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ePaper created 2015-04-21, 16:47:46 | version 1.37.0
16 münchener Hypothekenbank eg | annual report 2014management report The residential property market in Great Britain experienced a notable recovery as the favourable economy and declining un- employment supported demand for residential property. Further- more, demand was also reinforced by last year’s cut in taxes for transactions below 925,000 British pounds. Demand exceeded supply in major metropolitan areas. According to estimates, there is a shortage of about 250,000 flats. London remained the top city as prices for private housing there rose by up to 18 percent. Prices across the UK climbed by 7 percent in 2014. However, during the course of the year initial indications that the pace of price increases was slowing were starting to be seen, especially in London. This was due to the fact that housing prices had risen substantially faster than wages, and that thus far high- er employment rates have barely led to higher pay. Furthermore, starting in April 2014 borrowers have had to meet stricter mini- mum lending criteria, which have already dampened prices. The French market for apartments and houses declined further in 2014. Measures taken by the government to encourage invest- ments in construction of new housing and regulate rental prices have not yet shown significant success. This is reflected by the 12 percent decline in house building starts compared to the pre- vious year’s figure (status November 2014). Prices for existing houses fell nationwide by 1 percent and even by 2 percent in Paris. The number of transactions rose but remained signifi- cantly below the long-term average. Only rents posted a slight increase. “The first signs of a slow recovery were seen in the European residential property markets.” The Dutch housing market began to recover in 2014 thanks to favourable macroeconomic influences and the liberalisation of the regulated housing market. The main objective here was to allocate existing housing on a more needs-oriented basis. Other noteworthy regulatory measures were: the introduction of a cap on financing of 103 percent based on the fair market value of the property; retention of the 2 percent real estate transfer tax; reduction of the amount of interest paid for loans that is de- ductible for tax purposes, as well as the introduction of a law permitting a one-time, tax-free gift of property that may be given within a family for housing purposes. House prices increased again in the second quarter for the first time in the Netherlands. They rose by about 2 percent over the entire year in the Dutch residential property investment market. The volume of investments made in 2014 was the highest since 2008 and amounted to € 1.8 billion in the first three quarters, which was more than 200 percent higher than the same year-ago figure. Demand was particularly strong for property in Amster- dam and for nationwide portfolios of residential property. Warnings about prices overheating in the Swiss residential prop- erty market have been regularly heard in recent years. Last year the SNB noted for the first time that the build-up of imbalances in both the property market and the property financing market had slowed. Although the SNB views this development as favour- able, it does not yet, however, see it as heralding a reversal of the trend as interest rates in Switzerland remain very low. Prices for residential property increased in 2014 by 2.4 percent, which was below the long-term average of 2.8 percent. Price rises al- most came to a halt in the fourth quarter as they rose by 0.1 per- cent and even declined by 0.1 percent for single family houses. The pace of growth of mortgage loans being made also slowed over the course of the year and stood at 3.8 percent in the third quarter following 4.5 percent in the year 2013. This change was due to the Swiss banks’ self-regulation and the introduction of an obligatory countercyclical capital buffer for Swiss banks in 2013. The upswing in the residential property market in the USA con- tinued in 2014, although the average pace of rising prices slowed in comparison to the rate noted in the previous year. The market for rental blocks of apartments, which remained one of investors’ preferred asset classes, recorded further gains. Above-average gains in rents paid were observed in locations with thriving job markets. The financing market for this property category was marked by intensive competition, especially between state-sup- ported mortgage banks, banks, life insurance companies and pension funds.