Demand for residential mortgage loans continues to increase

Statistical News Release
Date 22 December 2014

Dutch banks reported a further increase in demand for residential mortgage loans in the third quarter of 2014. This means that the pickup in demand first observed early this year is accelerating.

Credit standards for residential mortgage loans remained unchanged, according to the ECB’s latest quarterly Bank Lending Survey (BLS) (Note 1). This survey provides qualitative information on credit demand and lending standards applied by banks based in the Netherlands to households and enterprises located in the euro area.  

The slowdown in demand for corporate loans from small and medium-sized enterprises (SMEs) has eased somewhat, according to the banks, whereas large enterprises showed an increase in credit demand. Banks made virtually no changes to their credit standards on corporate loans. 

Residential mortgage loans

Dutch banks reported a net increase in demand for residential mortgage loans for the third consecutive quarter (Chart 1): on balance 78 percent of the Dutch banking sector reported an increase in demand for this loan category. Banks cited the improved outlook for the housing market and growing consumer confidence as contributing factors in this development. In addition, for the fourth quarter of 2014 a large majority of banks expect a further revival in demand for housing loans . 

Chart 1: Weighted net percentage of Dutch banks reporting a change in demand for residential mortgage loans from the previous quarter

Weighted net percentage of Dutch banks reporting a change in demand for residential mortgage loans from the previous quarter

The banks participating in the survey indicated they had not changed their credit standards for residential mortgage loans. The last time that banks reported a net easing of credit standards was in the second quarter of 2008. Looking ahead to the fourth quarter of 2014, Dutch banks expect that credit standards on loans to households for house purchase will remain unchanged.  

Corporate loans

Dutch banks observed in the third quarter of 2014 a net decline in credit demand from small and medium-sized enterprises (SMEs), however, this decrease is smaller than in previous quarters (Chart 2). On balance 23 percent of the banking sector reported a contraction in the demand for corporate loans from SMEs. For the fourth quarter of 2014, Dutch banks expect nearly no decline in demand for this loan category. In addition, banks reported unchanged credit standards on SME loans for the fourth consecutive quarter. 

A net increase in the demand for corporate loans by large enterprises was reported, reflecting a trend seen over the past three quarters, with mergers and acquisitions cited as the main drivers. Lastly, banks stated that they had made virtually no changes to their credit standards on loans to large enterprises .  

Chart 2: Weighted net percentage of Dutch banks reporting a change in demand for corporate loans from the previous quarter

Weighted net percentage of Dutch banks reporting a change in demand for corporate loans from the previous quarter

Note 1: The analysis discussed in this release is based on a weighted calculation of the answers that the banks have provided in the survey. The results of the analysis are presented as weighted net percentages (the weighted difference between the number of banks reporting a demand increase minus the banks reporting a decrease). The weighted calculation of the answers causes differences with the data published in Table 5.5, which are based on an unweighted calculation. This table will be updated shortly.