Households

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Households risks in the Dutch housing
marketLoan-To-Value and Loan-To-Income ratios

• Arthur DennemanStatistics Netherlands
• Working Party on Financial Statistics OECD
  Paris, October 24th, 2011

Utrecht, 20 februari 2009
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Outline Loan-To-Value (LTV) and
Loan-To-Income (LTI) ? Macro approach
? Data sources ? Subpopulations
LTV and LTI results ? Overview of
some highlights (see paper for all
results) Concluding remarks ?
Micro approach risk tables as new tool

Utrecht, 20 februari 2009
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LTV and LTI macro approach Macro approach,
(sub)population considered as one entity
Loan total home mortgage of main
residences Value total house value
of main residences Income total
disposable income In the Netherlands 7
million private households I 4 million
owner-occupiers in NL II 85 of
owner-occupiers with home mortgage Household
characteristics ? many subpopulations of
target populations I and II

Utrecht, 20 februari 2009
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LTV and LTI data sources Ministry of
Finance / Tax authorities all tax payers (7
million) Home mortgage interest
deduction from taxable income ? income
is increased by percentage of house value
? long term saving plans in parallel of home
mortgage Income panel survey 85 thousand
private households ? not only
disposable income, also gross income etc.

Utrecht, 20 februari 2009
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LTV and LTI subpopulations - Age and
origin of main breadwinner - Size of
household and household composition -
Number of persons with income in a household
- Main source of household income -
Income, house value, and equity categories (25
groups) - Dwelling location region and
degree of urbanisation

Utrecht, 20 februari 2009
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Loan-To-Value
The Netherlands, 2005-2009
Loan-To-Income

Utrecht, 20 februari 2009
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Age of main breadwinner, 2009, all owner-occupiers

Age ? Mortgage ? (monthly
payments) House Value ? (upward house
prices) Income ? (getting promotion / a
rise)
Utrecht, 20 februari 2009
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Origin of main breadwinner, 2009, all
owner-occupiers

When did they become citizen of the
Netherlands?Indonesia 1950, Suriname 1975,
and Turkey starting from 1970.
Utrecht, 20 februari 2009
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Degree of urbanisation, 2009, all owner-occupiers

Utrecht, 20 februari 2009
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Loan-To-Value
2009 all owner-occupiers
Loan-To-Income

Utrecht, 20 februari 2009
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Concluding remarks
Dissemination at website of Statistics
Netherlands - LTV and LTI for 100 (!)
subpopulations ? annual data, starting
from 2005 ? includes all kinds of reference
data ? first release, hopefully, at end of
this year - LTI not only disposable
income, also gross income - not only
macro approach, also micro variables
like median, 25 percentile, and 75 percentile
- new tool to interpret data risk tables

Utrecht, 20 februari 2009
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Risk table, all owner occupiers
2009, number of owner-occupiers (x 1 million) 2009, number of owner-occupiers (x 1 million) LTV categories LTV categories LTV categories LTV categories  
2009, number of owner-occupiers (x 1 million) 2009, number of owner-occupiers (x 1 million) 0 0 0.5 0.5 1 gt1 Totaal
LTI categories 0 0.7
  0 3.5 1.4
  3.5 7 1.4
  gt 7 0.7
  Totaal 0.7 1.3 1.3 0.9 4.2

Utrecht, 20 februari 2009
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Risk table, all owner occupiers
2009, number of owner-occupiers (x 1 million) 2009, number of owner-occupiers (x 1 million) LTV categories LTV categories LTV categories LTV categories  
2009, number of owner-occupiers (x 1 million) 2009, number of owner-occupiers (x 1 million) 0 0 0.5 0.5 1 gt1 Totaal
LTI categories 0 0.7       0.7
  0 3.5   1.1 0.3 0.1 1.4
  3.5 7   0.2 0.7 0.5 1.4
  gt 7   0.0 0.2 0.4 0.7
  Totaal 0.7 1.3 1.3 0.9 4.2

Utrecht, 20 februari 2009
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Risk table, all owner occupiers
2009, 4.2 million owner-occupiers (percentages) 2009, 4.2 million owner-occupiers (percentages) LTV categories LTV categories LTV categories LTV categories  
2009, 4.2 million owner-occupiers (percentages) 2009, 4.2 million owner-occupiers (percentages) 0 0 0.5 0.5 1 gt1 Totaal
LTI categories 0 17       17
  0 3.5   25 8 1 34
  3.5 7   4 17 12 33
  gt 7   1 6 9 16
  Totaal 17 30 31 22 100

Utrecht, 20 februari 2009
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QUESTIONS ???
Utrecht, 20 februari 2009