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ePaper created 2013-04-15, 17:20:51 | version 1.25.7
Management report – münchener Hypothekenbank eg l annual Report 201214 countries turned to the mostly more attractive refinancing pos- sibilities offered by the ECB due to high funding spreads. Very strong investor interest was noted across the board, which in turn led to continually narrowing spreads for issues. This improvement in the market meant that the ECB only partially realised its approved covered bond purchase programme and actually completely stopped it during the course of the year. The Pfandbrief continued to benefit from the low volume of new issues, as well as from Germany’s very good credit standing and the good quality of the cover pools. Total sales of Pfandbriefe declined by about € 16 billion to € 56.6 billion. The exit of many issuers from public sector financing led to a further contraction in the Public Pfandbrief’s share of market, while the volume of newly issued Mortgage Pfandbriefe remained generally stable. The development of long-term interest rates was mainly influ- enced by the weaker economic outlook, high availability of liquidity and declining short-term interest rates. These factors, as well as fears surrounding the continued existence of the European currency union, led to falling yields for 10-year Bunds during the first half of the year. At mid-year the yield had fallen to a historic low of less than 1.2 percent. Yields stabilised at a low level over the remaining course of the year. Property and property financing markets Residential property – Germany Demand for houses and apartments rose in many places, partic- ularly in major metropolitan areas and in numerous university towns where prices for buying or renting property once again rose significantly. Some of Germany’s major metropolitan areas saw local housing prices rise by over 10 percent within a year. “Property prices rose notably due to heavy demand.” As a result of this situation, the general public, the media, and policymakers focused their attention more strongly on the property markets. This in turn led to growing discussions sur- Source: Association of German Pfandbrief Banks 2004 2005 2006 2007 2008 2009 2010 2011 20122003 Owner-occupied residential property houses condominiums Development of property prices in germany (year 2003 = 100) 118 116 114 112 110 108 106 104 102 100 98