emf q3 2011

The weak macroeconomic environment, ongoing sovereign debt and funding crises con-tinue to dampen mortgage demand, with a continuation of the subdued trend in mortgage lending observed across most EU markets in Q1 and Q2 2011, Germany and the UK being the only exceptions. Housing markets conditions continue to deteriorate, even though with different trends across countries. Nominal house prices increased on a yearly basis only in Belgium, France, Germany and Sweden. Monetary policies were further tightened over the summer of 2011 but quickly reversed to expansionary stance in Q4. As a result, mortgage interest rates recorded only small move-ments and remained at low levels.

EMF Quarterly Review of European Mortgage Markets

3rd Quarter 2011

Q32011

New mortgage lending in the EU continues to suffer from poor economic growth, high unemployment rates,

funding problems and sovereign debt crisis

In Q3 2011, the general subdued trend observed in Q1 and Q2 2011 was con-firmed. New lending markets generally recorded poor performances, which in most cases were weaker than in Q2 2011 (Table 2). The macroeconomic con-text continued to be unsupportive of mortgage demand: the only EU economy in recession in Q3 2011 was Portugal, but everywhere GDP growth rates have clearly lost further momentum (Chart 5); unemployment rates have not de-creased, except for Germany and Sweden (Table 6). Continued tightening in lending criteria, persistent funding difficulties due to the drought in inter-bank lending market and the uncertainty stemming from the sovereign debt crisis have all contributed to subdued performances in national mortgage markets in Q3 2011.

In the UK, gross lending recorded increases of 17.7% quarter-on-quarter and of 3.6% year-on-year (the latter following a 3.1% fall in Q2 2011). A 21% increase in house purchase lending was the main driver of this quarterly increase, but house purchase lending was still 5% lower than Q3 last year. There was also an increase in remortgage lending which grew by 15% compared to Q2 2011 and by 25% on a yearly basis.

The Danish mortgage market has been very subdued through 2011 and this trend has continued in Q3 2011. Net residential lending fell to EUR 1.1 billion which is very low in historical terms. Since 1995, net mortgage lending has on average been worth EUR 3 billion per quarter in nominal terms. Gross mortgage

QUARTERLY STATISTICS

Alessandro Sciamarelli | Head of Statistics | [email protected] | Tel: +32 2 285 40 42

European Mortgage Federation

Q32011 EMF Quarterly Review

lending increased by 10.4% on a quarterly basis but is still low in a historical context, i.e. well below the values recorded in the last two quarters of 2010. The main reason for this performance is the high degree of uncertainty in the economy and the housing market. For the economy as a whole, this is reflected in a drop in real GDP of 0.5% in Q3 2011. Moreover, demand for new loans is very low at the moment due to depressed housing market activity.

The Spanish mortgage market did not yet show signs of recovery in Q3 2011. In fact, new mortgage lending went down on a yearly basis by 23.8% (following from a 58.2% fall in Q2 2011), reaching a new record low. On a quarterly basis, it decreased by 17.8% (5.1% in Q2). Available data for October 2011 seems to confirm the downward trend over the year; indeed, 2011 is going to be one of the toughest years for the mortgage market since the onset of the crisis. Liquidity problems stemming from the sovereign debt crisis in the euro area and the continued deleveraging process - undertaken by both financial institu-tions and households - were the main reasons behind these developments. As a result, total outstanding mortgage lending is expected to close the year with a decrease of 6%.

In Ireland, new mortgage lending continued at a subdued level in Q2 and Q3 2011. The number of mortgages issued increased slightly by 1.6% in Q3 2011, compared with Q2 2011 and by 50.3% year-on-year, down to 3,607 loans, according to the IBF/PwC Mortgage Market Profile. Similarly the value of mort-gage drawdowns decreased marginally by 0.2% quarter-on-quarter and fell by 49.7% compared to Q2 2011 at EUR 623 million. In terms of net lending, the trend of household deleveraging continued with the total amount of residen-tial mortgage debt outstanding, including securitisations, decreasing by 7.7% year-on-year to about EUR 132 billion at the end of September 2011 (Table 1). Continued uncertainty regarding income and employment prospects is hav-ing an impact on mortgage demand. Unemployment averaged more than 14% for the first nine months of 2011 and real GDP dropped by 1.9% in Q3 2011, following two quarters of growth. A further decrease in household disposable in-come is expected over 2012 with changes to taxation policy and new household charges. Indications for mortgage lending in Q4 are a continuation of the same trend as in Q3. The National Management Asset Agency (NAMA), which is the asset recovery vehicle for property development loan books of domestic lend-ers, signalled it was developing a proposed solution for potential house buyers who have an interest and a capacity to purchase but who are constrained by fears that prices may fall further from current levels. NAMA plans to trial the pro-posed solution with mortgage lenders in early 2012. The government confirmed in December 2011 that mortgage interest relief would no longer be available for new homebuyers after 2012 but offered enhanced relief in 2012. Lending con-ditions remained difficult with lenders reporting that credit standards tightened somewhat in Q3 2011.

In Sweden, although the domestic macroeconomic environment continued to be very supportive, gross lending in Q3 2011 was at its lowest level since Q3 2008, and fell by 12.6% quarter-on-quarter (by 20% year-on-year). Net mortgage lending has slowed since Q1 2011, levelling off at EUR 3.2 billion in Q3 2011 (Table 3). The slowdown in mortgage lending is the result of several reasons: firstly, mortgage interest rates increased over recent last quarters (Tables 5A and 5B); secondly, lending criteria have tightened due to the LTV-roof of 85% imposed by the Swedish FSA, with banks demanding amortisation on mort-gages with LTV ratios higher than 75%; lastly, the general uncertainty resulting from the persisting international sovereign debt crisis in having an impact on the market. In Q3 2011 the Swedish economy continued to outperform all other EU economies, albeit at a lower rate: real GDP increased year-on-year by 4.6% (4.8% in Q2). Latest EU economic forecast, however, signal a considerable slow-down for the economy in 2012 (with a real GDP growth rate of 1.4%).

In France, new lending dropped in Q3 2011 by 7.8% quarter-on-quarter and by 17.2% on Q3 2010 but remained at high levels historically; since Q1 2011, the value of new lending has seen small movements between EUR 30 and EUR 35 billion at each quarter. However, mortgage demand is expected to lose momen-tum in Q4 2011 due to the sovereign debt crises in the euro area.

In Germany gross residential lending increased by 6.9% quarter-on-quarter and by 4.6% year-on-year. The mortgage market is in healthy condition, reflecting positive developments in the economy, a decreasing unemployment rate (Table 6) and real GDP growth (in year-on-year terms) set to exceed 2%, well above the EU average (Chart 6).

In Poland, outstanding mortgage lending in Q3 2011 reached PLN 313 billion (EUR 75 billion), an increase of 24.5% year-on-year (Table 1). Net lending was negative by PLN 6 billion (EUR 1.5 billion) (Table 3). Over the first three quar-ters of 2011, loans denominated in EUR have gained popularity: as of Q3 2011, 78.4% of new lending was PLN-denominated, while 11.8% were in EUR and 9.8% in CHF. Mortgage demand is expected to remain weak over the coming quarters due to new regulations coming into force at the end of 2011, while banks generally continued to tighten their lending criteria.

