EMF Hypostat 2023 – United in Diversity

28 September 2023

The capacity of our industry to proactively analyse trends, discuss solutions and agree on best practices is the essence of securing financial stability while global cooperation is preventing market disruptions. All the major parameters and building blocks of the housing market are changing rapidly and unpredictably: the regulatory framework, inflation, demographics, geopolitical risk, digitalisation and ESG dynamics to name just few of them. In this context, the European Mortgage Federation (EMF) stands ready to play its role as the Industry think-tank and market catalyst supporting the transition to a greener future. Certainly, we are still in the middle of the long journey towards building a more sustainable European future against the backdrop of a global scenario, which for some could be defined as “the perfect storm”.

Lenders and other financial stakeholders are operating, on a daily basis, in a new market environment characterised by worldwide, rapid and drastic restrictive monetary policies, combined with high inflation and unprecedented geopolitical risks. Moreover, the completely new Environmental, Social & Governance (ESG) and macroprudential regulatory landscape is reshaping the retail and funding strategies of the entire European banking sector. In this changing environment, it is important that well-functioning capital markets channel private capital resources efficiently into satisfying real economic needs for families and citizens, and thereby promote the single market idea by providing real tangible responses to consumer expectations in all jurisdictions.

Against this background, it is of paramount importance to secure global cooperation and political leadership with a common lighthouse project which overarches the diversity of European citizens, markets, cultures and traditions. The European regulatory road map provides transparency and a common trajectory for building a new market ecosystem based on shared values, best practices, and civil rights.

In a nutshell, we can say that redesigning the space where we live is the essence of the NextGenerationEU architecture, which aims at revisiting the way we live in our countries, cities, neighbourhoods and homes. The cities where we live are also the places where our history is changing, where free markets, trade, citizens mobility and civil rights became fundamental benchmarks for our societies and communities.

A common financial architecture and free flow of resources acted as a social and cultural lift, which, over the centuries, has allowed societies to transform challenges into opportunities, enabling change towards a better future. How could we imagine the Renaissance without the contribution of the bankers like the Fuggers or the Medici, or a Paris of the “Belle epoque” without Haussmann and the “obligations foncières”, or a Germany without Frederick the Great and the “Pfandbriefe”.

Looking towards a more sustainable world, we all recognise that the levels of urban regeneration and home retrofitting required will need massive private and public investments, which can only be enabled by the creation of a new financial ecosystem specifically designed to facilitate and support citizens and public authorities.

The housing market is a central means to drive integration and social stability in villages, towns, cities, regions and countries across Europe, and at a global level. Indeed, the hope for a better future and moreover, the microeconomic incentives for accessing affordable and sustainable housing are the basis for securing macroeconomic financial stability and social integration for an ecosystem where no one is left behind. Financial markets act as mechanisms for the transmission of fiscal and monetary policies but, above all, in changing the mentalities of economic actors and individuals. There is no willingness amongst citizens to mobilise and seek to change their living conditions without having the hope to secure a better future. European citizens’ freedom of movement, combined with the implementation of a single market, is the key to long lasting stability and peace, while ensuring the uniqueness of each individual Member State.

Housing and mortgage markets are key drivers for the building of a unified Europe by way of financing loans, facilitating affordability and retrofitting of buildings, all of which promotes citizens’ social integration in their local communities. Owning a property and settling down in a local community makes people feel at home in areas that were previously unknown and thereby connects people to strangers. The EMF-ECBC remains committed to acting as a market think tank and catalyst in supporting the goals and achievements of the NextGenerationEU goals.

An unstable geopolitical and macroeconomic environment combined with the uncertainty of upcoming central bank decisions are presenting the mortgage credit industry with a more volatile context in which to operate. The reaction of consumers could be a reluctance towards undertaking new financial investments while the purchasing power of households is already under pressure from rising consumer prices and savings are losing value in real terms. Nevertheless, the high level of uncertainty makes the long-term financial strategies of lenders, investors and borrowers more important than ever, which places further attention on the quality for improved standards and increased transparency in the mortgage and covered bond market.

Regarding Europe’s demographic outlook, it is evident that our continent is undergoing profound changes, which will undoubtedly affect how Europeans consider housing and mortgages in the coming years. As population growth has slowed significantly and migration is no longer compensating for the decrease in the negative natural change of the EU population, especially in the central and eastern parts of Europe, society is facing serious challenges. The changes in demographics and in the social structure of our society is going to challenge and erupt the the present model of residential living and challenge the housing market to offer innovative solutions. Amongst other things, the main analytical article of Hypostat 2023 looks to highlight these demographic developments and contrast them to the development of Europe’s building stock.

Furthermore, Hypostat 2023 attempts to shed light on the topics of mortgage market developments, including the key socio-economic and macroeconomic aspects. By not approaching market data in a vacuum and including broader influences, patterns are contextualised and can be related to more microeconomic trends, even at a country level. Therefore, the Hypostat gives the stage to our national experts who are able to speak on behalf of their communities and help the audience to understand how housing and market developments influence social patterns in Europe and further afield.

