European Mortgage Markets

Transcription

1 A Datamonitor report European Mortgage Markets Identifying opportunities for Australian lenders Published: Jan-04 Product Code: DMFS1637 Providing you with: Market sizing and forecasts of gross advances to 2007 helping you to plan ahead Eight country specific chapters on France, Germany, Ireland, Italy, Netherlands, Spain, Sweden and the UK Use this report to Competitor information and eight individual company profiles helping you to understand the competitive environment in these countries Compare the past, present and future of European mortgage markets relative to the market in Australia

2 European Mortgage Markets - Identifying opportunities for Australian lenders DMFS1637 Introduction Europe has an array of diverse mortgage markets. Any Australian company planning to enter a European mortgage market must therefore do so having investigated the size of the market, its competitive and regulatory environment and projected future growth. Providing information on these topics and more, European Mortgage Markets is invaluable for companies wanting to know about this sector. The Australian mortgage market has performed as strongly as the leading European markets over the last few years. Yet, relative to Europe's largest markets, the Australian market remains small. Given its strong performance there are also justifiable concerns that it may be prone to collapse should economic conditions change. Key findings and highlights Reasons to buy Ireland remains a small but vibrant mortgage market and although Datamonitor predicts the market s growth to slow over the next five years, relative to other European markets it will continue to grow strongly. The UK market boasts a large number of well-positioned small lenders that would be valuable acquisitions if the opportunity arose. Many of these lenders operate in specialist markets such as buy-to-let or self-certification and their acquisition could therefore stimulate the development of these markets within Australia. A number of foreign players are already active in the Spanish mortgage market servicing the demand for property among non-spanish buyers. Property demand from these buyers who often come from the UK, Germany and the Netherlands will remain strong. However, it is often channeled through intermediaries based in buyers home countries. Market sizing and forecasts will allow you to compare the past, present and future of European mortgage markets relative to the market in Australia Competitor information will help identify potential acquisition targets Discussion of opportunities in mortgage markets in Eastern Europe draws attention to newly emerging markets that are now among the most dynamic Contact us... From Europe: tel: fax: fsinfo@datamonitor.com From the US: tel: fax: usinfo@datamonitor.com From Asia-Pacific: tel: fax: apinfo@datamonitor.com

3 Sample pages from the report The UK Mortgage Market ownership. Over the period gross advances increased at a compound annual growth rate of 27.7 per cent. Despite the continuing marginalization of first time buyers this was the highest rate of growth in Europe. Although house price increases have now slowed in the UK, house prices remain high and steady increases above the long-term average are still being recorded in many areas. Following the recent increase in interest rates in November 2003 it is impossible to rule out further rate rises in The Those Italian proposing Mortgage rate increases Market do so with an argument based, at least in part, on the overheating housing market and the associated consumer credit boom. A higher interest rate environment will slow down the mortgage market s growth. no extensive branch network throughout the country. However, interest rates are likely to remain low relative to what they have been over the last ten years and as a result the mortgage market will continue to grow. Yet, despite these disadvantages Banca Woolwich has achieved considerable success. This section first highlights Banca Woolwich s success and then offers Gross advances will amount to EUR explanation billion in of 2007 how this success has been achieved. All in all, Datamonitor believes that gross advances in the UK mortgage market will amount to EUR billion in 2007 having grown New business at a compound grows annual at 52.7 growth per cent rate per annum of 6.0 per cent over the period. During 2004 the market will grow by 9.5 Between 1998 and 2001, the total value of Banca Woolwich s new business grew per cent. However, from then on growth of no more than 6.2 per cent per annum will from EUR 313 million to EUR 1,381 Australian million, representing and European average annual growth be recorded. In 2006 the market will grow by only 3.7 per cent. rate of 52.7 per cent. Although its new Mortgages mortgage business Compared dipped slightly in 2002 to EUR 1,114, Banca Woolwich s five-year performance is still impressive. Total lending commitments have risen rapidly Figure 49: With the exception of a slight dip in new business in 2002, Banca Woolwich has grown The impressively Reserve Bank over of the Australia last five publishes data on total lending commitments in a Mortgage gross advances, EUR Million years, ,600 1,400 1,200 number of areas in the consumer and commercial credit markets. In order to allow comparison with markets in Europe Datamonitor has combined total lending commitments in a number of these areas to identify total lending commitments in the Australian mortgage market. Types of lending included in this figure are lending for: the purchase of new homes; -19.3% 1,000 the purchase of existing homes; 800 the refinancing of existing homes; alterations and additions (home improvements); European Mortgage Markets 200 DMFS1637 the purchase of properties for investment purchases (buy-to-let purchases). Datamonitor (Published 12/2003) 0 Page 286 This brief is a licensed product and is not to be photocopied Total lending commitments in the Australian mortgage market amounted to AUS$161.8 billion in 2002 Source: Datamonitor, Banca Woolwich D A T A M O N I T O R According to the Australian Reserve Bank total lending commitments in the Australian CAGR: 52.7% mortgage market amounted to AUS$161.8 billion in This was up from AUS$131.7 billion in 2001 and AUS$83.2 billion in Over the period total lending commitments therefore grew at a compound annual growth rate of 18.1 per cent. European Mortgage Markets At the time of writing data on total DMFS1637 lending commitments during 2003 is only available Datamonitor (Published 12/2003) for the first six months of the year. Page It reveals 190 that during the first half of the year total This brief is a licensed product and is not to be photocopied lending commitments amounted to AUS$92.6 billion. Given that the Australian mortgage market has remained strong in the second half of 2003 it is fair to assume that total lending commitments may surpass AUS$200 billion by the end of the year. European Mortgage Markets DMFS1637 Datamonitor (Published 12/2003) Page 71 This brief is a licensed product and is not to be photocopied Request more sample pages...for FREE! From Europe: tel: fax: fsinfo@datamonitor.com From the US: tel: fax: usinfo@datamonitor.com From Asia-Pacific: tel: fax: apinfo@datamonitor.com