In Portugal gross mortgage lending went down by 63.4%, a more severe de-crease than in Q2 2011 (47.6%), and went down to its record low in absolute terms. The mortgage market downturn is expected to continue over the coming quarters, due to the implementation of the banking sector’s deleveraging plan set out in the bailout programme agreed with the Troika (the EU, the ECB and the IMF) and plummeting consumer confidence.

In Belgium, the value of gross mortgage lending went down by 8.8% quarter-on-quarter and by 6.2% year-on-year, but remained at very high levels. The mismatch with the 6.5% growth rate in the number of mortgage contracts can be explained by the fact that a significant number of credits has been granted for renovation purposes (in most cases, for small amounts). This reflected, among other things, the fact that some government measures such as “green credit” with interest subsidy came to an end at the end of 2011, while other measures, such as the tax deduction for energy saving investments have been discontinued. It should also be pointed out that new charges, such as VAT on notary fees, were announced, resulting in a real rush to secure mortgage credit during Q4 2011. Consumers wanted to benefit from the above measures be-fore they expired, so figures for Q4 2011 are expected to mirror another robust growth rate in new lending.

The Italian mortgage market recorded another year-on-year drop in new resi-dential lending (by 18.6%) following that already experienced in Q2 2011 (by 17%). Weak macroeconomic conditions, deteriorating consumer confidence and the worries stemming from the sovereign debt crisis over the summer - which increased funding costs for lenders - were behind this poor performance.

In Hungary, new lending went down by 24.6% compared to Q3 2010 and by 6.7% compared to Q2 2011. Mortgage interest rates on HUF-denominated mortgage loans have stayed above 10% over the first three quarters of 2011 (Table 5A). Potential borrowers are very reluctant to borrow given the general sentiment and the current economic circumstances. A growing problem is the fact that 65% of the outstanding residential portfolio is foreign-currency de-nominated, and this has been exacerbated by the further depreciation of the HUF against the CHF (by roughly 10% in Q3 2011). This depreciation also ex-plains why in nominal terms total outstanding residential HUF-denominated loans increased in Q3 2011 (Table 1). However, this increase is merely a result of the depreciation of the HUF, the real trend being stagnation. The outlook for economic growth is weakened by the global economic uncertainty, the tight fiscal measures of the Hungarian government and general domestic lending conditions. The Government has tried to ease the burden of households who are indebted in foreign currency mortgage loans and has introduced new relief pro-grams for debtors, but these steps have not significantly impacted the market.

In Romania, outstanding mortgage loans increased by around 14% in Q3 2011 on a year-on-year basis. EUR-denominated loans amounted to over 95% of new loans in Q3 2011. Banks continued to ease their lending criteria, and the govern-ment programme Prima Casă (“First House”) accounted for more than a half of new mortgage loans in Q3 2011.

2 | Q3 2011 EMF QUARTERLY REVIEW

Q32011EMF Quarterly Review

Source: European Mortgage Federation

Note:Please note that figures are calculated on values expressed in local currencies for non-euro area countries.

Chart 1 Total Outstanding Residential Lending, year-on-year growth rates (%)

Fran

ce

Rom

ania

Pola

nd

Belg

ium

Hung

ary

Swed

en

Italy

Denm

ark

Portu

gal

UK

Germ

any

Spai

n

Gree

ce

Neth

erla

nds

25.0

20.0

15.0

10.0

5.0

0.0

-5.0

-10.0

-15.0

Q2 2011

Q3 2011

Chart 2 Gross Residential Lending, year-on-year growth rates (%)


Note:Please note that figures are calculated on values expressed in local currencies for non-euro area countries.

Swed

en

Spai

n

Italy

Fran

ceUK

Denm

ark

Belg

ium

Hung

ary

Germ

any

Irela

nd20.0

10.0

0.0

-10.0

-20.0

-30.0

-40.0

-50.0

-60.0

-70.0

Q2 2011

Q3 2011

EMF QUARTERLY REVIEW Q3 2011 | 3


Chart 3 Nominal House Prices year-on-year growth rates, % (Q1 2006-Q3 2011)

Note: standardised nominal house price indices on national values


Chart 4 Nominal House Price Indices (Q4 2005=100)

I 200

6

II 20

06

III 2

006

IV 2

006

I 200

7

II 20

07

III 2

007

IV 2

007

I 200

8

II 20

08

III 2

008

IV 2

008

I 200

9

II 20

09

III 2

009

IV 2

009

I 201

0

II 20

10

III 2

010

IV 2

010

I 201

1

II 20

11

III 2

011

30.0

20.0

10.0

0.0

-10.0

-20.0

-30.0

Denmark

Ireland

Portugal

Greece

Spain

Sweden

Germany

Hungary

France

UK

Netherlands

IV 2

005

I 200

6

I 200

8

I 200

7

I 200

9

I 201

0

II 20

06

II 20

08

II 20

07

II 20

09

II 20

10

I 201

1

III 2

006

III 2

008

III 2

007

III 2

009

III 2

010

II 20

11

IV 2

006

IV 2

008

IV 2

007

IV 2

009

IV 2

010

III 2

011

140

130

120

110

100

90

80

70

60

Denmark GermanyFrance IrelandGreece PortugalHungary NetherlandsSpain SwedenUK



Chart 6 Real GDP, year-on-year growth rates (%)

Source: Eurostat

Chart 5 Real GDP, quarter-on-quarter growth rates (%)

2.0

1.5

1.0

0.5

0.0

-0.5

-1.0

-1.5

-2.0

-2.5

Irela

nd

euro

are

a

Pola

nd

Swed

en

Fran

ce

Hung

ary

Germ

any

Belg

ium

Denm

ark

Portu

gal

Italy

Neth

erla

nds

EU27

Rom

ania

Spai

nUKQ2 2011

Q3 2011

Source: Eurostat

6.0

5.0

4.0

3.0

2.0

1.0

0.0

-1.0

-2.0

-3.0

Hung

ary

euro

are

a

Fran

ce

Germ

any

Neth

erla

nds

Swed

en

EU27

Irela

nd

Denm

ark

Italy

Rom

ania

Pola

nd

Belg

ium

Spai

n UK

Portu

gal

Q2 2011

Q3 2011



Housing market conditions deteriorate, with few exceptions

In the UK, house prices reversed their trend and recorded their first quarter-on-quarter increase after three consecutive falls, but the downward trend on the same quarter of the previous year continued (1.4%, more or less as in Q2, i.e. 1.6%). House prices have recorded small movements over the first three quarters of 2011 and now are at the same levels of Q2 2010 (Chart 4). Low interest rates continue to sustain house prices, but pres-sures on disposable household income from rising food and fuel prices and increased taxes keeps a limit on the potential for further growth.

In Sweden, in Q3 2011 prices have decreased on a quarterly basis for the first time since Q3 2009 (by 0.2%), equating with a year-on-year growth rate of 0.9%, i.e. the lowest of the last nine quarters. However, the de-celeration from the strong price increases which were observed from Q4 2009 to Q1 2011 (Table 5) is resulting in a “soft landing”, although latest figures available reveal that house prices have fallen by around 4% to 5% in Q4 2011. Moreover, the number of houses and apartments for sale has increased over the year 2011. Particularly, the number of one-family hous-es for sale has reached a three-year peak. The slowdown in the housing market is expected to continue, despite the favourable domestic economic developments, due to the global economic uncertainty.