Hypostat is the EMF’s flagship report and is part of a combined effort by the EMF-ECBC to deliver a comprehensive analysis of the state of play of mortgage and housing markets, building on and complementing the ECBC Fact Book. In this latter publication, covered bond experts seeks to identify and assess the key drivers of developments in the covered bond space over the past 12 months, providing market perspectives, analysis and data from 36 countries, covering over 95% of outstanding covered bonds. These experts share their views on the key market and legislative developments that have occurred over the past year, the best practices that have emerged, and address issues which have come to the fore such as digitalisation and sustainability, including both the social and green dimensions. Covered bond market developments are by no means disconnected from the broader mortgage space. On the contrary, covered bonds are anti-cyclical, long-term financing instruments that help fund around two-thirds of all mortgage lending in Europe. Thus, the changes taking place on the mortgage retail side will surely have an impact on the covered bond side, and vice-versa.

As the market environment is changing rapidly, it is becoming ever more important to combine and enlarge the view to both sides of the market. Rising interest rates, a changing price environment for housing and new green challenges are all increasing the pressure to provide a nuanced and completed picture. Both reports, the ECBC Fact Book and the EMF Hypostat, are seeking to meet this challenge and are complemented by the publication four times per year of the EMF Quarterly Reviews, which provide a more regularly updated picture.


In the light of the shift towards a more energy efficient economy, the EMF-ECBC and its members are taking responsibility for the role that the market can play here. The Energy Efficient Mortgages Initiative (EEMI), which seeks to optimise houseowners’ customer journey to increase the energy efficiency of their homes, and the Energy Efficient Mortgage Label (EEML) (see below) are the main initiatives of the EMF in this regard, laying the foundations from which to fund a socially desirable housing future. Through these initiatives, mortgage lending institutions are at the forefront of efforts to finance the transition towards a zero-carbon economy. Actions to curtail energy consumption and CO2 emissions are becoming increasingly urgent, more so if we consider the dramatic increases in energy prices since the first quarter of 2022. Mortgage lenders can help drive the green transformation of the European housing stock by supporting the implementation of energy efficient financial products and stimulating new renovation initiatives, whether national or regional.


The Energy Efficient Mortgage Label, launched in February 2021 with the support of the European Commission, is a quality instrument that allows for the transparent identification of energy efficient mortgages in banks’ mortgage portfolios by market stakeholders and its delivery is a key component of the broader Energy Efficient Mortgages Initiative (EEMI). Moreover, the Label is a catalyst for consumer demand and a driver of the qualitative upgrade of the energy profile of lending institutions’ portfolios, which translates into enhanced asset quality.

Through the Harmonised Disclosure Template (HDT), the Label provides information on the portfolios of energy efficient loans as assets to be included in green (covered) bonds, allows for enhanced evaluation and tracking of their financial performance relative to alternatives, and provides greater transparency regarding climate risks and resilience. At the time of writing, the EEM Label brings together 34 financial institutions from 14 different jurisdictions, covering 34 labelled products.


The labelling process and the broader context for the development of the EEMI and EEML initiatives are the topic for one of this year’s Hypostat standalone articles, which sheds light on the most recent work of the EMF-ECBC in these areas. All in all, the EMF-ECBC’s expertise and think-tank approach to market questions helps deliver solid insights into the mortgage lending market, while setting standards and developing solutions that improve the market. One of the most recent developments of this approach is the work to build a new ecosystem to present and provide the EMF-ECBC data in an interactive and appealing way. The believe that data and scientific evidence have the power to encourage engagement and influence stakeholders by the power of profound knowledge will give us the possibility to add value for our members and society as a whole. The EMF-ECBC looks forward to presenting the results of this initiative in the near future.


Hypostat 2023 brings together the efforts of over 30 contributors, commenting on an annual data series of 30 indicators, covering the 27 Member States of the European Union plus an additional 12 jurisdictions beyond the EU’s borders. Besides the country chapters of the EU27 Member States, which make up the bulk of the publication, Hypostat includes specific articles on the UK, Iceland, Norway and Switzerland. These chapters offer the most comprehensive and accurate source of data available on the markets covered and outline developments observed over the past year. To contextualise the single country developments, Hypostat 2023 also presents an analytical article covering the most recent macroeconomic patterns and key changes in mortgage and housing markets at a condensed level.


Finally, the 2023 edition of Hypostat includes four standalone articles focusing on key market developments:

  • Mat Santamouris elaborates on the magnitude of urban climate change and possible proposals to counterbalance urban heat;
  • Allianz SE outlines recent developments in the European housing markets and provides implications on the energy efficiency renovations of our building stock;
  • S&P Global examine the role of covered bonds and housing finance in emerging markets; and
  • The EMF-ECBC Secretariat presents an overview of the Energy Efficient Mortgages Initiative and the steps it is taking towards establishing a new ecosystem to supporting the transition economy.

On behalf of the EMF Research & Data Committee and its Chairman, Mr Gyula Nagy, who coordinate the preparation of each year’s report, we would like to sincerely thank all contributors for making the publication of Hypostat 2023 possible.


We look forward to engaging with our audience and we remain at your disposal for any questions.


Luca Bertalot, EMF-ECBC Secretary General