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).