4% 2002 -0.3% 12.6% 0.0% 0.5% -2.0% 2005 0.0% n/a n/a n/a 11.2% n/a n/a n/a n/a n/a 7.1% 15.2% n/a n/a n/a n/a 5.1% n/a 9.8% 6.7% 0.1% n/a 5.7% 3.2% 0.8% 1.6% n/a n/a n/a -7.5% 1.8% -3.3% 0.0% 13.2% n/a 5.8% n/a -15.7% n/a n/a n/a 7.8% 0. OECD.0% n/a n/a n/a n/a 5.0% 10.1% 2007 0.7% 2.8% Source: Eurostat.5% n/a n/a n/a n/a n/a 7.9% 3.7% n/a -28.0% n/a n/a n/a n/a n/a 3.9% 2.3% -6.9% 10.0% n/a 9.4% 2.8% n/a n/a n/a n/a n/a 11.7% 5.1% 1.6% 1999 0.0% -0.9% 9.4% n/a n/a n/a 12.0% 2000 0.4% -11. annual change (%) 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK EU15 EU27 Iceland Norway Russia Serbia Ukraine USA -3.1% n/a n/a n/a n/a 1.4% 10.3% n/a n/a n/a 4.0% n/a n/a n/a n/a n/a 10.6% 3.8% 2001 -0.4% n/a n/a n/a n/a 5.0% 7.2% 1.9% 5.Statistical tables 26.1% 4.5% 6.3% -5.6% 3.3% 14.9% n/a n/a n/a 8.7% 5.9% n/a 10.4% -6.4% -0.1% n/a n/a n/a n/a n/a 5.7% 0.2% n/a n/a n/a n/a 3.7% 3.
0% 0.9% 1.7% 7.9% 3.7% 17.5% 1.5% 6.2% 2.4% 2.3% 5.4% 2.8% 2.6% 0.0% 1.5% 7.3% 2.6% 10.2% 6.6% 2.7% 15.4% 3.2% 6.2% 0.6% 10.1% 5.7% 1.3% 1.3% 2.0% 19.5% 14.9% 1.0% 2. IMF Note: n/a: figures not available Please note that for non-EU countries the national Consumer Price Indices are given.7% 1.4% 5.7% 0.6% 3.3% 1.2% 2.7% 4.2% 3.2% 0.5% 2.9% -1.8% 7.9% 3.0% 2.0% 18.3% 7.6% 4.6% 2003 1.0% 6.7% 2.5% 3.1% 2.3% 2004 2.3% 2.6% 2.3% 1.3% 2.7% 2005 2.6% 2.0% 1.1% 2.2% 3.6% 1.7% 2.9% 2.2% 2.5% 3.0% 1.9% 2.0% -0.3% 2.8% 2.0% 4.0% 2.1% 3.3% 3.5% 11.0% 2.0% 1.1% 0.7% 9.2% 4.5% 3.3% 5.6% 3.6% 4.9% 3.8% 2.4% 0.9% 18.7% 7.4% 0.9% 3.3% 5.0% 3.7% 0.7% 3.7% 4.7% 2.9% 3.2% 6.7% 12.6% 1.3% 4.3% 0.8% 3.1% 2.3% 6.1% 6.0% 5.5% 1.0% 7.1% 1.9% 1.7% 5.8% 0.3% 2.7% 22.8% 1.4% 4.1% 2.0% 0.3% 6.2% 2.3% 2.9% 5.8% 3.7% 1.9% 2.4% 1.5% 12.9% 0.4% 2.2% 8.0% 1.0% 2.5% 1.6% 5.7% 12.9% 1.0% 2.5% 0.3% 2.9% 1.0% 2.0% 4.8% 2.0% 2.8% Source: Eurostat.3% 13.4% 6.5% 2.6% 1999 0.2% 2.4% 1.7% 9.9% 3.6% 1.8% 2002 1.5% 4.2% 2.8% 1.3% 4.4% 4.3% 0.2% 1.8% 45.1% 5.7% 1.5% 16.0% 10.9% 1.8% 2008 3.1% 2.3% 1.9% 1.9% 10.1% 2.4% 3.6% 3.2% 3.1% 2.6% 2.8% 12.8% 1.6% 2.4% 3.0% 6.8% 3.7% 3.2% 2000 2.7% 3.7% 2.2% 1.9% 3.6% 1.5% 3.3% 3.9% 4.3% 10.2% 4.1% 2.8% 3.Statistical tables 27.1% 4.1% 9.5% 1.7% 2.0% 2.4% 2.6% 2.3% 9. 2008 EMF HYPOSTAT | 85 .1% 2. annual change (%) 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK EU15 EU27 Iceland Norway Russia Serbia Ukraine USA 0.2% 2.8% 3.0% 2.1% 2.6% 1.0% n/a 30.5% 1.6% 1.6% 3.3% 2.6% 1.2% 1.0% 2.6% 2.7% 2.6% 1.9% 2.6% 2.3% 1.2% 1.7% 12.9% 3.0% 2.1% 3.8% 2.8% 2.0% 1.6% 3.0% 3.0% 0.4% 2.8% 1.8% 3.9% 2.1% 3.9% 5.3% 8.0% 1.5% 3.7% 1.5% 1.3% 2.3% 3.8% 1. which are not strictly comparable with the HICPs.2% 59.9% 2.3% 2.1% 1.1% 2.8% 4.3% 9.2% 4.8% 10.0% 7.7% 11.1% 5.3% 3.0% 2.4% 11.3% 4.0% 3.6% 0.7% 10.1% 2.1% n/a 41.2% 2.7% 2.5% 2.2% 8.1% 3.4% 6.9% 10.0% 3.5% 3.5% 1.5% 2.3% 2.3% 11.5% 1.7% 1.6% 2.2% 45.1% 91.0% 10.1% 4.7% 2.3% 3.7% 2. Harmonised Index of Consumer Prices (HICP).1% 4.0% 2.6% 2.4% 34.2% 6.7% 3.4% 2.2% 1.8% 1.4% 2006 1.3% 2.5% 15.3% 0.7% 9.8% 12.3% 15.8% 2.2% 2007 2.7% 1.2% 2.8% 2.0% 2.0% 11.8% 4.0% 4.6% 2.2% 4.4% 3.1% 1.8% 1.0% 1.4% 1.8% 1.1% 2.0% 6.8% 2.8% 2.8% 2.3% 4.6% 2.5% 7.7% 1.5% 12.7% 3.8% 11.0% 2.9% 2.1% 2.7% 1.5% 2.1% 1.7% 22.9% 6.0% 2.4% 3.8% 2.6% 70.6% 1.1% 22.1% 1.1% 2.4% 2.6% 2.5% 5.3% 2.2% 2.6% 2.4% 2001 2.9% 7.6% 1.8% 1.4% 11.1% 9.0% 28.3% 1.1% 10.3% 1.4% 7.3% 0.2% 2.3% 8.