The French housing market recorded a bullish performance also in Q3 2011, with growth in house prices gaining further momentum (6.3% year-on-year, corresponding to a more modest 0.9% increase on Q2 2011). Breaking down the national figure, apartment prices grew year-on-year by a spec-tacular 9% (19.1% in Paris). The same developments were observed in Belgium, where national house prices went up on Q2 2011 by 3% (i.e. the highest quarterly increase since Q3 2007) equating with a 4.2% increase year-on-year. It is worth highlighting that yearly growth in house prices has been at least 4% in every quarter since Q1 2010 (Table 4).

In Denmark, house prices have fallen by 6.6% in yearly terms. It also was the fifth consecutive quarter-on-quarter decrease (by 4.3%, i.e. higher than in the previous four quarters). The housing market situation is in the worst state of the last two years. Except for the extraordinary plunge in prices in late 2008 and 2009, similar price slumps have not occurred since the crisis of the early 1990s. As was the case back then, the economic uncertainty makes buyers reluctant to enter the market. This has resulted in fewe trans-actions and falling prices.

In Ireland, in Q3 2011 the rate of decline in house prices accelerated. Prices of all residential properties (houses and apartments) nationally fell by 14.3% year-on-year, 3.8% quarter-on-quarter (with house prices declin-ing by 13.9%). The correction from peak (Q3 2007) in national house prices

stood at 44% by the end of September 2011. There is still a considerable volume of supply on the market, with around 60,000 units available for sale, according to the property website Daft.ie. A tighter rental market combined with improvement in house purchase affordability may encourage prospec-tive homebuyers to enter the market.

In Spain, housing demand in Q3 2011 was affected by weak economic de-velopment as market operators probably decided to wait-and-see until the new government settled in at the end of November. House prices decreased by 1.3% on Q2 2011 (5.6% on a yearly basis), and the cumulative peak-to-trough fall in house prices (from Q1 2008 to Q3 2011) reached 18%. Housing transactions decreased by 29.3% over the first three quarters of 2011 com-pared to the corresponding period of 2010, as the downward trend in Q3 2011 did not reverse resulting in a drop of 17% in quarterly terms.

In Germany, house prices continued to increase in Q3 201, i.e. by 1.7% year-on-year and by 1.4% quarter-on-quarter, the highest quarterly in-crease since Q2 2010.

In Portugal, the national house price index decreased year-on-year for the first time since Q4 2009 (by 0.8%), which was consistent with the second – albeit negligible – quarter-on-quarter decrease (0.1% in Q3 2011 after 0.3% in Q2). This is the result of the deteriorating economic situation and decreasing household confidence. Residential construction costs continued to increase (by 1.2% year-on-year) as a result of rising costs of building materials, rising energy prices and also higher taxes on transactions.

In Hungary, the decline in house prices slowed down in Q3 2011, resulting in a 1.5% fall in yearly terms and a 1% fall on a quarterly basis. As the bulk of the correction was realised one and a half years ago, in 2010 and in 2011 the downward trend in prices has moderated (Table 4). In 2011, supply of new dwellings has further declined. Residential construction activity during 2011 has continued to drop considerably (building permits went down by 32.5% in Q3 2011 compared to Q3 2010). Housing demand is being further weakened by household poor income and high unemployment which pose serious constraints to purchase decisions, although household real dispos-able income grew slightly during 2011.

In Romania, average house prices fell in Q3 2011 by 16% compared to Q3 2010 and by 7.5% on a quarterly basis. A similar pattern is also expected for Q4 2011. According to the latest Romanian National Bank’s Bank Lending Survey (November 2011), demand for new loans should continue to follow a downward trend in Q4 2011, albeit dampened by consumer expectation of higher unemployment rates over the next 12 months.



Interest rates record small movements as monetary policy temporarily tightens in Q3 2011

Monetary policies in the EU moved in two opposite directions during the last two quarters of 2011, with evident repercussions on mortgage interest rates passed on to borrowers. Q3 2011 saw a general tightening in mon-etary policy across the EU, while Q4 2011 was dominated by a complete monetary policy reversal. Central Banks focused on credit conditions and the state of the economy rather on inflationary concerns. The ECB increased its policy rate from 1.25% to 1.50% on 13 July but then, as inflationary pressures eased, lowered its rate by 50 bps with two consecutive cuts in Q4 (between November and December 2011), taking the main refinancing rate back to 1.00% (i.e. the level observed between Q2 2009 and Q2 2011). Other Central Banks followed the same pattern. The Danish Central Bank raised its policy rate from 1.00% to 1.25% on 8 July, but made two con-secutive cuts, down to 1.00% on 4 November and to 0.75% on 9 December. The Swedish Central Bank (Riksbank) raised its repo rate on 6 July 2011 to 2.00%. Due to the deteriorating sovereign debt crisis over the autumn, the Riksbank lowered the repo rate in December down to 1.75%.

As a result of these monetary policy actions, in Q3 2011 representative mortgage interest rates recorded some quarterly increases in most markets (ranging from 16 bps in the Netherlands to 42 bps in Portugal) but remained low in historical terms (Table 5A). Most markets recorded increases on a year-on-year basis. For example, in Sweden, in Q3 2011 representative variable interest rates went up by 167 basis points (bps) year-on-year (by 25 bps quarter-on-quarter), i.e. up to 3.90%. On the other hand, fixed in-terest rates have slightly decreased on Q2 2011, i.e. by 59 bps, reaching 4.42%. In Hungary, the average interest rate on new HUF-denominated rose compared to the second half of 2010, staying above 10% in the first three quarters of 2011; since lending in CHF and EUR has been prohibited, the share of HUF-denominated loans out of total new loans in Q3 2011 continued to be close to 100% (Table 5D). In Portugal, representative mort-gage rates on new loans increased compared to Q3 2010 by 151 bps and reached 4.16%. There were few exceptions to this picture, with representa-tive mortgage rates down compared to Q3 2010 by 75 bps in the UK, by 33 bps in Denmark and by 14 bps in Romania.

Contributing National ExpertsBE: Frans MEEL (Union Professionnelle du Crédit) > DK: Kaare CHRISTENSEN (Association of Danish Mortgage Banks) > DE: Thomas HOFER (Verband deutscher Pfandbriefbanken) > ES: Irene PEÑA CUENCA (Asociaciòn Hipotecaria Española) > FR: Jean-Marie GAMBRELLE (Crédit Immobilier de France) > HU: Gyula NAGY (Hungarian Banking Association) > IE: Anthony O’BRIEN (Irish Banking Federation) > IT: Marco MARINO (Associazione Bancaria Italiana) > PL: Agnieszka NIERODKA (Mortgage Credit Foundation), Jacek RYSZEWSKI (BRE Bank SA) > PT: Maria Lúcia BICA, João NEVES (Caixa Economica Montepio Geral) > RO: Stefan DINA (Romanian Banking Association) > SE: Christian NILSSON (Swedish Bankers’ Association) > UK: Caroline PURDEY (Council of Mortgage Lenders)

Note on definitions:Total Outstanding Residential Mortgage Lending: total amount of existing residential loans on lenders’ balance sheets at the end of the period.

Gross Residential Lending: total amount of new loans advanced during the period. It is often dubbed in the text as “new lending”.

Net Residential Lending: new loans advanced during the period minus repayments. It also corresponds to the change in outstanding mortgage loans at the end of the period.



