Dear ladies and gentlemen, welcome to the webcast results Q3 2020 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, and after the presentation, there will be an opportunity to ask questions. If any participant has difficulties hearing the conference, please press star key followed by zero on your telephone for operator assistance. May I now hand you over to Ronald Slabke, who will lead you through this conference. Please go ahead, sir.
Thank you, and welcome from my side to the Q3 presentation of Hypoport. As you know already, Hypoport is growing. We have a top-line growth of 50% for the first nine months in 2020. Despite a challenging environment, the approach to digitalize the credit market, the housing market, and insurance market in Germany is working well, and we are gaining market share in an overall more or less stable environment. Talking about environment first. Corona crisis was there through a major part of the first nine months. Since March, we are as a society, as a country, infected with the Corona crisis. In these three industries, Credit, Housing, and Insurance, it had an impact, not comparable with other industries. Let's say the industries are stable, but they are operating in a different environment right now.
Especially operation got tricky in this environment while the P&Ls of our clients are, let's say, only minor affected during this crisis by now. When we talk about the first nine months, then it's important to understand that there was some ups and downs by now during this period. Especially in the mortgage market, we saw a strong first quarter, including the March, which was already in a lockdown. With a +10% reported by Deutsche Bundesbank, we saw a growing market comparable to last year. Second quarter was still growing, +6%, and a clear sign that the interest of consumers in redefining their housing situation after the lockdown was a huge change in the society. You could see how important your own four walls got during the beginning of the crisis.
A little bit surprising for us was that third quarter was weaker from the market side. The total quarter ended within -4% compared year-over-year to last year. We started weak July and August were -5%, -6%. September is again on the level like last year. When you look on this, there are multiple options to explain this market situation in the third quarter. Maybe people were happy after the difficult second quarter to enjoy their freedom again, to travel, make holidays with the children. Optimizing their living situation and financing a new home was not so important in this time. The last year's third quarter was a strong quarter, especially July and August, thanks to some interest impulses.
Can be that, let's say, it was just a slow start in the holiday season, and the September shows that we are back to normal, so that we can stay confident that the fourth quarter will not be affected significantly by the Corona crisis environment. This said about the mortgage market. What stays intact is that even in this environment, in the mortgage market, everyone understands that an increased digitalization of the whole value chain from consumer via advisor to the back office is needed more than ever, and that it's a must-have if you want to survive future lockdowns. We are working with our clients throughout this last half year intensively in pushing projects forward. What we see is that banks are in a stressed environment right now, and that they reallocate their resources on a short notice.
Not that their P&L is really affected, their organizations were not made for this environment. The stress of the organizations leads to a slowdown of strategic projects. This what we drive forward with them, to digitalize sales funnel after sales funnel in their industries and in their businesses is slowed down by the virus as well. This counts as well for other B2B partners that we have, that in this environment, traditional organizations are not as agile as they would be in a non-COVID environment. Even when the need increases during coronavirus, their ability to execute is weaker. This we see as well in the mortgage market. A number of new clients, the growth numbers of projects, of migration projects growth. The transaction numbers are not as fast accelerating as they should with the progress that we do here.
I will talk more about this later when we talk about our development in the retail banking industry. Before this, looking on other product areas and markets we are operating in. Next to mortgages in the credit market comes for us the corporate finance and the personal loan market. Corporate finance, you can say that German Mittelstand is hit hard by coronavirus. Demand went up during the last quarters, especially during second to third quarter. We could advise clients and broker some subsidies, subsidized loans from KfW. The typical project that we do during the summer were slowed down. The additional fees from advising in the current environment compensated the slowdown of the other projects, but didn't come on top as we expected earlier.
In the midterm and looking forward, we expect that financing Mittelstand in Germany will be more complicated than it was in the past. The banks will be much more sensitive regarding external shocks and, let's say, after working out their bad banks, they will be more picky than they were in the past. Because of this, services like REM CAPITAL will be needed more because it will get tough for Mittelstand to finance itself. External help will be needed. Plus, more transparency in the market and this FundingPort, we are right now positioning a digital platform for especially this incremental increasement of the efficiency of markets and transparency in this credit market of German Mittelstand. We are well-positioned, but the market is fragile right now.
For the consumer credit market as the third-largest segment in the credit platform, we saw right with the first lockdown that banks, let's say, restricted their lending policies because of fear of losses because of recession. In the summer, it was weakened again, and the restrictions were taken back partly. Now with the second lockdown coming, banks again get more picky in what they are willing to loan to consumers, just on the solvency of the consumer itself without any additional collateral like a mortgage. The long term, we expect that we will come back to the pre-Corona situation. We have a quite healthy consumer lending market here in Germany, and a very low default rate long term. This sensitivity of the banks in the current environment will normalize again when the stress of the uncertainty regarding the length and the depth of the recession is over.
