Dear ladies and gentlemen, welcome to the webcast results Q2 2022 of Hypoport SE. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen only mode. After the presentation, there will be an opportunity to ask questions via the telephone lines. Any participants with difficulties hearing the conference, please press star key followed by 0 on your telephone for operator assistance. I will now hand you over to Ronald Slabke who will lead you through this conference. Please go ahead.
Yeah, welcome from my side as well for the half year report of Hypoport SE. As you know, we are on a growth track of digitizing the credit, real estate, and insurance industry here in Germany. As always, we kept growing in the first half of the year. We mean our multiple entities in the Hypoport network. The core presence in the German mortgage market, platform for the credit industry was heavily growing to a new record high of EUR 120 million in revenue. Same with the Private Client segment, strong growth. Our new segment, Real Estate and Insurance, this is with an increasing level of dynamism and a double-digit growth as well.
The new record numbers for the first half year, they are supported by all segments. We ended up with a plus of 23%. EUR 260 million in total. The new profit record with a 38% increase to EUR 30 million for the first half of this year. This all we achieved in a pretty challenging market environment. It was changing a lot. You can say on a monthly basis, things change. As a total for the first half of this year, mortgage volume in Germany grew by 10%. We outperformed this again as a group by double digits. In general, you can say that in the other markets the residential property transaction volume may have shrunk in the first half of the year.
We don't have accurate figures there for now. Last year it was still +8%, but we expect a decline for the first six months. While the insurance business was a stable environment, let's say. Since we are already a little bit in the environment of, or in the topic of market environment. What happened around us in the first half year, and when you try to predict the future, how it may go forward from here. First to understand, and this goes for the first half of the year and, hopefully as well for the near-term future. The German mortgage market is not linked to the, let's say, general economic environment.
You can see here the development of the GDP for the last 15 years. Even in the Corona crisis where it burdened heavily, mortgage volume was pretty stable over the whole time. It's not that Germans finance properties because of a prospering economy. They have other reasons. Another reason which is not core for the decision to finance in Germany is the interest rate. Something pretty different from Anglo-Saxon markets. Even when interest rates for a long time were heavily going down, in Germany from somewhere around 6%, 15 years ago to below 1%, between 2019 and 2021. Germans didn't lend heavily more.
There's an increase more or less on the level of inflation in the mortgage volume. Because of our market structure, especially because of the inability to refinance at any moment, we don't see an inflated market, because of the interest rates. Germans don't tend to buy properties because the interest rates are low, or in this case then the rate would be low. They have other reasons to buy and finance properties. Interest rate doesn't trigger buying, it doesn't trigger refinancing. There is not a strong link between these two indicators, let's say. Yeah. Next, what you could typically expect is that, with rising prices, mortgage volume goes up.
You can say in general this is true, because prices are rising over a period of the last 12 years, and the mortgage volume went up as well. As you see here, not even as fast as the prices were rising. The core reason for this decoupling here is that it's not that the German price dynamic was driven by more and more mortgage volume and more and more transactions. Something which you typically see in front of a real estate price bubble. It was just driven by excess demand and limited supply. The rising prices had an effect on the mortgage volume. With declining numbers of transactions over time, because especially the German natives, they're hesitating to accept this permanently increasing price levels.
While the foreigners for a long time felt that Germany was pretty cheap and bought mortgages, bought the properties and just used mortgages to leverage this. As well, the prices were not inflating the mortgage market. They are not driven by the mortgage market. You can turn this around. The mortgage market is not dependent on the prices of properties in Germany. When this is all not the core link, you may ask, s o what is it then? To understand this, it's important first to notice that we have a pretty stable market structure when you look on what are mortgages used for in Germany.
Roughly, a quarter of a mortgage is used for refinancing every year because you are only able to refinance every 10 years in Germany, and your new duration will be minimum 10 years. There are no mortgages below a 10-year fixed interest rate period in Germany. Only after this time you are able to refinance. There's no legal option for you to refinance early. Yeah. Next comes new constructions, new buildings, roughly representing 50% over a long time of the mortgage volume.