Country Insight: Romania / by Gabriela Folcuţ and Ştefan Dina, Romanian Banking Association

In 2011, after two consecutive years of contraction, Romania’s economy recorded a growth rate of 2.5%; the largest contribution to the increase in Gross Domestic Product came from the industrial sector, external de-mand and agriculture. In Q4 2011, the slowdown of the industry growth rate and the downturn in western economies led to the contraction of the Romanian economy, as real GDP went down by 0.2% in Q4 2011 on a year-on-year basis.

Due to the prolonged uncertainty stemming from the sovereign debt crisis in the euro area, according to the forecast for 2012 real GDP is expected to experience a recession ranging from 1.5% to 2%.

Moreover, the limited contribution from European funds (which did not compensate the drop in net capital flows) imposed an increase in funding from the EU and the IMF. Net grant inflows from the EU amounted to EUR 2.6 billion in 2011. The agreement between the Romanian authorities and EU, IMF and World Bank, as well as the fact that Romania met its inflation target and financial stability criteria, were essential to restore sustainable economic growth and maintain Romania’s rating. In 2011, Romania reached its deficit target, i.e. 4.4% of GDP; for 2012, the deficit target has been set at 3% of GDP.

Last year, the inflation rate was in line with the target set by the National Bank of Romania (NBR), and reached 3.1% in December 2011, therefore within the range established by the Central Bank, i.e. 3% plus or minus one percentage point.

The fact that the annual inflation rate is at its 20-year low allowed the National bank of Romania (NBR) to cut its policy rate from 6.25% to 5.50%, with three consecutive cuts. The current level of minimum reserve re-quirements, which is applicable to credit institutions’ liabilities in national currency and in foreign currency respectively, stands at 15% for the former and at 20% for the latter.

For 2012, the NBR has set the same inflation target as in 2011. Developments in inflation, as well as its deviations from the 3% target, are strongly linked to the international economic environment and the significant volatility of the RON exchange rate. In 2011, the current account recorded a deficit of EUR 5.7 billion, up by 3% compared to 2010.

Last year, Romania’s external debt went up by 6.6% compared to the level ob-served in 2010. In order to avoid the accumulation of payments in periods when international financial markets are particularly under stress, maturities for short-term debts have generally been extended.

Despite tensions in international financial markets and the ongoing pres-sures on net results reported by credit institutions - against the backdrop of the deterioration of their loan portfolio quality - the Romanian bank-ing sector was capable to maintain its flexibility. The measures that were adopted prevented the global crisis from affecting the Romanian banking sector. Other relevant factors were the measures taken by the National Bank of Romania, the quality of its management, the absence of “toxic” operations and the contribution of shareholders who saw great potential in the Romanian market development also in the aftermath of the crisis. The solvency ratio of the banking sector stood at 14.5% at the end of 2011, according to NBR data. The minimum solvency level of credit institutions was set at 8%, but during the prudential supervision process, the NBR has imposed a minimum level of 10%. Parent banking institutions have so far continued to support the credit institutions operating on the Romanian banking market, so that there was no need for bail-outs.

During 2011, corporate lending activity picked up but, nonetheless, growth in lending was rather weak, due to the low demand for loans. Thus in 2011 non-government credit went up by 6.6% (3.3% in real terms) compared to 2010, taking into account the increases by 5.6% in the RON-denominated compo-nent and 7.2% in the foreign-denominated one. In 2011, non-government credit gained momentum particularly due to loans granted to corporations, while the household segment benefited mainly from the “Prima casă” (“First House”’) programme which aims at fostering the purchase or construction of housing units. Since the onset of the crisis, mortgage lending has continued to increase, so that the value of outstanding mortgage loans went from EUR 5.4 billion at end-2008 to EUR 7.8 billion at end-2011.

According to the NBR’s lending survey, household demand for new loans for house purchase marginally went up in Q4 2011, in line with lenders’ expectations (Chart 1).

In Q4 2011, the price of residential housing units decreased for the third con-secutive year. Banks expect this trend to continue in the first half of 2012.

Chart 1 Changes in household loan demand, %

Note: Net percentage – positive values indicate an increase in demand

Source: NBR

Mortgage loans Total consumer loans, of which:

Mortgage-backed consumer loans

Credit cards

100

80

60

40

20

0

-20

-40

-60

-80

-100

Actual values Expected values

2008

Q1

2008

Q1

2008

Q1

2008

Q1

2009

Q1

2009

Q1

2009

Q1

2009

Q1

2010

Q1

2010

Q1

2010

Q1

2010

Q1

2011

Q1

2011

Q1

2011

Q1

2011

Q1

2008

Q3

2008

Q3

2008

Q3

2008

Q3

2009

Q3

2009

Q3

2009

Q3

2009

Q3

2010

Q3

2010

Q3

2010

Q3

2010

Q3

2011

Q3

2011

Q3

2011

Q3

2011

Q3

2012

Q1

2012

Q1

2012

Q1

2012

Q1





Table 1 Total Outstanding Residential Mortgage Lending (Million EUR)

IV 2009 I 2010 II 2010 III 2010 IV 2010 I 2011 II 2011 III 2011

latest y-o-y

change (%)

(Q3 11), EUR values

previous y-o-y

change (%)

(Q2 11), EUR values

latest y-o-y

change (%) (Q3

11), local currency

previous y-o-y

change (%) (Q2

11), local currency

BE 141,780 144,187 146,811 149,750 153,207 155,405 159,035 161,383 7.8 8.3 7.8 8.3

DK 230,138 230,894 232,526 234,023 235,198 234,532 235,275 236,237 0.9 1.2 1.0 1.4

DE 1,146,969 1,142,702 1,143,236 1,148,882 1,152,195 1,151,143 1,155,033 1,160,628 1.0 1.0 1.0 1.0

GR 80,559 81,173 81,430 81,201 80,507 79,823 79,800 79,170 -2.5 -2.0 -2.5 -2.0

FR 737,600 745,000 756,500 773,300 796,600 808,400 825,000 835,900 8.1 9.1 8.1 9.1

ES 678,872 679,106 680,794 678,964 680,100 674,801 674,753 671,040 -1.2 -0.9 -1.2 -0.9

IE 147,947 146,763 144,240 143,279 135,806 134,000 133,069 132,302 -7.7 -7.7 -7.7 -7.7

IT 291,160 298,141 346,277 349,318 352,012 355,636 359,011 360,656 3.2 3.7 3.2 3.7

HU 22,425 22,861 24,831 23,353 24,853 23,513 25,089 25,777 10.4 1.0 7.5 -2.1

NL 613,366 612,801 617,249 619,610 626,488 630,310 638,211 639,152 3.2 3.4 3.2 3.4

PL 51,720 54,569 62,099 62,781 67,669 68,682 73,005 75,454 20.2 17.6 24.5 15.9

PT 110,685 111,835 113,197 114,019 114,515 115,426 115,198 114,661 0.6 1.8 0.6 1.8

RO 5,650 5,978 6,588 6,492 6,680 6,578 7,151 7,387 13.8 8.5 13.9 7.3

SE 236,167 249,997 263,878 274,230 283,666 298,828 297,844 296,789 8.2 12.9 5.5 5.7

UK 1,372,861 1,393,827 1,457,088 1,490,928 1,442,407 1,451,183 1,405,197 1,416,849 -5.0 -3.6 0.1 0.2

Note: non seasonally-adjusted data. Source: European Mortgage FederationQuarterly figures for non-euro area countries are converted using 3-m average of EUR exchange rate as published in the ECB Monthly Bulletin. Please note that the Swedish historical data has been revised due to a change in the statistical sources.Please note the Polish data for Q1 2010 should not be compared with the corresponding figure of the previous year due to a change in methodology.Please note that the Central Bank of Ireland issued revised time-series in June 2010 to account for revaluations and reclassifications. Q4 2010 figure includes change in methodology from the Central Bank of Ireland moving to figures reported net of impairment provisions. The Q4 2010 figures are also affected by the exit of a credit institution from the market.