172 2001 8.758 9.403 460 404 16.037 10.618 21.239 8.699 788 10.372 5.610 5.142 3.876 5.854 58.283 9.389 2.978 39.203 5.976 59.664 8.727 2003 8.140 10.552 145.756 482.923 282.833 308 4.800 7.040 2000 8.038 9.278 5.719 766 10.381 5.072 480.929 698 10.861 58.332 10.562 422 377 15.026 45.654 10.361 5.374 38.537 11.777 497.125 10.271 3.356 5. US Bureau of Census Note: n/a: figures not available 86 | 2008 EMF HYPOSTAT .785 377.160 60.379 5.854 1999 7.904 10.191 690 10.326 82.367 5.833 56.306 3.801 730 10.732 56.659 5.396 7.253 3.446 7.580 375.330 1.463 448 397 16.978 488.440 10.513 82.441 46.028 57.958 283 4.206 61.003 43.961 2.995 41.989 5.803 8.427 1.065 10.946 5.266 10.861 10.379 1.964 57.969 10.930 295.773 5.004 287.188 279 4.254 10.584 7.310 7.345 5.399 3.056 4.463 46.401 59.735 82.445 n/a 7.908 5.288 63.019 44.000 378.931 10.399 1.511 7.773 49.175 3.109 58.383 272 4.475 1. IMF.213 482.295 3.077 4.105 38.487 439 391 15.421 3.331 3.393 1.463 45.833 5.500 48.892 2005 8.619 2.002 10.523 5.364 3.300 7.529 21.883 59.319 2.438 11.462 2.577 144.300 63.200 7.186 329.874 9.115 10.384 1.999 82.148 60.319 3.848 58.478 n/a 7.411 1.251 5.667 7.218 380.998 43.329 21.102 10.200 7.323 5.207 10.985 39.654 38.864 38.191 10.476 444 395 16.000 7.606 143.006 10.174 10.260 10.280 3.258 38.964 8.343 59.172 10.181 60.800 50.935 82.703 402.217 11.059 Source: Eurostat.541 287 4.045 4.083 10.356 7.367 484 410 16.385 1.275 3.237 62.701 486.183 61.405 38.846 715 10.388 1.520 288 4.159 82.990 40.529 5.996 42.963 304.349 1.904 2.110 21.299 5.438 382.147 59.463 47.982 10.519 82.130 82.340 5.425 455 403 16.257 21.290 5.994 2.694 56.373 490.898 294 4.397 2.295 1.040 2002 8.Statistical tables 28.213 10.321 2.640 142.965 300 4.195 61.219 10.206 5.345 8.501 11.098 4.888 2.221 5.524 145.163 10.242 10.446 452 400 16.220 62.512 434 380 15.561 2006 8.011 60.761 749 10.256 62.575 82.267 5.971 10.667 10.263 7.900 56.102 7.230 683 10.808 10.481 47.376 477 409 16.281 292.351 5.909 59.379 1.380 1.076 276 4.407 21.460 1.111 10.382 3.149 21.057 10.994 40.545 492.021 10.193 38.195 21. 000s 1998 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK EU15 EU27 Iceland Norway Russia Serbia Ukraine USA 7.209 58.623 290.393 389.700 384.909 2.200 3.475 21.987 38.306 38.368 1.334 38.379 1.639 8.290 2008 8.348 5.048 60.660 10.343 5.395 375.393 5.477 8. Population.093 495.619 21.060 387.211 2004 8.778 56.041 10.892 706 10.050 8.760 38.314 1.262 11.646 298.752 2.632 291 4.214 8.753 82.941 59.119 301.363 2007 8.211 5.681 142.503 146.536 427 379 15.171 60.570 21.418 n/a 7.401 2.450 313 4.532 11.346 3.915 82.200 275.000 7.900 279.192 8.117 4.924 2.500 7.737 142.157 10.941 481.640 789 10.988 40.448 46.222 3.536 484.711 5.316 10.398 1.283 675 10.736 48.661 48.457 285.
