According to the European Mortgage
Federation’s statistical publication on
European Mortgage markets, Hypostat
2003 has revealed a strong growth in Europe’s mortgage markets. Though the GDP
growth in European union area was of just 0.4% in the 2003 still the mortgage
markets grew by 7.4%. At end 2003 the total value of residential mortgage debt
outstanding in the EU15 was €4.24 trillion, equivalent to €11,200 worth of
housing debt per capita.
Recent Stance Of European Mortgage Market
The following points highlight the recent
trends of European Mortgage market.
The average rate of home ownership in the EU15 member countries is
64%.The lowest rate is in Germany (41%) and
the
highest rates in Spain and Greece(83%).
The average rate of growth of the residential mortgage market over
the last 5 Years is 9% and 8% over the last 10 years.
The total value of residential and non-residential mortgage loans
at the end of 2003 was approximately €5.1 trillion.
Germany and UK, the front line Players in European Mortgage Market
The top players in the mortgage market of
Europe represent over half of all Europe’s outstanding mortgage debt had to
face slower rates of growth at 1.2% and 4.4% respectively, compared to an EU
average rate of growth of over 7%.
Poorer macro-economic position in Germany has
marked repercussions on its
Housing and mortgage markets.
The UK
market has slowed down following a number of years of very rapid growth.
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Over all picture of European Mortgage Market
Countries like German and UK with other
European markets have faced a slower rate of growth in comparison to the
southern countries where the housing debt is very less.
The Mortgage market in the countries like
Latvia, Poland, Czech Republic and Hungary have experienced a phenomenal growth
averaging in excess of 50% per annuam. Some old EU members have also faced
strong growth due to rising home prices.
Countries like Greece, Spain, Italy, and
Ireland have faced a mortgage market growth of
Around 25% during 2003.
Rising House Prices In European Market
There is an overall increase in the housing
prices in EU areas in recent years by supporting to the consumption activity in
the country. The strongest prices increase was felt in the countries likeLatvia, Portugal, Spain and the UK. However the higher house prices have
fueled the demand of more mortgages.
The European Mortgage Federation
It is a European trade association, which
plays a significant role in the credit sector.
It groups together financial institutions consisting of granting mortgage loans in
the Member States of the European Union and Norway. This Federation was founded
in 1967 and based in Brussels. The Federation has brought together private and
public mortgage lenders, including universal/commercial banks, mortgage banks,
savings banks, mutual &
co-operative banks, building societies,
umbrella companies and insurance companies. Together they grant around 75% of
residential and commercial mortgage loans in Europe.
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Sources : EMF, Mortgage Bankers of America, EUROSTAT, Federal Reserve