Table 2 Gross Residential Mortgage Lending (Million EUR)

III 2009 IV 2009 I 2010 II 2010 III 2010 IV 2010 I 2011 II 2011 III 2011

latest y-o-y

change (%)

(Q3 11), EUR

values

previous y-o-y

change (%)

(Q2 11), EUR

values

latest y-o-y

change (%) (Q3

11), local currency

previous y-o-y

change (%) (Q2

11), local currency

BE 6,143 6,381 5,535 6,462 6,775 7,996 6,819 6,965 6,355 -6.2 7.8 -6.2 7.8

DK 11,874 13,591 11,764 9,570 13,114 13,012 6,197 5,806 6,416 -51.1 -39.3 -51.1 -39.2

DE 21,300 22,300 18,900 21,400 23,700 26,500 23,500 23,200 24,800 4.6 8.4 4.6 8.4

FR 29,640 33,070 29,220 32,478 40,125 45,246 33,569 36,060 33,238 -17.2 11.0 -17.2 11.0

HU 497 401 364 388 333 313 268 285 257 -22.6 -26.5 -24.6 -28.7

ES 17,143 17,088 15,395 20,336 9,168 16,087 8,089 8,503 6,986 -23.8 -58.2 -23.8 -58.2

IE 2,145 1,760 1,220 1,305 1,239 982 577 624 623 -49.7 -52.2 -49.7 -52.2

IT 13,663 18,740 16,046 18,970 14,313 17,257 15,354 15,752 11,647 -18.6 -17.0 -18.6 -17.0

NL 17,037 18,431 13,916 16,581 17,423 19,607 n/a n/a n/a n/a n/a n/a n/a

PT 2,508 2,558 2,476 2,690 2,639 2,300 1,734 1,409 965 -63.4 -47.6 -63.4 -47.6

SE 9,600 11,046 9,568 12,130 11,068 12,363 9,408 10,530 9,076 -18.0 -13.2 -20.0 -18.7

UK 44,829 43,030 33,472 40,494 45,525 39,136 35,191 37,790 44,749 -1.7 -6.7 3.6 -3.1

Note: non seasonally-adjusted data. Source: European Mortgage FederationQuarterly figures for non-euro area countries are converted using 3-m average of EUR exchange rate as published in the ECB Monthly Bulletin.German and Hungarian series have been revised.

Note: non seasonally-adjusted data. Source: European Mortgage Federation

Quarterly figures for non-euro area countries are converted using 3-m average of EUR exchange rate as published in the ECB Monthly Bulletin.Please note that the Swedish historical data has been revised due to a change in the statistical sources. Please note the Polish data for Q1 2010 should not be compared with the corresponding figure of the previous year due to a change in methodology.Please note that the Central Bank of Ireland issued revised time-series in June 2010 to account for revaluations and reclassifications. The Spanish data for Q3 2009 should be read as EUR 173,000.

Note: it is worth mentioning that house prices are calculated according to different methodologies at the national level. Source: European Mortgage Federation

Further information below:Belgium: Stadim average price of existing dwellings Germany: owner-occupied single family houses, vdp indexDenmark: all dwellings; please note that the series has been revisedFrance: INSEE index (second-hand dwellings only)Greece: urban areas house price index (other than Athens)Hungary: FHB house price index (residential properties)

Ireland: new series of House Price Index of the Central Statistics Office Netherlands: CBS (Statistics Netherlands) house price index of single-family dwellingsPortugal: Confidencial Imobiliário house price indexSpain: new house price index, first released by the Ministry of Housing on Q1 2005Sweden: index of prices of one-dwelling and two-dwelling buildings UK: Department of Communities and Local Government Index (all dwellings)

Table 3 Net Residential Mortgage Lending (Million EUR)

III 2009 IV 2009 I 2010 II 2010 III 2010 IV 2010 I 2011 II 2011 III 2011

latest y-o-y

change (%)

(Q3 11), EUR values

previous y-o-y

change (%)

(Q2 11), EUR values

latest y-o-y

change (%) (Q3

11), local currency

previous y-o-y

change (%) (Q2

11), local currency

BE 3,196 824 2,407 2,624 2,939 3,456 2,198 3,630 2,348 -20.1 38.3 -20.1 38.3

DK 2,180 1,839 1,371 1,532 1,799 1,167 912 818 1,060 -41.0 -46.6 -41.0 -46.5

DE 3,251 2,604 -4,707 474 5,068 4,181 -1,780 3,999 5,375 6.1 n/a 6.1 n/a

GR 826 999 614 257 -229 -694 -684 -23 -630 175.1 -108.9 175.1 -108.9

FR 10,500 12,600 7,400 11,500 16,800 23,300 11,800 16,600 10,900 -35.1 44.3 -35.1 44.3

ES 0,173 1,022 331 1,682 -1,830 1,244 -5,407 -48 -3,713 102.9 -102.8 -60.1 76.5

IE -444 -404 -1,184 -2,523 -961 -7,473 -643 -603 -659 31.4 76.1 31.4 76.1

IT 3,036 6,720 6,981 48,136 3,041 2,694 3,624 3,375 1,650 -45.7 -93.0 -45.7 -93.0

NL 2,176 3,541 -681 4,477 2,361 6,878 3,822 7,901 941 -60.1 76.5 -60.1 76.5

HU 15 -51 -60 -85 4 -79 23 -95 -173 n/a 11.5 n/a 8.0

PL 112 1,287 473 7,941 572 4,202 660 4,559 -1,480 -358.7 -42.6 -367.9 -43.4

PT 1,185 2,201 1,150 1,362 822 496 911 -228 -537 -165.3 -116.7 -165.3 -116.7

SE 4,523 5,106 4,247 5,668 3,318 5,022 3,411 4,025 3,172 -4.4 -29.0 -6.8 -33.5

UK 5,313 4,598 597 2,987 4,142 1,936 709 2,545 n/a n/a -14.8 n/a -11.5

Table 4 House Price Indices, nominal year-on-year growth rates (%)II 2008 III 2008 IV 2008 I 2009 II 2009 III 2009 IV 2009 I 2010 II 2010 III 2010 IV 2010 I 2011 II 2011 III 2011