Residential loans are loans for the purchase of a private property which can be secured or not secured on the residential property. unemployment and population are mainly from Eurostat. Gross residential lending: Total amount of residential loans advanced during the period. They are from the International Monetary Fund. Representative Interest Rates National definitions of interest rates used. E. still not complete. 10 years or more maturity.g. LV: Variable interest rate on new EUR denominated loans to households (≤1) LT: Variable interest rate on new EUR denominated loans to households (≤1) LU: Variable interest rate (≤1) MT: Interest rate on loans for house purchase to households and individuals NL: Interest rate on total new lending for house purchase PL: Variable interest rate (≤1) PT: The variable interest rate indexed to Euribor (≤1) 2008 EMF HYPOSTAT | 87 . BG: Interest rate (December) on long term loans to households for house purchase. Second mortgages or other transactions to increase mortgage debt for consumption or improvement of a residential property may be for some countries also included in the definition. Net residential lending: It refers to the new residential loans advanced during the period minus repayments. This interest rate is an average rate for fixed and variable rate products Mortgage Markets data Residential mortgage lending outstanding: Total residential loans on lenders’ books at the end of the period. in Belgium and France loans for house purchase are guaranteed with personal sureties. CY: Interest rate on housing loans secured by assignment of life policy DK: Adjustable mortgage interest rate. The interest rate usually floats every 6 or 12 months. It also corresponds to the change in outstanding mortgage loans at the end of the period. (Mortgage rate referenced to 6 months CIBOR) EE: It is the weighted average of the annual interest rate on housing loans granted to households for new EUR denominated loans FR: The rate communicated is the fixed average rate of secured loans “PAS” with a maturity of 12 and 15 years DE: Loans with an initial fixed period interest rate (5 to 10 years) GR: Reviewable interest rate after a fixed term of 1 year IE: Variable interest rate (≤1) IT: Variable interest rate on a loan of EUR 100. SI: APRC on new loans for house purchase to households in domestic currency ES: Effective average interest rate not including costs during the first period of the loan. inflation. however. This definition is. not all countries secure residential loans on the property. For instance.000 with a maturity of 20 years. according to an official reference rate for mortgages secured on residential property SE: Variable interest rate (≤1) UK: The average mortgage rate charged on all regulated mortgage contracts except lifetime mortgages newly advanced in the period. are the following: AT: APRC on new loans for house purchase to households BE: Long term initial fixed period interest rate. OECD and from the Bureau of Economic Analysis (for the USA) when not provided by Eurostat.Annex: Explanatory Note on data Macroeconomic data Macroeconomic data on GDP. where available.
EMF HYPOSTAT 2008 A review of europe’s mortgAge And housing mArkets 2008 Hypostat .
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