Pretty stable because the limiting factor here is land for constructions, something which is highly regulated here in Germany because we want to keep our municipal areas dense, and because of our especially environmental protection law, it's pretty difficult for community to expand and designate new areas for new constructions. It takes years, if not decades, to do this. The limiting of this supply of land makes it more or less impossible, even with a high demand side, to increase constructions. Because of this, the share of new mortgage volume going to new constructions over a long period with a huge change in interest rates, we are just stable more or less.
Yet, the last and major part is the purchase. Existing homes which are sold from a seller to a buyer as well pretty stable with a market volume of roughly 50% over the time. As you know already, prices were going up in Germany, so numbers of transactions declined. The reason Germans didn't trust in the price development for a long period, even when interest rates were low. What triggers Germans and what triggered Germans in the first half of the year to buy properties? It's a family issue you can say. Especially buying in Germany, you do once in your lifetime. You do this when children are there. Maybe you have to do it again if you divorce, and both wants new property.
Very seldom, when you change your job in a completely new area, in a new city, and you were a homeowner, you may acquire again something. This is the core trigger for a transaction here in Germany. While in earlier days, you could as well easily solve such a trigger event with renting something new. Today, half of the society in Germany is still renting properties. It gets more and more difficult to solve it in the renting market because of, you can say a lot to renting market. Over-regulated, difficult to adjust to a permanent changing society and lots of trigger events in the society.
This happened as well in the first half of the year with some kicks from the other factors like interest rate and economy and so on. In some moments, people were hesitating to act, and some they were desperate to act. For instance, when the interest rates were rising fast and you had an open project, you wanted to buy something, then you were dealing faster with this. This all we saw in the first half of the year, and we ended up with a 10% increase in the market overall. Looking forward, still that even none of these factors by itself has a determining effect on the size of the German mortgage market.
They all together create right now a huge level of uncertainty how the German mortgage market will look like in the next couple of months. You can say up until mid-June, interest rates were rising, so people were desperate to close their transactions. Since then, they came down by roughly 100 basis points, a whole percent already again. Now it's again that waiting is beneficial for you because it got cheaper. In June, for the first time, German housing market, the prices came slightly down, especially for existing homes. New builds still went up. This may as well trigger some hesitation that people hope for better prices, better deals in the future. Especially the seller side is willing to wait.
Sorry, the buyer side is willing to wait. We have this uncertainty about inflation, about energy prices, energy availability. This all creates some uncertainty for all market participants and for us to predict the near-term future and how the second half of the year will look like. What is important for you as a shareholder is the long-term perspective is clear. Long term means in the next couple of years Germany will see a huge net migration because of the huge demand of our industry and our society for skilled workers. We even when we have, again, a surplus in the birth rate right now the boomers are leaving the workforce, and they need to be replaced.
With the strong German economy, the periphery of Europe, the supply is skilled workers and a couple hundred thousand young people will migrate every year to Germany. This all happened since the European integration started and especially the free movement of labor in Europe were getting active 11 years ago. This is the core reason why the whole dynamic in the German housing market changed, why the prices were rising and looking forward, this will stay. We will see this migration. We will see a huge lack on the supply side because of our regulated construction industry and, let's say, supply of building land.
We will see that rents will go up, but because of the regulation, much too slow compared to the building of construction costs, which are heavily affected by inflation. The renting market is actually getting less and less attractive right now. The return in the renting market is declining while on the homeownership of the property price side for homeownership, there's no regulation and so new supply will focus on this one, this part of the market while this general squeeze this locked renting market will stay. Even for this additional demand side, the only way to supply is the self-occupied homeowner market.
The rental market is inefficient to solve this in the near-term future. Near-term future means the next 5- 10 years. Other regulations sharply changed for rental market here. This means for the future, we expect a stable and slightly increasing volume of transactions. From today's perspective, we don't expect sharp price increases anymore. We see that after this long period of dynamic price development, we reached a typical European level. Depending a little bit on how the inflation looks like in Europe in the future, German house prices should be in a similar dynamic like the inflation. Hopefully inflation comes down as well as the dynamics of the house prices comes down to just a couple percent.