BE 6.8 4.0 3.3 -0.5 -1.7 -1.4 2.0 5.0 5.8 5.9 4.4 4.8 3.6 4.2

DE 4.7 4.3 4.9 1.3 -1.8 -2.0 -2.5 -2.4 1.1 2.1 2.0 2.9 1.3 1.7

DK -2.4 -4.5 -9.8 -14.2 -12.8 -10.5 -2.8 2.7 3.5 4.0 1.9 -0.1 -2.6 -6.6

GR 1.5 5.6 3.3 -0.2 3.0 -5.6 -4.5 -2.2 -9.5 -4.2 -7.2 -3.8 -0.2 -3.1

ES 2.0 0.3 -3.2 -6.8 -8.3 -8.0 -6.3 -4.7 -3.7 -3.7 -3.5 -4.7 -5.2 -5.6

FR 2.8 0.6 -3.9 -7.3 -9.0 -7.8 -4.2 1.2 5.2 6.6 7.6 6.9 7.0 6.3

HU 0.6 1.3 -1.7 -4.8 -0.6 -8.3 -11.3 -7.1 -9.6 -3.3 0.1 -1.6 -2.2 -1.5

IE -5.2 -8.0 -12.4 -16.6 -19.6 -20.5 -18.6 -15.1 -12.4 -11.1 -10.5 -11.9 -12.9 -14.3

NL 2.9 2.5 1.4 -1.3 -3.6 -5.4 -5.5 -3.8 -1.3 -0.7 -0.8 -1.0 -1.8 -2.9

PL 10.3 8.4 9.3 6.7 0.6 -1.8 -2.0 0.9 4.9 5.6 4.2 0.2 0.7 -0.9

PT 4.0 4.8 4.7 2.7 0.4 -0.8 -0.6 1.3 1.6 2.8 1.6 0.6 0.3 -0.8

RO n/a n/a n/a n/a n/a n/a n/a -7.1 -4.1 -6.5 -13.4 -11.9 -12.0 -16.0

SE 4.9 1.8 -2.0 -2.3 0.2 1.4 7.1 10.7 8.9 6.7 5.2 3.4 1.7 0.9

UK 2.7 -3.7 -8.7 -12.4 -12.3 -6.1 0.3 7.7 10.1 7.5 3.9 0.2 -1.6 -1.4





Table 5A Representative Mortgage Rates (%)

II 2008 III 2008 IV 2008 I 2009 II 2009 III 2009 IV 2009 I 2010 II 2010 III 2010 IV 2010 I 2011 II 2011 III 2011

BE 4.85 5.26 4.99 4.52 4.49 4.62 4.43 4.32 4.03 3.90 3.82 3.98 4.12 3.93

DK 5.36 5.03 4.64 3.17 2.31 1.64 1.74 1.25 1.10 1.36 1.40 1.60 1.71 1.03

DE 5.06 5.17 4.83 4.40 4.39 4.37 4.29 4.09 3.89 3.65 3.70 4.10 4.19 3.80

GR 5.40 4.18 3.54 4.18 3.54 3.24 3.12 3.11 3.31 3.58 3.68 3.96 4.25 4.49

FR 4.70 5.00 5.20 4.80 4.40 4.40 4.70 4.40 4.40 3.90 3.70 3.70 3.90 4.00

ES 5.39 5.93 5.89 4.22 3.14 2.78 2.52 2.44 2.33 2.44 2.54 2.84 3.20 3.41

IE 5.15 5.54 4.91 3.64 2.92 2.82 2.79 2.90 3.19 3.23 3.23 3.49 3.44 3.58

IT 5.54 5.52 4.91 3.66 2.85 2.33 2.24 2.22 2.24 2.39 2.52 2.61 2.85 3.14

HU 11.45 11.71 13.34 13.22 14.16 13.56 11.65 10.63 9.79 9.24 9.44 10.10 10.37 10.48

NL 5.50 5.70 5.71 4.21 3.63 3.87 3.88 3.78 3.65 3.62 3.55 3.67 3.88 4.04

PL 7.80 8.40 8.70 7.30 7.20 7.30 7.10 6.80 6.70 6.30 6.10 6.40 6.60 6.80

PT 5.42 5.69 5.50 3.02 2.54 2.29 2.22 2.20 2.25 2.65 2.96 3.18 3.74 4.16

RO 5.93 5.90 6.76 7.74 7.68 5.05 4.97 4.76 4.86 5.80 5.18 5.35 5.96 5.66

SE 5.34 6.07 3.64 2.16 1.94 1.60 1.44 1.41 1.71 2.23 2.78 3.48 3.65 3.90

UK 6.31 6.13 5.23 4.23 4.15 4.44 4.16 3.92 3.76 3.77 3.57 3.69 3.51 3.02

Short-term initial fixed period rate, from 1 to 5 years maturity (%)


DE 5.24 5.50 4.84 4.12 3.88 3.81 3.76 3.56 3.36 3.25 3.31 3.70 3.82 3.52

GR 4.95 4.66 5.27 5.44 5.03 4.67 4.65 4.69 4.74 4.27 3.96 3.69 3.99 4.28

ES 5.74 6.18 6.06 4.71 3.94 3.46 3.19 3.04 2.78 2.83 2.95 3.28 3.67 3.99

IE 5.34 5.72 4.80 4.14 3.65 3.63 3.57 3.51 3.89 4.13 4.17 4.23 4.49 4.86

HU 13.10 13.43 14.25 15.49 15.52 14.17 12.98 12.58 12.11 11.47 11.18 11.33 12.00 10.45

IT 5.65 5.93 4.98 4.14 4.00 3.61 3.35 3.12 2.82 3.14 3.48 3.81 3.95 3.58

NL 5.07 5.41 5.51 5.44 5.35 5.41 5.28 5.19 4.94 4.73 4.57 4.71 5.07 5.09

SE 5.94 5.97 4.22 3.41 3.49 3.14 3.08 3.25 3.18 3.26 3.74 4.35 4.30 3.66

Variable rate and initial fixed period rate up to 1 year (%)


BE 5.58 5.98 4.87 3.74 3.21 2.97 2.92 2.91 2.82 2.87 3.12 3.34 3.64 3.77

DE 6.05 6.24 5.38 4.19 3.73 3.38 3.36 3.04 3.19 3.28 3.38 3.49 3.78 3.77

GR 5.40 4.18 3.54 4.18 3.54 3.24 3.12 3.11 3.31 3.58 3.68 3.96 4.25 4.49

ES 5.39 5.93 5.89 4.22 3.14 2.78 2.52 2.44 2.33 2.44 2.54 2.84 3.20 3.41

IE 5.23 5.58 4.33 3.23 2.68 2.62 2.61 2.77 2.83 2.96 3.01 3.09 3.18 3.50

HU 11.45 11.71 13.34 13.22 14.16 13.56 11.65 10.63 9.79 9.24 9.44 10.10 10.37 10.48

IT 5.54 5.52 4.91 3.66 2.85 2.33 2.24 2.22 2.24 2.39 2.52 2.61 2.85 3.14

NL 5.50 5.70 5.71 4.21 3.63 3.87 3.88 3.78 3.65 3.62 3.55 3.67 3.88 4.04

RO 5.93 5.90 6.76 7.74 7.68 5.05 4.97 4.76 4.86 5.80 5.18 5.35 5.96 5.66

SE 5.34 6.07 3.64 2.16 1.94 1.60 1.44 1.41 1.71 2.23 2.78 3.48 3.65 3.90

Source: European Mortgage FederationNote: UK series has been revised

Table 5B Mortgage Interest Rates

Long-term initial fixed period rate, 10-year or more maturity (%)