4 European Mortgage Markets - Identifying opportunities for Australian lenders DMFS1637 Table of contents ABOUT DATAMONITOR EXECUTIVE SUMMARY Australian and European mortgage markets compared - Interest rates are low in Australia and across Europe - The level of owner occupation in Australia is equal to the European average - European mortgage market gross advances amounted to EUR billion at the end of Australian house price increases have matched those in the European hot spots - Developments in the European mortgage bond market Country-specific chapters - The amendment of the Mortgage Bank Act, Accounting for the Spanish house price boom Competitor profile: Rabobank - A brief history of Rabobank - Rabobank has a 24 per cent share of the Dutch mortgage market - A SWOT analysis of Rabobank - Forecast of gross advances in the Swedish mortgage market, - Market entry opportunities Future opportunities in European mortgage markets - The fastest growing markets will remain so over the next five years although growth rates will be lower across the board - Competitive intensity has increased confirming optimism about the future of mortgage markets in the transition economies INTRODUCTION What is this report about? Who is the target reader? How to use this report Scope Related reports AUSTRALIAN AND EUROPEAN MORTGAGE MARKETS COMPARED Macroeconomic conditions - Unemployment has fallen in most countries - Interest rates are low in Australia and across Europe - Australia is enjoying faster GDP growth than many European countries The composition of housing stock - Australia has a higher number of persons per dwelling than countries in Europe - The level of owner occupation in Australia is equal to the European average Lending figures - Total lending commitments have risen rapidly - European mortgage market gross advances amounted to EUR billion during European mortgage market balances outstanding stood at EUR 3,702 billion at the end of Mortgage balances outstanding as a percentage of GDP vary widely within Europe - The number of residential mortgage loans advanced in Europe surpassed 3.1 million in 2002 House prices - Australian house price increases have matched those in the European hot spots Product availability - A wide array of products is available in the Australian mortgage market - Product availability is generally poorer in Europe although the UK is an exception Conclusion - The Australian economic environment is now more uncertain - Expertise gained domestically will be an asset overseas KEY ISSUES IN EUROPEAN MORTGAGE MARKETS Mortgage product trends within Europe - Variable and fixed rate mortgage products vary in popularity within Europe The changing face of mortgage funding in Europe - Explaining the ways that mortgage lending is funded - Developments in the mortgage bond market of European mortgage markets - Basel II: big changes on the horizon in European Code of Conduct on Home Loans Mortgage distribution channels - Branches remain the most important mortgage distribution channel Conclusion THE FRENCH MORTGAGE MARKET - State involvement is significant in the French property market Competitor profile: Crédit Agricole - A brief history of Crédit Agricole - A leader in the French mortgage market - La Poste: a new competitive threat to Crédit Agricole - A SWOT analysis of Crédit Agricole Forecast of gross advances in the French mortgage market, - Economic difficulties will harm the mortgage market THE GERMAN MORTGAGE MARKET - The low level of homeownership: a restriction on the German mortgage market - The amendment of the Mortgage Bank Act, 2002 Competitive profile: BHW - The Bauspar system explained - A brief history of BHW - Although Bauspar is still its primary product, BHW has undertaken a major shift in focus over the last few years...although it is important not to overplay the impact of interest rate increases in the current environment, it is also important to acknowledge the extent of indebtedness in the Australian economy. It is therefore inevitable that when interest rates do rise so too will loan losses incurred by lenders. Australian lenders should therefore have already begun to tighten their lending criteria to lessen their exposure to any economic instability... Alex Boorman, Datamonitor Analyst

