Ladies and gentlemen, welcome to the webcast results Q3 2023 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. May I now hand you over to Ronald Slabke, who will lead you through today's conference. Please go ahead.
Yeah, welcome from my side as well to the Q3 numbers. And just start with the first annual thing. It's 2:00 P.M. here in Germany, and normally this is a German webcast. Today, we decided to do the English. I have to leave to an investor conference today in the late afternoon, and it wasn't possible to schedule two different meetings for two different languages today. So we decided to try and do it once in English. So we are happy to hear your feedback, especially how many of you would prefer to still have the German version parallel. So, as with your feedback, we will decide how to go forward in the near future then. Okay, so let's get to the results of the third quarter.
You're aware of this, we published already our numbers. The Q3 was, let's say, about the second quarter, which was slightly disappointing, but still below our expectations. When you see the distribution of our revenues in the three different industries that we serve, you get the feeling that again, it has something to do with the residential mortgage market here in Germany, and what's going on there. The business models more or less linked to this very special environment we are in right now.
But just to give you a quick overview, if you're still undecided, if you want to listen to the whole podcast, Q3 was a quarter with a slight increase in revenue. Let's say, let's call it a slight increase in profitability. Still, a small loss, after the second quarter, which was the first loss-making quarter in this year. And after a good start, our first quarter, which was above expectations. And in this, we saw some good news. We saw a slightly positive trend in this residential mortgage market, but just, let's say, not the dynamic that we would have expected after the summer.
We see the second quarter in a row in our insurance business profitable, which is a great development. And we started to restructure our valuation business because this was hit hard in the second quarter, and there's a lot to do right now. Still some, let's say, bad news, negative impacts we saw in the third quarter. So still there's a lot of noise from the government what they expect to do, wanted to do, may do, which, let's call it distracts consumers in the process of making decisions. And as well, we saw a decline in dynamics in the personal loan business, thanks to the declining general macroeconomic outlook here in Germany.
So banks, especially the banking side, gets a little bit more risk-averse on the personal loan business. And with this impact, we see, let's say some changes in the market environment here as well. So all in all, Hypoport is mastering this crisis, and I can tell you already right now, we are gaining market share in this turbulent environment right now. So talking about turbulent environment right now, we start with our core market, residential housing market here in Germany. What's going on? What changed Q3 compared to the previous quarters? So let's start with which dynamics stay intact. So we see a stable amount of trigger events in this market. So life events, which people in Germany triggers to think about acquiring their first home and moving their family there.
We have stable birth rates, we have stable divorce rates, and we have stable interest of the whole society in homeownership. On the other side, the one typical way to, as a surrogate, to not buy, to rent, was the option to rent. This market is under even more stress than the homeownership market. The new construction more or less vanished. We just finished renting units right now, which were long planned and long awaited. We see a stable, massive net migration to Germany, even with the current turbulences and, hopefully, a change in the quality of migration that we see because the German labor market has a huge demand, looking on the next ten years.
The high migration numbers we see doesn't fit always to the need of our labor market. This topic is now more valid than ever and is addressed on all political agendas. What we see is that especially private landlords try to exit the renting market. As soon as a renting contract is finished, someone moves out. A lot of smaller landlords put their apartment for sale to self-occupying families. This is a great development from our perspective. The reason for them to do so is that the massively regulated rent environment is not attractive anymore when you see the current returns you can risk-free achieve on government bonds and so on.
Especially pressure on the regulatory side let lots of landlords, let's say, try to realize a massive profits they made this in this housing market and try to exit now. So the lack of supply and the landlords who try to move out and the huge demand leads to a sharp rise in rents, especially in the metropolitan areas. In Berlin, we see rent rises of close to 20% on a yearly basis. This is massive, and this describes how impossible it got to find relief for your change in housing space in the renting market.
So the need, that's not only a wish to own your home, it's more and more as well, a need to own your home because of the lack of supply on this historically efficient renting market here in Germany. The affordability during the past quarters, I would say all in all stayed stable. We see that the interest rates are now the fourth quarter and the growth more or less stable, plus, plus open 1%, you can say, but it has a volatility of around 0.2, 0.3% per month. So if your time is well, you have stable interest rates over the last 30 months now.
Real estate prices were trickling down since the beginning of the year, after a sharp decline end of last year. The stable interest rate and more or less stable real estate prices, in general, you can say the affordability stayed the same. Incomes are improving in Germany, so all in all, the affordability for ownership is stable. So hearing this, you would say, "Okay, so a number of transactions should go sharp up, then the last events, the triggers are there, and more and more people are waiting to do something. Renting market is closed, affordability is stable, so people should act." What keeps them or what lets them hesitate are a lot of initiatives from the political side to relieve their burden.
Just this, let's call it, topics put on the agenda as well. It creates a certain uncertainty how long you have to wait to actually benefit from this, what is on the political agenda. So how long does it take to implement this? And when it's coming, and should I wait or should I act right now? So we have discussion about the property acquisition tax here in Germany. We have constantly discussion about subsidies, adjustments, or proposed adjustments to credit programs for first buyers. Let's say, all this is on a constant basis a very hot topic in the news.