BE 4.85 5.26 4.99 4.52 4.49 4.62 4.43 4.32 4.03 3.90 3.82 3.98 4.12 3.93

DK 7.12 7.10 6.58 5.84 5.48 5.21 5.19 4.68 4.35 4.20 4.70 5.10 5.12 4.27

DE 5.09 5.21 4.73 4.49 4.53 4.45 4.38 4.30 3.90 3.64 3.77 4.26 4.32 3.80

GR 4.77 4.96 4.87 4.79 4.72 4.76 4.65 4.66 4.35 4.61 1.56 n/a n/a n/a

IT 5.99 5.93 5.21 5.01 5.18 5.02 4.92 4.74 4.42 4.09 4.30 4.74 4.82 4.64

NL 5.26 5.46 5.60 5.46 5.37 5.31 5.25 5.22 5.17 5.01 4.88 4.93 5.17 5.18

RO 5.90 n/a n/a 10.69 10.59 8.57 6.92 5.39 4.87 4.89 5.06 5.06 5.74 5.81

Medium-term initial fixed period rate, from 5 to 10 years maturity (%)

DE 5.06 5.17 4.83 4.40 4.39 4.37 4.29 4.09 3.89 3.65 3.70 4.10 4.19 3.80

GR 4.95 5.16 5.79 5.61 4.75 4.67 4.34 3.66 4.25 4.88 5.39 5.51 5.55 5.54

HU 18.60 21.43 21.33 22.61 20.99 20.35 16.87 19.38 21.48 17.66 15.64 12.65 9.89 n/a

IT 5.77 5.76 5.08 4.53 4.38 4.24 4.05 4.07 3.97 3.66 4.01 4.34 4.36 4.08

ES 7.69 8.09 7.93 7.62 7.53 7.68 7.41 7.71 7.64 8.00 6.97 6.62 7.22 8.06

NL 5.26 5.46 5.60 5.46 5.37 5.31 5.25 5.22 5.17 5.01 4.88 4.93 5.17 5.18

SE 5.91 5.83 4.87 4.84 5.26 4.21 4.55 4.78 4.22 4.05 4.83 5.20 5.01 4.42






Table 5C Mortgage Markets’ Breakdown by Interest Rate Type (%) - Outstanding Loans

III 2008 IV 2008 I 2009 II 2009 III 2009 IV 2009 I 2010 II 2010 III 2010 IV 2010 I 2011 II 2011 III 2011

Denmark

fixed n/a 43.5 41.9 38.7 36.2 34.0 31.0 30.0 29.0 28.5 28.1 28.6 28.3

variable rate with interest

rate capn/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 11.1 11.0

variable n/a 56.5 58.1 61.3 63.8 66.0 69.0 70.0 71.0 71.5 71.9 60.3 60.7

Hungary

HUF denominated

44.8 39.4 35.6 38.4 38.2 37.6 37.0 34.0 35.5 34.7 37.0 36.1 34.5

EUR denominated

0.9 1.4 2.5 3.4 4.4 5.3 5.8 6.0 6.1 5.9 5.9 5.7 6.0

CHF denominated

52.9 57.5 59.7 56.0 55.3 54.9 54.6 57.0 55.2 55.8 53.3 55.9 55.0

Other FX denominated

1.4 1.7 2.2 2.2 2.1 2.2 2.5 3.0 3.2 3.6 3.7 2.4 4.6

Ireland

fixed 1-3 years 13.9 11.6 9.0 7.9 7.1 6.3 6.3 7.1 6.8 7.3 7.9 7.7 7.3

fixed 3-5 years 6.1 6.0 5.6 5.3 5.4 5.2 5.2 5.8 6.1 4.9 5.1 4.9 4.6

fixed >5 years 2.3 2.4 2.9 2.7 2.3 2.2 2.8 1.5 1.4 1.3 1.3 1.3 1.2

variable and initial fixed up

to 1 year77.8 80.0 82.5 84.1 85.2 86.3 85.7 85.6 85.7 86.5 84.3 84.1 84.3

Sweden

initial fixed >1 years

55.8 54.7 52.1 48.9 46.1 42.7 41.6 40.8 41.7 44.3 47.8 49.6 50.8

variable and fixed up to

1 year44.2 45.3 47.9 51.1 53.9 57.3 58.4 59.2 58.3 55.7 52.2 50.4 49.2

UK

initial fixed 50.8 48.1 44.4 42.5 40.1 37.6 35.6 33.8 32.4 31.5 30.7 29.6 28.6

variable 49.2 51.9 55.6 57.5 59.9 62.4 64.4 66.2 67.6 68.5 69.3 70.4 71.4

Note: Swedish series has been revised Source: European Mortgage FederationHungarian series has been revised. Please note that only housing loans are included (not home equity loans)For Ireland, the variable rate and initial fixed up to 1 year segment includes tracker mortgages, which account for 53.5% of all on-balance sheet loans for house purchase (at end-March 2011). A tracker mortgage is fixed at a margin (e.g. +1%) to a benchmark rate, normally the ECB main refinancing rate, resulting in immediate passthrough of ECB interest rate rises or cuts.*Please note that this is a fixed rate; however, the rate can float until a threshold

Table 5D Mortgage Markets’ Breakdown by Interest Rate Type (%) - New Loans


Belgium

fixed interest rate

82.5 82.7 70.3 52.3 38.3 32.8 28.8 40.7 51.8 71.7 75.5 75.1 70.8

initial fixed rate 15.0 13.6 16.1 21.3 20.5 19.7 19.7 19.3 18.7 15.8 11.8 14.3 11.9variable rate (= initial fix <= 1 year)

2.4 3.7 13.6 26.4 41.2 47.6 51.5 39.9 29.5 12.5 12.7 10.7 17.4

Denmark*fixed 43.9 27.0 17.0 8.0 16.1 15.2 12.0 20.0 47.8 38.1 25.9 31.2 31.0

variable rate with interest

rate capn/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 6.8 5.6

variable 56.1 73.0 83.0 92.0 83.9 84.8 88.0 79.9 52.2 61.9 74.1 62.1 63.4

Germanyinitial fixed 1-5 years

15.0 17.0 20.0 19.0 18.0 18.0 17.0 16.0 15.0 15.0 16.0 15.0 15.0

initial fixed 5-10 years

39.0 38.0 38.0 41.0 41.0 40.0 38.0 37.0 38.0 39.0 39.0 39.0 38.0


31.0 29.0 25.0 24.0 24.0 25.0 26.0 30.0 32.0 32.0 28.0 30.0 31.0

variable and initial fixed up to 1 year

15.0 16.0 17.0 16.0 17.0 17.0 19.0 17.0 15.0 14.0 17.0 16.0 16.0

Spainfixed 1.5 1.3 1.0 0.8 1.0 0.8 0.9 1.2 1.1 1.2 1.8 0.6 0.5

initial fixed 8.2 8.1 11.7 9.4 10.3 9.5 12.3 11.6 14.3 14.2 18.6 18.7 16.3variable 90.3 90.6 87.4 89.8 88.7 89.7 86.8 87.2 84.6 84.5 79.6 80.7 83.2

Italyvariable n/a 21.9 n/a 34.5 n/a 66.5 n/a n/a n/a n/a n/a n/a n/afixed to maturity

n/a 75.4 n/a 64.2 n/a 32.5 n/a n/a n/a n/a n/a n/a n/a

Irelandvariable and initial fixed up to 1 year

78.2 90.6 88.4 61.0 83.7 83.9 67.7 75.8 75.2 76.8 67.7 85.8 87.8

initial fix >1 year 21.8 9.4 11.6 39.0 16.3 16.1 32.3 24.2 24.8 23.2 32.3 14.2 12.2

