Considerable shrinkage in mortgage market in the first quarter of 2019

By | Banking, Hypotheekupdate, News

The amount of mortgages issued fell sharply in the first three months of 2019. According to consultancy firm IG&H’s mortgage update, it was the number of first-time and existing homeowners in particular that dropped significantly. “Currently, we also observe a considerable decrease in the number of mortgage refinancers. In 2018, this group was still responsible for the growth of the mortgage market,” says IG&H’s Joppe Smit.

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The average mortgage loan was €316,000 in the first quarter of this year – a 5.2-percent increase compared to the same period last year. This growth is mainly due to the sharp rise in mortgage loans for mortgage refinancers. In the purchasing market, the average mortgage loan remains virtually constant.

Mortgage revenue is shrinking

In the first quarter of 2019, the total mortgage revenue was nearly €22 billion – a 9.6-percent shrinkage compared to the first quarter of 2018, and the largest since 2013. Compared to Q4 2018, the decrease was as high as 22.8%. In previous years, the usual decrease in Q1 was partly due to a reduction in the maximum loan-to-value on the annual limit and the additional growth in the fourth quarter, which compensated for this.

This year, neither of these developments is perceived. “The sharp decline we currently observe is truly a deviation from the trend after years of growth,” says Smit. “Both the relatively limited housing supply and the difficult position of first-time homeowners are to blame for it.”

Growth in large banks’ share

The banks’ share increased by 2 percentage points to 64.1 percent. This growth mainly comes from the three large banks, which saw their combined market share rise by 1.3 percentage points to 51.3 percent. Investment funds enabling non-bank lending also saw their share grow – by 1 percentage point to 18.3 percent.