Mortgages in Belgium 2007 (Market Guide)

Gross advances in the Belgian mortgage market fell by 8.4% in 2006, partly due to increases in borrowing costs. What are the current issues facing this market? How are housing policies affecting its performance? Who are the biggest lenders? What will be the size of the sector in the next five years? This report provides the answers.



Report Highlights
Gross advances fell by 8.4% in 2006, from €35.5 billion in 2005 to €32.5 billion. Despite this, overall new mortgage lending growth was strong during 2002–06, at a CAGR of 19.1%. The majority of mortgages are under fixed interest rates in Belgium, whether short- or long-term. Short-term fixed rates (one to five years) have gained in popularity over the last couple of years. According to the UPC, 74.8% of its members’ gross advances were accounted for by fixed rate mortgages in 2006. House price growth reached an impressive peak of 17.4% in 2005. This growth has been particularly strong in urban areas with, for example, house prices in Brussels increasing in excess of 30% annually since 2004.


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Overview 1
Catalyst 1
Summary 1
Executive Summary 2
Market size 2
Market forecasts 2
Key market issues 3
Key market players 4
Contents 5
Figures 6
Tables 7
Market Context 8
Country overview 8
Demographics data on a selection of major western European countries 10
Population 10
Economy 11
Housing market 16
Dwelling stock 16
House prices 18
Government housing intervention 19
Taxes, subsidies and housing schemes 19
Market data 20
Mortgage interest rates 20
Market size 21
Balances outstanding 21
Gross advances 24
Product lines 25
Market structure 26
Structure of the Belgian retail banking sector 26
Mortgage market structure 27
Funding 27
Distribution 28
Regulatory environment 28
Industry regulators 28
The NBB 29
The CBFA 29
Industry associations in Belgium 30
The BBA 30
Test-Achats 30
The UPC 30
Repossession and rules of law 30
Regulatory issues and developments in the mortgage market 31
The birth of an integrated European mortgage market is still very far off 31
Basel II will mean a number of changes for lenders 31
Key issues in the mortgage market 32
Competitor and Product Overview 33
Top four mortgage lenders 33
Market share by balances outstanding 33
Product analysis 35
There are two forms of property financing in Belgium 35
Typical product characteristics 35
Market Forecasts 37
Forecasting gross advances 37
Gross advances in the Belgian residential mortgage market will grow at a CAGR of 6.6% 37
Future prospects 38
Market attractiveness 38
Market inhibitors 39
Appendix 40
Supplementary data 40
Data tables relating to Chapter 2: Market Context 40
Definitions 41
AAGR 41
Balances outstanding 41
CAGR 41
Capped mortgage 41
Equity release 41
EU 15 42
Fixed rate mortgage 42
Flexible mortgage 42
Gross advances 42
Loan-to-value (LTV) 42
Mortgage intermediary 42
Remortgaging 42
Self-certification mortgage 42
Variable mortgage 42
Forecasting methodology 43
Research methodology 43
Further reading 44
European mortgages 44
Ask the analyst 44
Datamonitor consulting 44
Disclaimer 45

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Table 1: Forecast of residential mortgage gross advances in the Belgian market , 2005-11f, (€m) 2
Table 2: Total population across major western European countries, 2002-06 10
Table 3: GDP at current rates across major western European countries, 2002-06, (€bn) 11
Table 4: GDP per capita at current rates across major western European countries, 2002-06, (€) 12
Table 5: GDP growth rates across major western European countries, 2002-06, (%) 13
Table 6: GDP composition by sector across major western European countries, 2006, (%) 14
Table 7: Inflation across major European countries, 2002-06, (%) 15
Table 8: Unemployment rates across major western European countries, 2002-06, (%) 16
Table 9: Age distribution of dwelling stock in Belgium, 2004 17
Table 10: Residential mortgage balances outstanding compared to GDP of selected European countries, 2006 24
Table 11: Top four mortgage lenders in the Benelux region by balances outstanding, 2005-06 34
Table 12: Forecast of residential mortgage gross advances in the Belgium market , 2005-11f, (€m) 38
Table 13: Total dwelling stock in Belgium, 1999-03, (000s) 40
Table 14: Typical mortgage rates in Belgium, Q3 2004 - Q4 2006, (%) 40
Table 15: Mortgage balances outstanding in Belgium, 2002-06, (€m) 40
Table 16: Mortgage net lending in Belgium, 2002-06, (€m) 41
Table 17: Residential mortgage gross advances in Belgium, 2002-06, (€m) 41


Figure 1: Gross advances in the Belgian mortgage market reached €32.5 billion in 2006, 2002-06 2
Figure 2: Fortis is the largest mortgage lender in Belgium, 2005-06 4
Figure 3: A snapshot of Belgium's key statistics, 2006 9
Figure 4: Dwelling stock in Belgium has remained static since 2001 at 4.2 million, 1999-03 17
Figure 5: The majority of dwellings in Belgium are owner-occupied, 2001 18
Figure 6: Annual house price growth in Belgium has been in the double digits, Q3 2004-Q4 2005 19
Figure 7: Typical mortgage rates stood at 4.38% in the fourth quarter of 2006, Q3 2004-Q4 2006 21
Figure 8: Total mortgage balances outstanding in Belgium reached €109.5 billion in 2006 22
Figure 9: Net mortgage lending in Belgium stood at €11.6 billion in 2006, 2002-06 23
Figure 10: Gross advances in Belgium reached €32.5 billion in 2006, 2002-06 25
Figure 11: Refinancing in the Belgian mortgage market had grown in importance, 2002-06 26
Figure 12: Banks advanced 91.3% of balances outstanding in the Belgian mortgage market as at September 2006 27
Figure 13: Regulatory structure of the Belgian banking market, 2007 29
Figure 14: Fortis is the largest mortgage lender in Belgium, 2005-06 33
Figure 15: Growth in the Belgium market will remain solid but not buoyant, 2005-11f 37


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