Multiplied both increasing numbers of transactions, stable house prices will lead to a systematically increasing mortgage market in the long run. We are in a healthy market environment long term, and we will keep growing besides this by taking market share. Much about the market environment, what happened in the last half year, how it's looking in the second half of the year, and what is the long-term perspective. Now, how does the different segments of Hypoport performed during the first half of the year? As always, we start with the credit platform and our offerings and our ecosystem within the credit industry. Core is mortgages with Europace.
Besides this, Europace transacts as well personal loans and the funding part we have at REM Capital, we have an approach as well to digitalize the corporate loan business with German Mittelstand here as in the recent years. Mortgage business for the first half the year was up 14%, so we took the market share. Less than usual. Typically, we took a double-digit market share gain. It slowed down because now we had months where there was so much demand that banks prioritized and let's say didn't take too much third-party mortgages to keep their level of support and level of service for their own sales channel.
While in months where it was less business in the market, the demand for broker mortgages went up sharply, again. In the first half of the year, there were a couple of months where we had too much supply side, you can say. This slightly slowed us down. In general, you can say that all sales channels that we support, so mortgage brokers and the three banking groups, grew in the first half of the year. Together with them, we were growing in all four segments actually above market. With the broker channel, the most dominant one, we reach now a penetration of roughly 60%.
As I just described, we took market share here, but brokers were under some trouble when there was too much business in the market. The banks, cooperative and savings banks prioritized, and this you can see as well in our development in these groups. Because of their prioritization, even within their supply lines, let's say our speed of adaptation there slowed down slightly. +29% for the cooperative banks, +22% for the savings banks. When there was too much, they were slowing down. When there was too little, they were not fast enough competitive. They reacted too slow.
In total, you can say they lost market share to private banks in the first half of the year. From our perspective, our dynamic was affected slightly. Looking forward, if there's this volatility in the market, this is a perfect USP to sell our solution because with Europace in place for all sales channels, you are much more efficient in not switching on and off or delaying certain applications in sales channels, but to price correct that you always price in an efficient way for your production line, so that your credit officers are not in one month overrun and in the next month without work because you are too slow on reacting.
Plus, when your own sales channel is so strong that even your own branches are already, let's say, full, overfulfill your credit officer [inaudible] workload, then you can easily switch on some additional product supply from others and pass it through and broker it. You are just more flexible on both sides to breathe with the market up and down. This USP we are able to much easier focus and then sell in a market environment like right now with this permanent changes on the supply side than in pretty stable environments where it's easy for a bank to meet supply and resources in their credit office. Next market, personal loan.
Plus 46% in the first half of the year. Strong growth. We are focused on the refinancing side, the more complex personal loan business here in Germany. Not the simple stuff, not the point of sale business or the car financing. The complex business is a growing market because of as well the permanent changes in the economic environment. In good times, people take more loans, consume more. When it gets tough, then they need a restructuring. Europace is the right tool to do this. The same that Europace keep growing as price and risk run higher for banks.
If they have clients, their risk appetite that doesn't fit anymore, or the client doesn't fit to their risk appetite anymore, they can broker it to a third party. If the client doesn't accept the price the bank asks for, then they can broker to a third party and to a third lender and receive the commission. This is a growing offering in this whole personal loan restructuring market. We keep growing here. Talking about growth. A couple of years ago, we entered the corporate finance market. We acquired REM Capital, an advice company, to initiate our marketplace Fundingport.
REM Capital had a great development in the last couple of years especially boosted by special programs for energy efficiency for the German Mittelstand by the last government, which were effective since the first of July last year. We are still working on this backlog. Had a great second half of last year. Had now a great first half of this year. Now we are waiting for the new government to live up to its promises. Let's say the big problems of our times especially climate change now even the energy crisis linked to this demands huge programs and huge support by government sponsored subsidiaries for our industry.
We are waiting for clear signals from the government side. For now, we keep advising our clients, preparing them for what's coming and waiting for the right decisions finally made and not just talked about. In the meantime, we started Fundingport. In the first half of the year, we had our first transaction together with IKB, our joint venture partner, and REM Capital. Now since the first of July, Fundingport slowly opening for other sales side partners. Step by step initiating this marketplace for corporate loans here in Germany. Still early stage, but it's coming. The total for the Credit segment, it was a record half year as a result.