This market is the only one in the credit market. We don't see additional impulses from digitalization. It's an ongoing process for the last five years already with a high speed. This is going forward. Everyone knows that personal lending will be fully digitalized as well. It will be actually the first, and mortgages and corporate loans will be later. Okay. For the private client segment operating in the mortgage business as well, you can add that the need of the consumers for remote advice via conference calls increased during the second quarter. During the first quarter, we saw a bouncing back and normalization. There is a group of consumers who still wants physical advice. Face-to-face is preferred by a substantial number of consumers. While in the second quarter, a huge amount were closed remotely. Third quarter, we saw again offline business of our franchisees.
What stayed is that especially younger consumers, well-educated consumers, stayed with the remote advice because it's more practical for them. If you look forward from the way how consumers will interact with their advisors, the crisis will work as a catalyst and increase the speed. We will not see that consumer advice and mortgage business will be fully digitalized within a couple of quarters. This will take decades until that fully changes to a remote advice process. What stayed long-term as well when you look on the consumer side especially, is that the crisis teaches everyone how important their own four walls are. Homeownership got much more importantly in Germany in the last two quarters, and we see an increase in demand on this side, and because of this increasing prices of properties here in Germany. This is a healthy development.
We are still far behind most of the developed world when you look on the property prices. There is still a lot of growth potential just from the price increase here in Germany. Even with the second wave coming right now and a soft lockdown, which we see in November in Germany, we don't expect a too dramatic fall in the number of transactions. It will be a little bit less during the soft lockdown, but the increasing prices will compensate partly already. Other industries, housing, real estate market. Most of this, what I said about the mortgage market, is linked to the housing market. We saw that during the last two quarters, there was a slowdown in numbers of transactions. Third quarter was already getting better from the number of transactions. Prices increased, as I said.
The digital part of the process increased and needs to be increased. Midterm, we expect that the demand will stay or even drive the prices up. The digitalization, especially in our target group, which are banks, and their property sales agents will stay high. Even if it's unfortunately like this, that during the third quarter, we saw that banks are still challenged by the environment and can't focus on this strategic project and allocate resources needed so that we are moving fast forward and migrating even faster. More about this later. Property valuation was an area which was hit more than everything else in our portfolio because of the inability to inspect homes of people during the second quarter and the lockdown. This changed in the third quarter, so from the consumer side and from the availability or accessibility of properties, we saw a normalization.
The only thing which stayed were that some of our partner banks were not able to process all the applications they had and request the audits and the evaluations. This slowed down the growth rate there and creates such a stack of open evaluations that need to be made in the next couple of quarters. Some growth potential for us in near term. The regulator here in Germany allowed more digitalization in the process, which is fine, which is helpful, which speeded up the digitalization in this area and makes us more confident about the investments we are doing here. This is a market to be changed. The housing industry, so the renting market here in Germany, saw little impact during the first part of the crisis, and third quarter stayed the same. Really a small number of defaults.
Some projects are a little bit delayed on the development side, but nothing major. You can say that housing is in general not affected by the coronavirus up until now. Just minor issues here and as well like in other industries, our partners are distracted from strategic projects to keep handling their day-to-day work. This slows down something, but this is not a strategic or a sufficient change which will stay. The same goes here for the future. Let's say the pressure on digitalization went up a little bit during the crisis. They learned that it would have been easier with the ability that their workforce could work remotely. It's an industry which is in general not under pressure because of the overall environment. Let's not expect too much impact here on the speed of change and speed of digitalization in this industry.
You can say this, that it looks like this as well in the insurance industry. The competitiveness of new players is here more important. The drive to digitalization of insurance companies stayed during the third quarter. The impact on the industry, on the side of premiums or losses, was low by Corona. The realization how dependent they still are from the physical contact and offline services to their client was high. The insurance world learned again as well during the last six months that digitalization is needed. We are the offer there. We are the only one capable to do this. Let's say we keep getting interest from the industry. As well like in other industries, they are focused on day-to-day business and keeping the operation running. Away from strategic process slowed down a lot of projects in the past.