Hungaryvariable or

initial fix up to 1 year (HUF

denom)

4.4 5.8 9.9 15.4 14.9 13.5 25.0 65.4 81.1 84.6 81.1 75.2 69.3

initial fix >1 = 5 years (HUF denom)

5.4 8.1 12.2 23.8 22.3 8.3 5.6 7.2 9.8 8.8 9.2 11.6 11.4

initial fix > 5 = 10 years (HUF denom)

1.4 1.4 2.7 2.3 2.3 1.8 2.3 3.0 3.8 3.3 5.3 9.1 13.0

initial fix > 10 years

(HUF denom)0.2 0.2 0.4 0.5 0.4 0.5 0.4 0.1 0.3 0.4 0.5 1.3 3.9

variable or initial fix up to 1 year (EUR denom)

0.3 10.6 46.6 44.2 47.3 58.9 49.7 21.0 4.6 1.2 1.4 0.5 0.2

variable or initial fix 1 year (CHF denom)

88.4 74.0 28.2 13.9 12.8 17.0 17.0 3.1 0.5 1.6 2.5 2.2 2.1






Polandfixed n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

variable n/a 100.0 n/a n/a n/a 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Portugalfixed 5.2 6.6 4.7 1.6 0.9 0.7 0.7 0.6 1.0 0.9 0.8 0.9 1.5

variable 94.8 93.4 95.3 98.4 99.1 99.3 99.3 99.4 99.0 99.1 99.2 99.1 98.5

Romania

fixed 0.9 0.9 9.3 4.6 1.1 1.0 1.6 3.0 7.4 2.7 4.3 2.0 2.2

initial fixed 55.5 71.8 39.1 12.3 38.9 19.9 19.7 17.9 16.8 14.8 17.6 14.9 21.0

variable 43.6 27.3 51.6 83.1 60.0 79.0 78.7 79.1 75.8 82.5 78.1 83.1 76.9

Swedenvariable and initial fix for <= 1 year

68.9 77.2 85.3 83.3 84.9 83.5 77.7 73.9 63.9 60.1 52.6 55.0 54.4

initial fixed >1<=5 years

24.6 19.5 11.4 13.5 12.6 13.9 18.0 20.1 26.0 32.4 42.6 40.6 39.5


6.4 3.2 3.2 3.1 2.6 2.7 4.3 6.0 10.1 7.5 4.7 4.4 6.1

UKinitial fixed 60.1 53.6 57.1 74.2 76.4 59.0 46.0 46.2 51.1 52.0 59.9 62.9 60.0

variable 39.7 46.1 42.6 25.6 23.3 40.9 53.7 53.8 48.8 47.9 40.1 37.0 39.8

Notes:

In Denmark the majority of loans are initial fixed with maturities between 1 and 5 years, and are defined as “variable rate loans”. However in this context “initial fixed rate” is more appropriate.Hungarian and UK series have been revised.According to the definition from the Central Bank of Portugal, new loans with initial fixed rate include floating rate loans.Please note that in Hungary foreign-denominated mortgage lending was suspended in 2010. The values above 0 in EUR and CHF lending are the result of restructuring and remortgaging



Table 5E Description of Rates

The representative mortgage interest rates are an average of, or specific mortgage rates for, 1st ranking mortgages, involving no prior savings, with no discounts included, gross of tax relief, net of other bank costs. Other specifications are given below:

BE Long term initial fixed period rate, 10 years or more maturity.

DK Adjustable mortgage rate (variable and initial fixed up to 2 years)

DE Renegotiable rate with a fixed period of 5 to 10 years.

EE It is the weighted average of the annual interest rate on new EUR denominated housing loans granted to individuals.

GR Reviewable rate after a fixed term of 1 year.

ESVariable rate - Effective average interest rate not including costs. The interest rate usually floats every 6 or 12 months, according to an official reference rate for mortgage loans secured on residential property (non-subsidized housing). This shoud be the same rate as used in the Hypostat and should relate to broadly the same product over time.

FRFixed rate - The rate is fixed for the total maturity of the loan. The rate communicated is the fixed average rate of secured loans “PAS” with a maturity between 12 and 15 years.

IEThis is based on the weighted average of the annual interest rate on all new EUR-denominated housing loans granted to households in the period.

ITUntil the 3rd quarter of 2006, the fixed rate was used. From the 4th quarter of 2006 onwards, the variable interest rate on a loan of EUR 100,000 with a maturity of 20 years has been used.

LV Variable rate (≤1).The average interest rate on new EUR denominated loans.

LT Variable rate (≤1).The average interest rate on new EUR denominated loans.

HUVariable interest rate on HUF housing loans. All interest rates are average APR for housing loans at the end of the period (home equity interest rates are not included). Since Spring 2010, foreign-denominated mortgage lending has been suspended by the government.

PL The indicator is a weighted average of variable mortgage rates denominated in PLN for all residential credits on outstanding amounts.

PT Variable interest rate up to 1 year indexed to Euribor (≤1).

SE Variable interest rate up to 1 year (≤1).

UKThe average mortgage rate charged on all regulated mortgage contracts except lifetime mortgages newly advanced in the period (Source: Council of Mortgage Lenders, Regulated Mortgage Survey).




Table 6 Macroeconomic Indicators

Real GDP* Unemployment rate** HICP inflation Policy interest rate

Latest quarter-on quarter growth rate (%),

Q3 11

Previous quarter-on-quarter growth rate (%),

Q2 11

Q3 2011 (%)

Q2 2011 (%)

Q3 2011 (%)

Q2 2011 (%)

Q3 2011 (%)

Q2 2011 (%)

BE -0.1 0.4 7.4 7.1 3.4 3.4 1.50 1.25

DK -0.5 1.0 7.5 7.5 2.4 2.9 1.25 1.00

DE 0.5 0.3 5.8 6.0 2.9 2.4 1.50 1.25

FR 0.3 -0.1 9.6 9.6 2.4 2.3 1.50 1.25

GR n/a n/a 18.4 16.7 2.9 3.1 1.50 1.25

HU 0.5 0.2 10.9 10.9 3.7 3.5 6.00 6.00

IE -1.9 1.4 14.7 14.3 1.3 1.1 1.50 1.25

IT -0.2 0.3 8.1 8.1 3.6 3.0 1.50 1.25

NL -0.2 0.2 4.4 4.2 3.0 2.5 1.50 1.25

PL 1.0 1.2 9.7 9.6 3.5 3.7 4.50 4.50

PT -0.6 -0.2 12.7 12.6 3.5 3.3 1.50 1.25

RO 1.8 0.9 7.5 7.4 3.5 8.0 6.25 6.25

ES 0.0 0.2 22.1 21.0 3.0 3.0 1.50 1.25

SE 1.6 1.0 7.3 7.5 1.5 1.5 2.00 1.75

UK 0.6 0.0 8.3 7.9 5.2 4.2 0.50 0.50

euro area 0.3 0.2 10.2 10.0 3.0 2.7 1.50 1.25

EU27 0.2 0.2 9.7 9.5 3.3 3.1 n/a n/a

Note: Sources: Eurostat, ECB, Central Banks

* GDP at constant prices, seasonally-adjusted**EU-harmonised unemployment rate, seasonally-adjusted

2011 EMF Quarterly Statistics

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Study

EMF

emf q3 2011

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