The Swiss mortgage market recorded growth of 3.1 percent (CHF 35.6 billion) in 2021 to around CHF 1,200 billion. While banks and pension funds continued to expand their volumes in 2021, the insurance provider group lost slightly (-1.4 percent). In the group of banks, it is the cantonal banks in particular that gained a market share of 36 percent and thus massively expanded their supremacy. The banks continue to dominate the mortgage market with a share of around 95 percent, despite the slight loss of market share by the big banks in recent years. The intermediary market also showed strong growth of almost 30 percent in 2021 with a lot of potential for the future. The annual volume placed by intermediaries has increased massively in recent years from less than one billion Swiss francs (2016) to around 11 billion Swiss francs (2021). With a mortgage volume of around CHF 200 billion placed annually, the proportion of mortgage brokers will be around six percent in 2021.
Die wmost important developments in the mortgage market in 2021
The mortgage market has grown by 3.1 percent or CHF 35.6 billion. The big banks (CS & UBS) only achieved insignificant growth of 0.2 percent (or +620 million) in relation to their portfolios. At the same time, cantonal banks (KB) have seen the strongest growth in terms of volume. Pension funds are also showing growth of ten percent and are the fastest growing group of providers. Insurance volumes have developed very heterogeneously. Both strong declines and high growth rates are visible. Overall, there has been a slight contraction in this group of providers.
Strong growth of intermediaries
Both the number of brokers and the mediated volume have risen sharply. There are now more than 30 mortgage brokers in Switzerland who closed a volume of around CHF 11 billion in 2021.
Die wmost important developments of the mortgage market 2015-2021
The overall mortgage market has grown by CHF 200 billion or a whopping 20.6 percent over the past six years. The trillion mark (1’000 billion) was broken in 2016 and since then the volume has risen to CHF 1’173 billion. The average mortgage market growth per year was around three percent – the last two pandemic years were even slightly above average at 3.4 (2020) and 3.1 percent.
The provider group of banks has lost around one percent of the market share since 2015, i.e. around CHF 11 billion. Nevertheless, with a 95 percent share, they remain the dominant players in the mortgage market. It is remarkable that the pension funds were able to almost double their volume within 6 years. This is probably due in particular to the intermediaries who give these players access to the mortgage asset class. And the insurance companies were able to keep their market share of around 3 percent over the last 6 years. However, there are clear differences when looking at the development of the individual providers.
Intermediary market: Strong growth with lots of potential
The annual volume placed by intermediaries has increased massively from less than CHF 1 billion (2016) to around CHF 11 billion (2021). Growth of almost 30 percent was achieved in the last year alone. The fact that the house bank was given less consideration when taking out or extending a mortgage certainly contributed to this development. In the last five years, this rate has fallen from 78 percent to 63 percent in 2021. Over the same period, the consideration of independent intermediaries has increased from four percent to 12 percent. This shows a representative survey that MoneyPark conducted in September 2021. With an annual mortgage volume of around CHF 200 billion (an estimated 163 billion extensions and 37 billion new financings), the share of mortgage brokers is around six percent.
There is a veritable boom in emerging brokerage platforms: In 2012, MoneyPark started out as one of the few pioneers. Since then, more than 25 new players have joined. Despite this new breadth of providers, the brokered volume remains concentrated on a handful of providers: MoneyPark, as the clear market leader (around 30 percent market share in the broker market), together with five other providers, covers around three quarters of the broker market.
In particular, professional brokers with full mandates from sourcing to processing mortgages have given many alternative investors, such as pension funds and investment foundations, access to direct investments in the stable asset class of Swiss mortgages. And that’s not all: intermediaries and online comparison portals have increased transparency for mortgage borrowers. The provider environment has thus become considerably more competitive.
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