5 - A SWOT analysis of BHW Forecast of gross advances in the German mortgage market, - A higher level of homeownership will boost the mortgage market but only over the long-term THE IRISH MORTGAGE MARKET - Irish house prices have rocketed - The introduction of the Pfandbrief concept into Ireland - Recent developments in Irish housing policy Competitor profile: First Active - A brief history of First Active - First Active is the fourth largest mortgage lender in Ireland - First Active brings the current account mortgage comes to Ireland - A SWOT analysis of First Active Forecast of gross advances in the Irish mortgage market, - Affordability constraints will hinder the market's growth THE ITALIAN MORTGAGE MARKET - The ever-growing Italian owner occupied sector - The Banking Law Competitor profile: Banca Woolwich - A brief history of Banca Woolwich - Banca Woolwich has become a significant force in the Italian mortgage market - A SWOT analysis of Banca Woolwich Forecast of gross advances in the Italian mortgage market, - The increasing propensity for Italians to borrow will fuel a growing mortgage market THE DUTCH MORTGAGE MARKET - Following several 'hot' years Dutch price increases have now slowed - Creating a favorable environment for Dutch home buyers - The 2001 income tax reforms: affecting second home owners Competitor profile: Rabobank - A brief history of Rabobank - Rabobank has a 24 per cent share of the Dutch mortgage market - A SWOT analysis of Rabobank Forecast of gross advances in the Dutch mortgage market, - The increasing level of owner occupation and steadily increasing house prices will account for rising gross advances THE SPANISH MORTGAGE MARKET - Accounting for the Spanish house price boom - Improving the position of the cajas Competitor profile: Banco Popular - A brief history of Banco Popular - Banco Popular has increased its presence in Spain - Banco Popular is relatively well positioned across its product portfolio - Banco Popular's expansion into Portugal: examining the motives and the likely outcomes - A SWOT analysis of Banco Popular Forecast of gross advances in the Spanish mortgage market, - Growth will remain strong in the Spanish market THE SWEDISH MORTGAGE MARKET - A low level of construction is constraining the Swedish mortgage market - Bringing the Swedish covered bond market into line with those elsewhere in Europe Competitor profile: Spintab - A brief history of Spintab - Maintaining operating profits despite falling staff numbers - A diversified distribution network - Taking top spot in the mortgage market - A SWOT analysis of Spintab Forecast of gross advances in the Swedish mortgage market, - The economy's reaction to the rejection of the euro is key THE UK MORTGAGE MARKET - UK house prices have exploded - The FSA has a new regulatory remit Competitor profile: Northern Rock - A brief history of Northern Rock - Northern Rock: a small but successful mortgage lender - Accounting for Northern Rock's success - A SWOT analysis of Northern Rock Forecast of gross advances in the UK mortgage market, - Higher interest rates will make it a different environment over the next five years...the readiness of Irish consumers to accept new product innovations should be noted by companies considering entry into the Irish market. It suggests that it will be hard to bring anything new to the Irish market but conversely that Irish consumers will not need to be educated on the merits of these new products... Alex Boorman, Datamonitor Analyst

6 European Mortgage Markets - Identifying opportunities for Australian lenders DMFS1637 FUTURE OPPORTUNITIES IN EUROPEAN MORTGAGE MARKETS Conclusions from the market forecasts - The changing dynamics of the forecast markets - Slower growth will result in a new business environment over the next five years Newly emerging European mortgage markets - Market conditions are now improving - Mortgage markets have benefited as countries have prepared for EU membership APPENDIX Supplementary data - Underlying drivers of European Mortgage Markets - Key Issues in European Mortgage Markets - Country specific chapters Definitions Research methodology Forecasting methodology Bibliography Relevant Datamonitor publications - Reports - Briefings - Future Datamonitor Publications Relevant links - Europe wide associations and organizations - Country specific associations and organizations - Lenders Datamonitor custom research capabilities SPP writing team How to contact experts in your industry LIST OF TABLES LIST OF FIGURES For a complete Table of Contents including full lists of tables and figures please contact fsinfo@datamonitor.com Contact us... From Europe: tel: fax: fsinfo@datamonitor.com From the US: tel: fax: usinfo@datamonitor.com From Asia-Pacific: tel: fax: apinfo@datamonitor.com

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