Our product line, we are growing, so no surprise that the total is, it's a huge success. Let's say we don't expect this to double this in the second half of the year. There will be a certain level of slowdown from this high dynamic, but we expect still like in the beginning of the year that, for the total of this year, we will be seeing increase, compared to last year's figures. Even then, we expect a slowdown in the second half of the year. Our next segment, Private Clients, as well as mortgage business here in Germany. In this case, a franchise system with roughly 200 franchisees operating branches. We acquire leads, online for them.
They have physical advisors, which are using Europace to advise the clients and transact mortgages on our behalf. Dr. Klein was growing by 18% in the first half of the year. It had pretty busy times when there was a lot of business in the market, and the challenge there was to find banks who were keeping their service levels. In the other months when there was not so much business in the market, it was more challenging in the competition. All in all, Dr. Klein outperformed the market by, you could say 8%, 10% market, 8% Dr. Klein. Keeping the growth track, which is intact now for 20 years and our five-year average.
We met exactly our five-year average in the first half of the year. A little bit in this environment to acquire new advisors got more difficult. When there's a lot of business in the market, advisors are too busy to switch to a new employer, to a new franchisee. In the times where there's not enough business in the market, some hesitate because they fear the risk of a change. This +2% is below our long-term average. Usually, we were growing by 10% every year. We will try to ramp this up in the second half of the year, but the environment in the first half was not good for the acquisition of new talents.
In the end, you can say as well a lot of competition is there too. As a result, Dr. Klein provided record numbers, +40% in revenue, slightly less dynamic on the profitability side. Here you can see that the cost savings linked to a pretty digital business, which easily could adapt and adjust to this pandemic environment and operate as well remotely. They are declining, so we had our gatherings again with our franchisees to be more emotionally connected. People are driving more and visiting each other more. This just costs money in such a system and we feel this on the profitability side, slightly. We are getting now close to a 50% profitability rate.
We expect that this will decline in the future, still farther back to a normal level of something around 35%-40% in the next couple of years. Let's see. This is heavily linked to the costs of physical interaction within the franchise network. We will try to keep as much of digital interaction as possible, and then we may see even profit levels still above the historical. Now we come to our growth segments. First, Real Estate. We are targeting here two client groups, home occupied private residential properties and their owners and everything what's linked with this.
The institutional housing sector, which is responsible for the social housing renting market here in Germany. The core strategy in the homeowner occupied area is to use our strong position in mortgages and expand along the value chain, getting by integrating more and more relevant in the purchase market and the transaction side itself. Plus adding the value proposition of property valuation, which is needed for every mortgage and supplying this integrated in our ecosystem. While this information is made very valuable for the purchase perspective. In the first half of the year on the property sales side, we saw a strong decline of transaction volume of our clients, which are usually real estate agents, brokers linked to banks.
They lost market share because the total market may have been down, but not as strong as they lost volume. You can see here that their approach is too offline. They are not online enough. Plus, a consumer to consumer transactions gained as well in relevance in the first half of the year. We with our services help them to compensate both their delay in the digitalization in the online world and as well their fixation on brokerage and not on supporting different types of transactions. Because of this approach, we were growing by 12% in the first half of the year. We are more and more needed by our clients to compensate their let's say struggling position in the market.
Especially when the market gets tough and that this was true for the residential housing market here in the first half of the year, then our services are even needed more. On the valuation side, we keep staying on the growth track. Volume went up by 17%. We still adding clients and increasing the quantity of just working together with each of these clients, resulting in a double digit growth of value. So we are on track you can say. We keep taking market share here, and with each step of integration with the new pay system, it gets more and more value added service for everyone, for our clients and for us.
Unfortunately, in the second quarter, the German authorities, BaFin, decided that virtual inspections of properties are not allowed anymore. This for the last two years, they were approved within the Corona adoption package for the industry. Now they roll back the whole package, and more or less accidentally, roll back as well the ability for virtual inspections, as well. Since the first of June, we now again need to physically inspect all properties, while we were up to 30% in the first half of the year just virtually inspecting. This is a big issue for us. We really hope that BaFin will reconsider this decision soon.
