Housing finance in Norway

Transcription

1 Housing finance in Norway Governor Svein Gjedrem Norwegian Covered Bond Forum 27 January 21 1

2 Lending by lender sector. Norway As a percentage of total lending ) 1 1 Others 8 6 State lending institutions Mortgage companies Banks ) Statistical break in Figures for for state lending institutions include Norges Bank Sources: NOU (Official Norwegian Report) 1989:1, Statistics Norway and Norges Bank 2 2

3 Housing finance in selected countries in the 199s By lender sector. Per cent 1) Denmark Sweden Norway Mortgage companies Banks State institutions Insurance companies/pension funds Others 1) 1992 for Denmark and Norway and 1989/199 for Sweden. Residential mortgage loans from state lending institutions are not specified for Denmark and Sweden Source: NOU (Official Norwegian Report) 1995: 11 3

4 Housing finance in selected countries. 29 By lender sector. Percent 1) Banks Denmark Sweden Norway Mortgage companies State institutions Others 1) Residential mortgage loans from state lending institutions are not specified for Sweden Source: Danmarks Nationalbank, Sveriges Riksbank, Statistics Norway and Norges Bank 4

5 Fixed-rate loans as a percentage of total household lending 1) 24 Q1 29 Q Norway Sweden Denmark ) Figures for Denmark refer to residential mortgages only Sources: Danmarks Nationalbank, Sveriges Riksbank, Statistics Norway and Norges Bank 5 5

6 Five-year government bond yield and three- month money market rate January 1979 January 21 2 Five-year government bond yield Three-month money market rate Source: Thomson Reuters 6

7 Banks assets and funding 29 Q2. Per cent Other assets Deposits / lending to financial corporations Securities measured at fair value Lending to 4 Norwegian households Assets Lending to Norwegian nonfinancial corporations Liabilities Customer deposits Deposits/ borrowing from financial corporations Other debt Securities debt Equity capital Sources: Statistics Norway and Norges Bank 7 7

8 Sources of bank funding in Norway 1) As a percentage of total assets and 29 Q3 1 Equity capital Deposits Swap arrangement 6 4 Loans from Norges Bank Market funding and other debt Sources: Klovland (27), Matre (1992), Statistics Norway and Norges Bank 8 8

9 Banks market funding by residual maturity Per cent. 25 Q1 29 Q Less than 1 month Less than 1 year 1 Mar-5 Mar-6 Mar-7 Mar-8 Mar-9 Source: Norges Bank 9 9

10 Banks foreign currency funding As a percentage of total t assets Q1 29 Q Source: Norges Bank 1

11 An efficient bond market is characterised by: instruments that are easy to understand clear regulation transparency in trading multiple independent bidders and askers high trading volumes in primary and secondary markets 11 11

12 Proposed changes in the collateral requirements for loans from Norges Bank No new securities under the temporary rules are approved as collateral as from 22 October 29 Securities already approved under the temporary rules may be pledged as collateral until maturity, at the latest until 15 February 212 Debt instruments issued by foreign banks will be included in the bank quota as from 1 December 21 Securities issued by banks will no longer be eligible as collateral l for loans from 15 February 212 Norges Bank will continue to accept covered bonds (OMF) as collateral l for loans 12 12

13 House prices in selected countries Index Q1 = Q1-29 Q4 4 US 35 UK Norway Sources: Thomson Reuters, Standard & Poor s, Case-Shiller, Association of Norwegian Real Estate Agents, ECON Pöyry, Finn.no, Association of Real Estate Agency Firms and Norges Bank 13 13

14 Periods of rise in real house prices in Norway Number of years and total rise in per cent years years years years years years Sources: Statistics Norway and Norges Bank 14 14

15 Residential mortgages by loan-to-value ratio. Norway As a percentage of total t residential mortgages 1) below 6% 6-8% 8-1% above 1% ) Total residential mortgage loans in the survey. The figures for 29 are based on the spring 29 residential mortgage loan survey, which contains fewer observations than previous surveys. Source: Finanstilsynet s (Financial Supervisory Authority of Norway) residential mortgage loan survey 15 15

16 Periods of decline in real house prices in Norway Number of years and total decline in per cent years years years years years years Sources: Statistics Norway and Norges Bank 16 16

17 Housing finance in Norway Governor Svein Gjedrem Norwegian Covered Bond Forum 27 January 21 17