Dynamic Credit Dutch Mortgage Market Report Q2 2019Dynamic Credit Dutch Mortgage Market Report Q2 2019

Dynamic Credit Dutch Mortgage Market Update 2019-Q2

Jasper Koops - Head of Portfolio ManagementJasper Koops1 August 2019

Continued spread widening, home price increases, and the first positive consumer confidence indication since April 2018. Learn more in our Dutch Mortgage Market Update.

Download the full Dynamic Credit Mortgage Market Update 2019-Q2 here.

Spreads even more attractive for investors

QoQ mortgage spreads widened an average of 22 basis points across fixed rate periods and risk classes, as the decrease in swap rates (-30bps) outpaced a decline in rates (-8bps).

dynamic-credit-dutch-mortgage-market-report-q2-2019 table1

House prices increases slowing down

CBS house price index increased 1.1% QoQ and 7.2% YoY in 2019-Q2, down from increases of 1.7% QoQ and 7.9% YoY in Q12019.

NHG claims down YoY

Number of NHG claims submitted in 2019-Q1 (362) dropped by 67% compared to 2018-Q1 (121)

Consumer confidence increased for the first time since April 2018

Dutch consumer confidence index increased from -4 in March 2019 to +2 in June 2019. Consumers are less pessimistic about the economic situation in the coming 12 months, and feel this is a more favorable time to make large purchases compared to 6 months ago.

ECB action expected in September

The June ECB monetary development release showed growth in the manufacturing sector deteriorating for the fifth straight month and market based inflation estimates decreasing to an all-time low of 1.13%. Shortly thereafter, Christine Legarde’s nomination to replace current ECB president Mario Draghi in November prompted downward movement in rates.

Untapped potential for energy improvements

Research from Nibud showed that many Dutch households have a financial incentive for investing in energy saving measures. However, many choose not to do so because they are unsure about future financial arrangements by the government.

With further stimulus expected by the ECB in September, and Lagarde expected to follow a dovish policy after she takes over from Draghi, it seems like low swap rates are here to stay. A benefit to all investors: spreads continued to increase steeply, the second quarter of 2019 experienced average spread increases of 22 basis points for owner-occupied mortgage loans.

Jasper Koops

If you would like to receive our housing and mortgage market update in your mailbox on a quarterly basis, please send an email to dutchmortgageteam@dynamiccredit.com.

Disclaimer Dynamic Credit Partners Europe B.V. (‘Dynamic Credit’) is a registered investment company (beleggingsondernemingsvergunning) and a registered financial service provider (financieel dienstverlener) with the Dutch Authority for the Financial Markets (Stichting Autoriteit Financiële Markten). This presentation is intended for informational purposes only and is subject to change without any notice.The information provided is purely of an indicative nature and is not intended as an offer, investment advice, solicitation or recommendation for the purchase or sale of any security or financial instrument. Dynamic Credit may in the future issue, other communications that are inconsistent with, and reach different conclusions from, the information presented herein. Dynamic Credit cannot be held liable for the content of this presentation or any decision made by a third party on the basis of this presentation. Potential investors are advised to consult their independent investment and tax adviser before making an investment decision. An investment involves risks. The value of securities may fluctuate. Past returns are no guarantee for future returns.

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Jasper Koops - Head of Portfolio Management
Jasper Koops
Jasper Koops