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“EMF Hypostat 2008: statistics reveal an acceleration of trends already witnessed in 2007”

Date

17 Nov 2009

The latest version of Hypostat, the EMF’s annual statistical handbook on mortgage markets, has been published and is available for download on the EMF website www.hypo.org The 2008 statistics reveal an acceleration of trends already witnessed in 2007: - very modest growth in outstanding residential lending compared to the double digit growth of recent years; - stagnant or falling house prices; - a difficult market for mortgage funding; - a fall in housing activity in the EU15; - and yet much variation on the overall impact of the economic crisis in housing markets across the EU27, with some countries experiencing much greater adjustments than others. Going forward, despite massive cuts in interest rates by Q4 2008, a poor outlook prevailed for 2009 with forecasts for deterioration in unemployment figures and slower or negative GDP growth into 2009. Other key facts from Hypostat 2008 are: • Aggregate outstanding residential lending in the EU decreased for the first time on record (by 1.2%) on the previous year, accounting for 49.8% of the EU`s GDP (51.2% in 2007). Though, were it not for the sharp fall of the Pound in late 2008 (total outstanding residential lending is expressed in Euros and the UK accounts for 24% of this total), this figure would have shown a modest increase; • Housing activity, including housing permits, housing starts and housing completions, slowed down almost everywhere in the EU, and in some countries returned to almost 1998 levels; • A mixed picture in house price growth across the EU, where some countries experienced moderate or dramatic falls, while in others house price growth rates in nominal terms remained positive though decelerating sharply. On average, house prices increased by 0.3% in the EU (7.0% in 2007); • The first three quarters of 2008 saw an increase in the ECB central rate, slowing down further Europe’s residential mortgage markets. Though by the last quarter of 2008, the ECB dramatically reversed its monetary policy lowering the central rate by 175 basis points (from 4.25% in October 2008 down to 2.50% by year end) to re-launch economic activity. According to more recent data, these cuts were finally passed to mortgage interest rates in most EU markets; • The publication contains for the first time data on the United States, a key mortgage market but also the scene of the subprime loans crisis which triggered the global credit crisis. Hypostat 2008 is attached to this email. It will be available in hard copy at the EMF annual conference to be held at the Brussels Sheraton hotel on 19 November, 2009. Contact Persons: Susan Yavari Tel: +32 2 285 40 46 Head of Economic Affairs syavari@hypo.org Alessandro Sciamarelli Tel: +32 2 285 40 42 Statistical Adviser asciamarelli@hypo.org For further information on the activities of the European Mortgage Federation please contact: Avenue de Cortenbergh 71, B-1000 Brussels, Belgium Tel. +32 2 285 40 30 - Fax +32 2 285 40 31 E-Mail: emfinfo@hypo.org - Website: www.hypo.org

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