In other European countries, it's pretty normal to virtually inspect properties. We learned in the last two years that it's not riskier, a virtual inspection, that it's actually as safe as a physical inspection and that banks and consumers likes this fast and flexible approach of a virtual inspection. We hope that this is soon allowed anymore. Up until then, we have quite an amount of additional costs on the execution side. We had to hire 40 people. We need 40 more cars to do the old traditional way and visit each property and inspect each property physically.
This is a step back or setback for us, especially on the profitability side, because this is already an area where we heavily invest. We heavily invest in digitalization, and such regulatory changes are just unnecessary when they are backwards. It can't stay long like this. Even the authorities can't stop the digitalization of the credit industry here at this point. Now we switch to the other side of the property market, the housing market, to the institutional business. Here we saw a strong first half of the year. Housing associations were lending a lot of money in this time of increasing interest rates to finance new construction and renovations. New record level for Dr. Klein.
Klein, plus 38% to EUR 1.3 billion in the first half of the year. Because of the product mix and attractive products that we could offer with long fixed interest periods, revenue went even up stronger to EUR 11.1 million for the first half of the year. Which is, it's amazing performance when you think about the fact that the whole industry still is not, let's say, still hesitating to fulfill the political goal to build 100,000 new social homes every year. We are far from this because the current subsidy structure for social housing is just not in line with the construction costs and the regulated rents.
Whole industry is waiting for the government to find and finance the gap between the construction costs and the regulated rents. As soon as this comes up, this industry is ready to build tens of thousands of houses. As long as it stays as it is right now, without the necessary subsidies, they are just waiting and let's say focusing on other tasks than new social housing. As a result, the segment delivered a strong growth at 34%, organic growth here.
This shows step by step that it's able to be the one of the growth drivers of Hypoport in the future. Still we are in a heavy investing phase, so this -0.9% is positively affected by the strong profitability of the financing platform for the housing industry. In all other product areas here, we are heavily investing to ramp up our market position and integrate with especially the mortgage world to be in a perfect situation and provide a streamlined solution for our clients. Last segment, Insurance.
As you know, we are providing a platform for the insurance industry for in the meantime now three insurance areas. Private insurances so consumer, broker, and insurance companies integrated. Industrial insurances that's usually in corporate at German Mittelstand. Again a broker and a specialized insurance company. The third market the employer-linked insurance market, where there are even four participants, the consumer, the employer, the broker, and the insurance company, which needs to be integrated. In all three markets, we have existing solutions out there. In the private insurance market and in the industry insurance market often on premise with a track on migration. In the employer-linked market we have already an fully online digital solution there.
In the private client insurance business, our platform, Smart InsurTech, they are growing by 23% in the migrated volume from our existing solutions. Our, let's say, the total share of migration increased. Still, this is a pretty slow process and with a lot of IT projects permanently heavily delayed to migrate the on-premise volume, which is still roughly EUR 5 billion to our centralized solution. When it's migrated to the centralized solution, then we link this contractual information to the core systems of the insurers. If you are able to successfully link them via interfaces, we have a validated data set in our platform.
By now, 35% of all contracts in the Smart InsurTech database are validated, up from 80% a year ago. Both processes are crazy slow, how they go forward. In a certain way, you can say it keeps being disappointing. It's hard work, high investments from our side to force this industry step by step on the platform. For now, we are focusing our existing clients which are using our solutions, where the migration path is clear and repetitive. From client to client, we are getting better in the migration, but still we are struggling to speed up this process. We are looking for a silver bullet to change this, permanently we change our tactic here, but still we didn't find it.
Yeah, keep working in this muddy area and in a hard work to come forward. One way to improve is that we are right now in the process of spinning off the industrial business out of Smart InsurTech. In this market, we have a pretty high market share from the perspective of the total market. Our partners are highly dependent on us and very interested in bringing their competencies and our on-premise solutions together and create a platform. We are in intensive talks with them to create a solution which we're all benefiting. This project is going pretty well.