Overall market environment, that's it. You can say we are in a stable environment overall, just partners are slowed down because of operational reasons. We are gaining market share in this stable environment, and we as Hypoport are growing. We do this in a different speed. When we look on the different segments of Hypoport, you will hear some, let's say, some small news and small updates here. Let's start with Europace and the Credit Platform. We saw for the first nine months a growth rate in average of 30% for all product areas. Mortgage business is up 34% over the first nine months in a slightly positive market environment. Third quarter, market was minus 4%. Europace was again double-digit in the plus. We are gaining market share. Same goes for building society contracts, Bausparverträge, which are typically linked to mortgage business.
They are in line with this, just growing a little bit slower because of the attractiveness of this product. A little bit different, the product segment, the personal loans. Because of the restriction on the lending policies, the overall market is down for the first nine months. Especially for third quarter, minus 7%. We are slightly growing in this environment still. Gaining traction on new clients. Let's say, especially in our special feature that we are used as a Ventil for the risk profile of banks. If banks don't want to lend to their clients, that they use Europace to outplace this business. We see these restrictions, and we are hurt by these restrictions of other banks. If one bank doesn't want to lend, a lot of other banks don't want to lend right now as well.
Especially in this riskier target group, it got a little bit more difficult. We are losing there some revenue right now. As I said earlier, we expect this to normalize again after the crisis and that this business comes back to where it was before. Which will give them a nice positive impact on the growth rate of our personal loan business. You can say prime business and less prime business will grow together. Right now, only the prime business is growing on Europace. Okay. There was a phone call in between. Sorry for the interruption. Back to mortgage business and to the development in the different segments of the German mortgage market. We see a strong gain in market share for Europace over the last nine months and the last quarter in all four segments.
Especially the cooperative banking sector and the savings bank sector is driving our growth forward. In the cooperative banking sector, we gained 85% year-over-year by now. If they would not have such a trouble with their operation and reallocate their resources, we would be up to 100% and more in this area. Corona slows us down here and slows our growth rate down here a little bit. Same goes for the savings bank side. Without the Corona effect, we would not be up only 35%, we would be up more than 50% in this sector. As I said, banks have an operational issue with this crisis. To reallocate resources away from strategic IT projects right now. In both sectors, we see a strong sentiment to work with us. They understood even better how important it is to digitalize.
We expect in both sectors for the next years, high growth rates and a fast gain in market share for the Europace technology. This sums up to a strong first nine months for the Cr edit Platform, + 20%, EUR 120 million in revenue. It's a new record and a clear double-digit growth rate. You see here that the growth rate is a little bit less than the transaction volume growth rate. You see the impact of the slowdown in corporate finance and personal loans, especially. On the profitability side, we increased our EBIT again. New record as well, EUR 25 million for the first nine months. A little bit below expectation. We wanted to keep the growth of all three core KPIs in line. The weaker third quarter here surprised us and let's say our cost side is not dependent on the revenue side.
It describes our willingness to invest in the future in key account resources and IT development. This surprise of the weak third quarter environment resulted in an underperformance here for this quarter. We will adjust our investment willingness in the next quarters to make sure that this stays in line again. Sorry for this, coughing a little bit. It's my third call here today, and yeah. It tickles my throat. I'm pretty sure this has nothing to do with Corona. Different than when we talk about the business impact here. Okay. Nothing to do with Corona. Private client business of Dr. Klein. Our franchisees did a great job in the first nine months. We gained a lot of market share, + 24% in growth rate in the first nine months above the historic numbers.
Here paid back that we were much more digital than most of our competitors are. Let's say, you can say Dr. Klein was the most digital advisory outfit out there during the Corona crisis. Here as well, it's slower in the third quarter on the growth rate. On one side, thanks to the market, on the other side, Dr. Klein had an extremely good third quarter 2019, and extremely strong quarters first and second. We expect that or we see here that this slowdown is more a base effect than a real slowdown in gaining market share. It's a good news, while in the second quarter it was getting difficult to recruit new advisors. This changed in the third quarter, 26 new advisors in the third quarter, we are close to back to our long-term growth rate of headcount of advisors of close to 10%.
10% is our goal as an annual growth rate in headcount. In addition, the productivity gains of Europace and the increased average loan amounts brings this top-line growth of 20%+ , which we are used to here from Dr. Klein. Dr. Klein finished the first nine months with record numbers as well. Double-digit growth rates on revenue and the gross profits. Especially in the comparison between the 24% of transaction volume and only 17% revenue increase. You see the impact of Corona in the accuracy and predictability of a closed mortgage. The conversion loss, because transactions of clients are terminated or banks change their credit criteria, is significant right now. We see here that we lose some efficiency in this conversion loss because of the uncertainty around us. Still, let's say double-digit growth rate on revenue.
