Hypostat 2015

Key Facts
Macroeconomic Situation
The European Union produced a positive GDP growth of 1.3% in 2014, thus
continuing the positive progress established in 2013 (0.1%), where the region’s
reserved the 2012 negative trend of -0.4%. The euro area registered a growth
of 0.8% in 2014.
Overall, net exports contributed positively to growth in 2014. A strong contributor
to this development was the depreciation of the EUR. Household expenditure
remained positive after a protracted period of contraction, thus positively
contributing to GDP growth. Governments in some Member States began loosening
up the fiscal consolidation policies adopted in the aftermath of the financial crisis.
Despite the aggregate economic growth, a level of fragmentation remains in
the EU in terms of GDP growth. However, this trend has eased in the last few
years due to the improved economic environment in the EU.
EU countries improved their performance in terms of GDP growth. The UK,
Poland, Hungary, Ireland and Luxembourg exhibited the most substantial
expansion in terms of GDP, meanwhile Cyprus and Italy alongside Finland and
Croatia lagged behind.
Unemployment went down across the EU by -0.7 percentage points. However,
the picture across the EU remains very fragmented. Inflation continued to
decrease across the EU, with the Harmonised Index of Consumer Prices in
the euro area coming down from 1.3% in 2013 to a meagre 0.4% in 2014.
Housing Market
House prices grew in most EU countries year-on-year. The most notable turn
around occurred in Spain where after a -4.2% in 2013, a +1.8% jump in house
prices in 2014 was observed.
The situation among different jurisdictions remained highly fragmented, with
some markets recovering, while others continuing to decline. Nonetheless, rate
of decline seemed to have slowed down across the board.
Price developments are not only very heterogeneous between the different EU
countries, but also within them. Many countries exhibited national house prices
moving at different paces depending on the region/city, with capitals and large
cities leading the price hike, while rural and remote regions held the average down.
Housing supply (as measured by the number of building permits issued, housing
projects begun and housing projects completed) remained at the same level,
with the exception of the number of building permits which increased in 2014.
Mortgage Markets
Total outstanding lending in the EU increased from EUR 6.7 trillion in 2013 to EUR
6.9 trillion 2014, i.e. equivalent to a year-on-year result of 2.52%. The euro area
contribution was only a plus 0.67%, whereas the non-euro countries grew 6.05%.
From 2008 to 2014 outstanding residential loans in the EU 28 increased by roughly
EUR 1 trillion a large. A third of this amount is due to EUR depreciation versus GBP.
Some countries contributed more than other to the increase in EU outstanding
residential mortgage lending. UK delivered an impressive 50% of the year-on-year
growth, however, this result was strongly influenced by the EUR slump versus GBP.
Interest rates on mortgage loans have fallen in almost all countries in the EU
as a reaction to the expansionary monetary policy stance of the ECB and other
central banks in the EU.
The ECB, in fact, together with most other non-euro area central banks has
cut benchmark rates over the course of 2014.
In terms of market structure for different mortgage interest rates, the EU is, again,
highly fragmented. Some countries almost exclusively have variable rate mortgages,
whereas others rely more on long-term fixed rates, or on a balanced mix.
There appears to be a general tendency towards fixed rates as borrowers try
to lock-in the favourable conditions available at this time.
Note
Hypostat, published by the European Mortgage Federation – European Covered
Bond Council (EMF-ECBC), presents annual statistics on EU mortgage and housing
markets, as well as data and information on a number of non-EU countries.
The present edition, “Hypostat 2015”, focuses on developments till early 2015 1 .
In the Statistical Tables, data is presented in EUR. This may, however, introduce
exchange rate distortions for countries outside the euro area. Please see the
exchange rates used in this edition on Table 27 of the Statistical Tables section.
Finally, though Hypostat aims to publish consistent data across countries and
over time, not all data can be fully compared between countries, owing to
some methodological differences present at the source. The EMF-ECBC strives,
through Hypostat, to provide a comprehensive and comparable source of data
and information on the EU (and beyond) mortgage and housing markets. For
further information on the definitions and sources used, please refer to the
Annex: “Explanatory Note on Data”.
Please note that:
Date: “Q1 2014” stands for “the first quarter of 2014”;
Diminutive: “bps” stands for “basis points”; “LTV” stands for “loan-to-value”;
“EC” stands for “European Commission”, “EP” stands for “European Parliament”
and “NPL” stands for “non-performing loans”;
Variation: “q-o-q” stands for “quarter-on-quarter”; “h-o-h” stands for “halfon-half”
and “y-o-y” stands for “year-on-year”.
1
Please note that the edition presenting developments in housing and mortgage markets till
early 2012 is titled “Hypostat 2011”; the edition immediately following that, and focusing on
developments until early 2013 is “Hypostat 2013, therefore, due to a change in the naming,
there is no “Hypostat 2012”.
2015 EMF HYPOSTAT | 7