Annual Report 2010 - Muenchener Hypothekenbank eG

16 | 17 münchener hypothekenbank eg | annUaL report 2010 management report rental prices. on average, rents rose more quickly than purchase prices nationwide. Last year’s recovery of residential housing construction was accompanied by a notable increase in the number of building permits issued. Experts estimate that about 190,000 permits were issued for new housing. This corresponds to an increase of nearly 7 percent. however, the increase barely covered the minimum need for new residential housing, which meant that the housing situation remained tight in metropolitan areas. interest rates for property financing fell to historic lows in 2010. Even fixed interest rates for up to 30 years were occasionally available at effective annual interest rates of around 4 percent leading to demand for these loans. This trend was further rein- forced by recommendations made by consumer associations to potential homeowners that securing a low fixed interest rate over the entire term of a loan was an important aspect of solid financing. furthermore, customers highly valued flexibility, in addition to secured interest rates, when financing property. financing solu- tions were increasingly expected to adapt to the changed living conditions and financial situations. for this reason, unscheduled repayments and repayment rate modification options became more common in agreements. during the second half of the year, interest rates once again rose significantly based on interest rate shifts seen in the cap- ital markets. Between September and december, interest rates for ten-year loans rose by up to 0.7 percentage points. despite this relatively rapid increase, interest rates remained low at the end of 2010 compared to long-term average rates. The high demand and good interest levels also strengthened new business for credit institutions in the private property finance market. in particular, this benefited the volksbanken Raiffeisenbanken Cooperative financial Network (genossen- schaftliche finanzgruppe volksbanken Raiffeisenbanken), which was able to expand its market share. This was largely due to increased customer focus on personal consultation, proximity and security. residentiaL property markets – internationaL The economic and financial market crisis also left its mark on the international residential property markets. Residential property purchases declined significantly. As a result, there was a clear trend toward rental properties in many countries. france, Austria and Switzerland were among the countries in Europe where residential property markets remained relatively stable. france benefited from a combination of economic pol- icy measures and the provision of long-term outside capital at fixed interest rates, despite relatively unsatisfactory job-mar- ket data. Although demand for new owner-occupied property declined, the simultaneous drop in offerings and the very low inflation rate did, however, prevent these factors from having a negative effect on price development. At the same time, demand for rental housing increased. in Switzerland, the substantial increase in residential property prices seen over the past few years slowed. Prices for multi- family homes rose slightly, while falling marginally for single- family homes. The pace of price increases even slowed in the cantons of Zug, Waadt and geneva, where the price of hous- ing had risen substantially in the past. “Demand was very high for property bought for per- sonal use as well as a secure capital investment. prices in the major metropolitan areas rose in particular.” “the cooperative financial network was able to fur- ther expand its market share. this was largely due to increased customer focus on personal consultation, proximity and security.”