Let's say, let people hope that in the near-term future, for their need, there is a better solution than right now. This is, for now, keeping the market to with a high dynamic normalize again. Just some underlying numbers to make sure that you're aware of the scale of the situation. The population in Germany is growing heavily thanks to migration. So in the last few years, more than 1.3 million people added to the population in an already stressed housing market. We see that, currently, 47% of the population wants to own their own property. So the share of people who are fine with living in a renting space is keeps declining.
Rents are up since 2020 by 21%, as an average in Germany, as I said already, and especially in the metropolitan areas, the dynamic is much higher, even when there's a heavy regulation on this. And supply is down. We see a decline of 9% in the last 3 years. And when you look in the metropolitan areas, it's even more intense. The number of apartments available to rent, especially for young families, is extremely limited. So more or less not there. Interest rate, when we talk about interest environment, is unfriendly. We talk about the 4%, 10-year fixed interest rate loan here in Germany, actually 12 years and 15 years, for a similar price.
I know that especially our Saxon listeners, you would be happy if you have interest rates of 4%. Yeah, so for Germans already, this 4% feels now pretty expensive, taking into consideration that, two years ago it was below 1%. Yeah, this still needs the adjustment of the triggers at least to make the decision to acquire a home, even then, when this more expensive than it would have been two years ago. Yeah, and, posting on that, I told you already, and, looking forward, we don't see any acceleration there. It's actually more and more indicators shows that, even the trickling down is, it's slowed down to just perfectly stable market.
Let's say, this is a question of weeks or months, the market is turning and prices start to pick up. I think this may be as well as something a lot of people right now, which were triggered in the last eight months, are waiting for. So they try to find perfect moment to buy. Negotiations with potential sellers and try to find the optimization. This optimization, let's say hopefully nobody misses, the perfect moment right now. Okay, a little bit facts and figures, yeah, and visualize what I just talked about. You see the real estate, you see the prices, you see properties are actually a little bit by now.
So, the German market was all in, about 70% triggered, and you can even month, of, to the number of people that have reached out and want to sell home. Just, incoming, it's normally normal. So there's a harder to price. The way we have to other two, they are, they are, right? As well, how the market, how low new constructions are for how less they pay in this year. So waiting, for the first time, that's something that, okay. So rent supply, we saw some recovery in the last quarter this year, but this is, yeah, in reality, it was never as fast as when I was to find that. So this all led to a slightly increase in mortgage volume in this market.
We saw a +1%, Q2 to Q3 in the figures of German Bundesbank. It's a pretty weak September, to be honest. So we found the bottom line. We found the baseline, and in this market, the different business models of Hypoport are a core talking point and the core solution to, let's say, to handle this extremely challenging situation for everyone in this market. So how we performed? We start, as always, with our Credit Platform s. In the center, Europace, especially for the mortgage business, saw a +7% quarter two to quarter three in transaction volume. Compared to +1% Bundesbank.
As I mentioned already, let's say on a stable volume. So, while especially in dynamic environments, we see always a time lag between what we report and what Bundesbank is reporting. So Bundesbank is typically a couple of months behind us. In the stable environment, you see the market share gain, which we achieved. And this is the plus 7% overall. We can now look a little bit more in details on the side of the usage of this mortgages. Here we see that, and Bundesbank doesn't disclose their mixture of usage of the mortgages, so we can't compare. We can just compare with ourselves.
We see that we are on a historic low level of new mortgages for new constructions of homes or condos. This is something which is, I would say, a huge potential for the midterm future. Currently, this is what happens on the Europace system. We are able to predict that less than 4,000 homes were financed in September. And when you compare this to the expectation of the German government that they want to see more than 33,000 units built per month, then you see the excessive gap we now face on the construction side.
Still, there's a lot of construction ongoing, but we see that this, what is financed, what's going to come in the next 24 months. And this is on a historic low levels. So this is what we see right now as well. You can say with this market environment we are operating in is not sustainable for a society when you look on the new construction side... Similar is the refinancing market. Right now, 7% of the total mortgage volume here on Europace. Historically, it's between 15% and 20%. As you're aware of, Germans usually finance for 10 years plus, and they have to renew after this 10 years plus.
With the very special situation of the interest rate development in the last 2 years, we face a period where the longer durations wait to the end, while they previously refinance after 10 years. At the end, it's often 15 years. So, we are now in the middle of such a transition period where people with longer fixed interest rate periods wait as long as possible, while they previously acted as early as possible. After this transition period, and this will be latest in 2027, the mortgage volume on the platform will automatically rise again, and the refinancing volume will adjust to the historically normal level.
And then in case of interest environment, it may come earlier or, it may be even more intense, depending where the interest rates are. Okay, as well on the mortgage side, building finances. So there isn't a real good word for this in Germany. A product which profited last year from this uncertainty in interest rates, and this now the market is down 7% quarter-over-quarter. And as well, we see a not very booming market there, for this product to secure even longer interest rates than you do with your fixed interest rate mortgage. Something to mention, and it's part of this only plus 7%, you can say.