When it comes back to a normality, we will see a normalization of this conversion rate as well back to the pre-Corona level. This means with the same number of transaction volume, we will increase our revenue even more. Huge jump in profitability here. We had heavy investments in the last two years in key account resources to establish a better relationship with these hundreds of regional banks that Europace integrate in the system and to really work with them and drive their conversion rates up. You need to invest in key account resources. Dr. Klein did this and because of this got close, strike better deals with them and this resulted in an historic high profitability of this business here right now.
Looking forward, we expect Dr. Klein to finish with a record new high for this year and to continue its growth rate in the next years as well. Continued growth rate is as well something which is perfectly linked to the next segment, and our real estate platform. We try to use our strong position in the mortgage market to gain strong positions in property sales and property valuation as well. Property sales is interesting for us because the link between transaction and mortgage is strong. As a consumer in a digital world, you can expect that with every offer for a property you get, you get the information if you are able to afford it and what is the cost to you actually. With every mortgage transaction as well, there is a valuation needed.
In both markets, we see a high fragmentation and fragmented digital processes when they are digitalized at all. We expand in both. On the property sales side, we focus on the real estate agents of banks to leverage our long-term relation with banks and their quite special need and our USP to link the housing transaction and the mortgage with each other. On the property valuation side, banks are the clients and the customers. With optimized integrated processes with the Europace system and with our long-term trust and relation with banks, we see that we are able to gain market share here in this environment and gain from a lot of smaller intermediaries which operate here or evaluators. Let's start with the sales side. We have a strong position in the savings banks industry already, incrementally increased it.
Now 86% of all savings banks use FIO as their sales platform. We expand the reach of the sales platform, we expand integration, and we expand the services which are available on this. This way drive the transaction-based revenue models up. On the other side, this was, let's say, long-term plan for us, finally we are able to execute this. We are not keen on one-offs and let's say project revenues and license revenues which are one-time paid. We transform this one-offs to recurring revenue and increase our recurring revenue base step by step in this industry. Same goes for the ERP system for the housing industry, which is as well part of this segment here.
The combination of both, that we are growing and transferring to recurring revenue, that these partners are slowing down some of the projects because of their need to handle this Corona environment and the test interest in one-time revenues, unfortunately resided in a slowdown in total revenue that we are able to show to you, - 6% to EUR 14.4 million only. We had expected to show a growth rate here even with or without this project business. Unfortunately, Corona didn't make it possible. Let's say, in front of us lays growth and based on recurring revenue and not one-offs. Recurring revenue, while we are quite strong in the savings bank industry already, there is a huge market open for us in the cooperative banking area. We increased our reach there from 8%-10%, so it's a relative 25% growth.
Completely recurring our business models in the corporate banking industry. We have here a huge potential. We see that the need is even higher, just the execution lags again because of the current environment. We expect this to continue and to reach within the next years, a similar penetration of the corporate banks like we reached already in the savings bank industry. With the additional connection and integration of the mortgage services and other linked services and integratable services, even like evaluation, we see a huge revenue potential here on this sales platform. I said already that evaluation is a strong product area for our real estate platform.
We were able, even within the Corona environment, to sign up more partners for the Value AG services and based on the increasing numbers of business relations in the industry, derive the revenue up by 55% in the first nine months. While the first quarter was very strong with a growth rate of close to 100%, second quarter was weak because of the lockdown and the inability to access properties that need to be evaluated. Third quarter showed, again, a nice dynamic development here. The industry is keen on a reliable integrated evaluation service that we are able to offer to them. We are investing here heavily in software development, in building this platform, in integrating this platform with Europace. We still have to scale still with a lot of workforce because of the lack of digitalization of this industry.
we can't build as fast as we scale right now. Especially in the Corona environment, this was tricky as well because we saw quite the volatility in requests by banks for valuations, and on the other side, we had a growing workforce to execute this number of requests. the volatility costed us money. Corona and the crisis costed us real money here. we see that the strategy to offer the industry a one-stop solution for all their valuation needs integrated in their sales platform and in their execution platform is a great opportunity for us. It's a huge market we are tackling here. Okay. Housing associations, our traditional target group here, presents a stable success for the first nine months. Transaction volume more or less exactly in line with the first nine months of 2019. Revenue slightly up.
