2019 – Q3 | Mortgage market revival

By Banking, Mortgage Update, News

Utrecht, November 7, 2019 – The revival of the mortgage market results in the best third quarter since 2007. Mortgage revenue grows across the market by 15.1% compared to the previous quarter to €28 billion. This marks the market’s recovery from the shrinkage in the first six months of the year.

“The strong third quarter ensures the market comes close to the level of top year 2018 on an annual basis,” says Joppe Smit from consultancy firm IG&H. Revenue growth in the past quarter is caused by a rise in the number of mortgages as well as a mortgage loan increase. Compared to the second quarter, the number of mortgages increased by 12.8% to 85,000. The average mortgage loan rose to a new record high of €324,000.

Download the IG&H Mortgage Update (in dutch)

Growth among first-time homeowners
Remarkably, the number of mortgages among first-time homeowners also increased (+1.8%), while revenue even rose by 17.2% compared to the previous quarter. This is caused by a strong mortgage loan increase for first-time homeowners. “A possible explanation is that first-time homeowners are older, which means they can afford a higher mortgage loan,” says Smit.

Existing homeowners remain the largest group of those who take out a mortgage with a 46% share. Furthermore, those taking out refinancing and additional loans once again contribute significantly to the growth of the mortgage market (+ 16.5% compared to Q2). Therefore, this group continues to grow, which means it is increasingly important for mortgage lenders to focus on it.

Growth in market share of ABN AMRO and Florius
The market share of banks as a whole, as well as that of the Top 3 Bank Holding, grows at the expense of investment funds enabling non-bank lending. With a 65.9% market share, banks reach the highest market share since 2013, despite a shrinkage of ING and Rabobank. Determining factors for this growth are the increase in banks’ market share among those taking out refinancing and additional loans as well as the substantial growth of ABN AMRO and Florius in the past quarter. A possible explanation is that ABN AMRO has an above-average share of production in the growing group of those taking out refinancing and additional loans.

You can read more about these developments in the appendix, where you can also find the Mortgage Update. We hope you enjoy reading it and welcome your response!

Sincerely,

Joppe Smit
Director at IG&H
E: joppe.smit@igh.com T: 0031 6 2035 2438

IG&H Mortgage Update – authors & data analysis performers:
Niels Roelofs (niels.roelofs@igh.com); Annelies Stemfoort (annelies.stemfoort@igh.com)

IG&H Dutch Mortgage Update: Mortgage market growth caused entirely by refinancers

By Banking, Mortgage Update, News

Dutch mortgage revenues grew in 2018 from 101 billion euros to 106 billion euros, according to consultancy bureau IG&H’s Dutch Mortgage Update. Compared to the fourth quarter of 2017, the number of mortgages shrinked considerably (8.7 percent). That was the largest decrease since the fourth quarter of 2013. As a result, the full growth in the mortgage market has come entirely from people who are not moving to new homes.

The number of mortgages also fell throughout 2018; by 2,1 percent to a total of 346.000. The average mortage sum few by  grew by 7.2% to 306,000 euros; the highest ever. Whilst the number of starters and existing homeowners in the market fell, the number of refinancers grew from 78,000 to 96,000 in 2018. This makes it the highest number ever. “These signs point to mortgage lenders not succeeding in retaining their existing customers”, says Joppe Smit, senior manager at IG&H. “These signs point to mortgage lenders not succeeding in retaining their existing customers.”

Lowest mortgage revenue growth fourth quarter 2018

The total mortgage revenue during the fourth quarter of 2018 was 28 billion euros; a growth of 2.2% over the third quarter. This is the lowest growth rate during this period since 2011.

Smit: “In previous years, there was additional market growth during the final quarter. This year we will not see as much of this. The lower number of granted mortgages and the smaller growth of the mortgage sums play a role in this. Moreover, the maximum lending capacity in past years was lowered at the end of the year, which always ensured extra volume during the final quarter. The lowering of the capacity did not happen this year.”

The shares of major banks during the final quarter sank to 50%, the lowest point in 3 years. Refinancers were responsible for 8.4 billion euros of the total mortgage revenue during the final quarter. The shares of starters (€5.9 billion) and existing homeowners (€13.8 billion) fell by 12 and 15 percent respectively compared to the fourth quarter of 2017. Foreign parties rose slightly to 4,7 percent. Both the largest grower and shrinker is an insurer this quarter. The market share of Nationale Nederlanden increases by 2.05 percent, while Aegon surrenders 3.31 percent.

Written by: Joppe Smit (Senior Manager), Lisa Klein Goldewijk (Banking Consultant) and Niels Roelofs (Banking Consultant).