Could be faster as well, but we expect in the second half of the year to start the development of a new marketplace here. We address a very special market here with a premium volume of EUR 30 billion and very interested partners of us. Yeah. The last segment, the area of employer-linked insurance products, especially pensions. It's on growth track, 41% up to a year ago. It's a huge market opportunity for us, heavily under-digitalized in this complex world between these four participants. Still a lot of the market is manual information transfer between these four parties. There's a lot of errors in between.
Step-by-step, we convince especially employers that working with ePension is a much more efficient solution for their HR department than dealing with all the insurance companies the manual way. We gained some pretty interesting clients here in the first half of the year with huge numbers of volume pension schemes behind this. This is an ongoing process of migration then so that we have a pretty well visibility that this growth track will continue in the next couple of years. For the segment in total, it means a growth of 24% top line. This includes some inorganic growth from an acquisition of a small broker pool in last year.
This, without this, the pure organic growth is slightly below 10%. This is still below our expectation. We want to see double-digit growth in every entity organically. We are still struggling, especially in the Smart InsurTech world with the technical complexity of this insurance market. Let's say all in all, we see a progress. Our relevance in this three markets is increasing every quarter. With our approach of heavy investments in long-term B2B business models, we choose here the right difficult market to be the next to be digitalized by us.
In the summary, record year, because if you have four segments which are new record numbers, it automatically sums up to a great start of the year. On a long-term perspective, you see in which dynamic we are growing, and that this half of the year is just a prolongation of what we did in the last more than 20 years now. Especially on the profitability side, be aware that we keep heavily investing in the development of our platforms and the acquisition of additional transaction volume there, heavily in the credit industry, in all product areas there, but as well in insurance and in real estate.
These investments are the P&L relevant investments is EUR 45 million last year. The first half this year will have been in a similar level. Something close to EUR 25 million in the first half of the year be invested already again. Outlook. When I talked about market environment, I think I made it clear already that it's really getting difficult right now to predict the near-term future. What is certain even for the near-term future is that we will have a net migration to Germany, so the stress in the housing market will increase.
This, if it will lead directly to more transactions or if there are other reasons overlapping this fundamental approach with some short-term developments, it's difficult to predict in an environment where you have a war, where you have a potential upcoming recession, where you have a lack of energy, where you have an inflation and a European Central Bank trying to counter this, where you have declining interest rates again, and where you have an uncertainty about the development of house prices short-term in all this. What is certain is that, because of the higher interest rate level in the regulated renting market, home occupation will go up in Germany.
Renting, especially renting a newly built home or a newly acquired home is just not attractive anymore from the investor side, landlord side. Especially because of taxation issues that after 10 years you can realize capital gains without taxes. There is an incentive as well for existing landlords to de-invest in a certain moment. What stays a pretty uncertain is how much our new government is willing to live up to the promises and bring efficient subsidies and programs to the market, which help German Mittelstand to counter the different challenges right now out there.
What is as well absolutely uncertain is how the Russian aggression against Ukraine will affect via this its dependencies German economy and what we actually will create. What is certain from our side is we keep heavily investing in our future projects. We keep fully digitalizing the mortgage market and automating the credit decision process with one click. We will keep expanding our network and our reach in the personal loan business. Fundingport launch, and we will keep bringing this marketplace to life in the second half of the year. We will integrate the residential property market from the transaction via the mortgage underwriting, valuation even more.
We will spin off the industrial insurance in the second half of the year from Smart InsurTech. We have a lot of things to do. Market is volatile around us, and because of this, we just stick with our forecast for this year from the beginning of the year. Even when first half of the year was very strong and above expectation, we don't expect right now that the second half of the year will be so easy. To be fair, we didn't expect at the beginning of the year as well that the first half of the year would be so strong. Looking forward, there's a lot of things to do for us, a lot of chances to take.
With our culture, our decentralized structures, we are pretty well able to use a lot of these chances which are offered right now to us. With this, I would open the Q&A session and hand back to the moderator.
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Okay, then. No problem. Let's assume I answered all questions already. We will meet us again here in three months after the third quarter is finalized, and we know what happened in the German market. We will deliver. We will progress. We expect to gain market share however the market will look like in the next couple of months. We will set the basis for a great year 2023 as well in the next couple of months. Thank you guys for listening. Hope to see you soon. Bye-bye.
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