When you look at the quarterly results, you will see that we had a strong first and second quarter. Third quarter was weak. You can say a more intense holiday season, plus not a significant impact from the interest side. Interest rate were pretty stable during the third quarter. This industry reacts on volatility on the interest side. If interest rate changes, they are closing projects. A slowdown in the third quarter, not linked to any problems in the industry. It's a volatile market for us, and it was for a long time already. Overall, for the total platform, real estate means, let's say, still a pretty good revenue growth of 14% or gross profit 30%. A little bit slower than the credit platform and private clients, even when this is a growth segment. You see here the impact of Corona on the growth rate.
On the profitability, we already, end of last year, decided to invest heavily in the real estate platform because of their attractiveness for us, because of our strong position in the mortgage market. Let's say, we didn't expect to continue with this high profitability, especially driven by project business. Yeah. On the other side, the plan was to stay more or less slightly profitable. The -EUR 1.9 million for the first three quarters were not expected and are attributed to the Corona environment, which we see and which slows down too many of the projects or made it tricky for Value AG to execute the number of valuations which they could have done in the second and the third quarter. Looking forward, this will be a major growth segment for Hypoport in the fourth quarter and in the next years.
We will drive the speed of growth here up. Expect this to outperform private client and the credit platform in the midterm future. Growth rate and outperformance, coming to the second growth segment, which we have within our group. For the last five years, we invest heavily in software development and even acquisition of software companies in the insurance value chain. We are successful in integrating the technology, in getting in contact with our clients, in convincing our clients that the future is, for the whole insurance industry here in Germany, is Smart InsurTech and the SMART INSUR platform. We feel a strong sentiment in the market, and Corona made it even more clear to everyone. The need is visible in the day-to-day work now that the traditional way of how the insurance business in Germany is run is not the future going forward.
There is no other future than a fully digitalized platform for the 200 insurance companies. All the new incumbents, the insurtechs which try to compete, are not sufficient and not successful when they try to operate as an insurance company as a whole. The Lemonades and ONEs of this world are niche players, if even existing in the German market from the number of contracts which they sign up for. The traditional industry, the 200 insurance companies, need to integrate with these thousands of brokers and the millions of consumers on one digital solution. There is only one digital solution out there which is providing this, and this is SMART INSUR. The industry understands this. The industry is more and more committed on even migrating their sales on SMART INSUR. Just the execution of the IT project is terribly slow.
This, again, in the Corona environment, we see projects going forward that's slower than expected. This results in quite stable revenue and gross profit numbers for the segment. What you don't see here is that, like in the real estate platform, we are right now exchanging one-time revenue to recurring revenue on a fast basis. We don't want to have any projects anymore with the target groups. We want their transaction volume migrated on SMART INSUR and paid depending on the volume, which is on SMART INSUR, not paid by day or any other revenue stream. With the slowdown of the project on one side, and the reduction in one-time revenue, you can't see our success in the market here in the top line figures. Yeah. It's a pity. We expect it to be a little bit farther here as well already.
As you can see this in profitability, we guided that we will be breakeven this year. You see that the slowdown in the project and in the speed of the migration keeps us in small negative numbers, -EUR 1 million here for the first nine months. We are confident that there is no other future for the insurance industry. There must be a moment where the players in the market, our partners, start to act faster than they do right now. It looks like that they still need more pressure from the consumer side or new competitors. Let's say, the new market entrants on the sales side work with us as a platform, and if they are gaining traction, the traditional players will get under pressure even more. Much about the four segments and the update there. Total numbers of Hypoport, you notice already double-digit growth.
Profitability, let's say stable for the first nine months. This is in line with our long- time track of growing heavily, and we keep growing even in this current environment, which we see here with Corona. We expect that we will end this year on this record numbers, top and bottom line, and that we will keep growing in the next years. For this, we invested in the last two years heavily in key account resources, IT resources, and we keep these investments high even in this environment of Corona. From this, I would give back to the moderator to moderate the Q&A session, please.
Thank you. Ladies and gentlemen, we will now begin our question and answer session. If you have a question for our speaker, please dial zero and one on your telephone keypad now to enter the queue. If you are using speaker equipment today, please lift the handset before making your selection. One moment, please, for the first question. As a reminder, if you would like to ask a question, please press zero and one on your telephone keypad now. And we haven't received any questions at this point.
Okay. It's back to me to finish this call. Around the world, this is the English version of our podcast, please stay healthy. The second Corona wave is rising everywhere right now. Take care of your family. We take care of growing this business here. We will do this successfully, when we talk in the beginning of March, we know better how we handle the second wave in the world. We will finish this record year of Hypoport, we'll update you on our expectation for 2021. This will be a much clearer view how we go forward from there. Thank you, bye-bye.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect now.