We were successful with our largest client, Deutsche Bank, to migrate their branch business under the brand Deutsche Bank end of the second quarter. And we expected actually some positive impact from this already in the third quarter. But unfortunately, and this is, there are rumors in the media that went even up to a German Parliament for discussion. They started with some internal IT problems, and especially the payment processes as well on accounts, but as well on mortgages are disrupted right now.
And with this, challenges in their processes, they, they don't contribute to our growth as we would have expected this. So, after Deutsche Bank and the commercial banking side, here, some good numbers from cooperative banks and savings banks for the last quarter. +19% on the cooperative banking side and 13% on the savings bank side on a quarterly basis. So they, they strongly gained momentum, you can say, in this market. Together, close to EUR 5 billion already, a third of the total transaction volume of Europace now. And, an ongoing success story for them and for us.
So together, we are digitizing their sales efforts in mortgages, and they get more efficient this way, more competitive this way, and gain market share while others may struggle right now. And final report is safe. It's a huge potential. Jointly, the sector represents roughly 60% of the total German mortgage market. And with the third only on the platform, you see the potential already from this perspective. And with our ongoing success in both of the sectors of migration, we will keep going forward and take market share. So all in all, you can say, mortgage market it is as it is.
But Hypoport is taking the opportunities which are in this market, and is gaining market share. Even then we were increasing our transaction fee starting on first of July this year for the broker business. We had to adjust underlying assumptions about the risk of this market, the volatility of the market, and the transaction-based pricing model is linked to the volatility, as you can imagine. And we had to adjust this, and thanks to the huge support and the fast development in the last years of new features which we put into the platform, the price increase was well received by our clients. Okay, next market.
Within the Credit Platform segment, personal loan business, Q2-Q3 flat from a transaction volume side. As I mentioned already, the market for personal loan got more challenging in the first quarter because of the changed macroeconomic outlook. We talk about the recession in Germany right now, even when it's just a light one, but the uncertainty is increasing and the banks thicken their credit rules. With this thickening of their credit rules, the chances to transact personal loans are declining. Especially with our focus on restructuring loans of consumers, this gets a little bit more a difficult market environment.
Good news on the other side, we keep rolling out in lots of banks, especially in the cooperative banking sector. So we are gaining sales activities on the platform. So parts of the challenging market environment, we are able to compensate just by taking market share. So next segment, Corporate Finance . Yeah, with a strong focus on providing access to government programs and subsidies, and then structuring the whole financing of the projects. Here we saw a decline in new volume for projects in third quarter, which is typically seasonal because it's a holiday season, so not so many new projects are started. So nothing to worry about, I would say for now. But in general, it's as well a market which is affected from macroeconomic outlook.
Even the subsidies, German Mittelstand is reconsidering their investment in innovation projects when the outlook is changing. Good news, I would say, for us, from a strategic perspective, there is a huge transformation necessary for the German Mittelstand. You can say more or less, every business has to transform and fit into a new, let's say, legal structure of climate goals and autonomy regarding value chains, which are on our political agenda, and with an increasing level of subsidies available to do so. It's just a question of time that there is an increase in market volume here, even when in the third quarter we didn't see this.
So total performance of the whole segment, including all product areas, you can say stable revenue side and, slightly increased profitability. While we saw a positive impact from the mortgage side, we saw in the quarterly comparison, a negative impact, from personal loan and, Corporate Finance business. The ongoing, focus on, efficiency, cost efficiency, let us gain profitability in the quarterly comparison here. The outlook, yeah, we revised, our group outlook, because especially in the, private mortgage market, we didn't see the, expected, dynamics, in an improvement of the, market conditions. And, it changed our outlook, to, let's say, for this year, a stable market environment, and, revised, our expectation for this.
From today's perspective, yeah, let's say, we see that this crisis environment is still there. It's still ongoing. The longer it takes, the bigger the chances are that the concentration, especially on the sales side, is improving. And with this, the competitiveness, especially of the larger Europace partners, is improving, and the stress for the banking sector is there. And so the need and motivation to migrate to Europace is higher. So the longer it takes, the better will be the outcome in a couple of years for us. Okay, private client business, as well, mortgage linked heavily our Dr. Klein.
Klein franchise network, where we generate leads online, manage the product supply side, and thanks to Europace, offer digital processes for the advice process for our franchisees. What happened here? First of all, Dr. Klein was able to grow quarterly, quarter-over-quarter by 7%, so outperforming the market as well, heavily. When you look on the monthly numbers, you can say, market share of Dr. Klein in September was on a new record high. And this, in this challenging environment. And this is thanks to this, the let's say, the resilience of the franchise network, where local business owners do better decisions than centralized organizations, you can say.
Yeah, they as well declined the numbers of advisors still, because they as well expected, like we do, that this crisis will, or the recovery of this market will be faster and more dynamic. And, when they see that the market is, more or less just, +1% stable, they can take market share, but they can't keep all the advisors which they had, still from the boom effect. So, in, with a certain level of delay, they adjust as well here. But we see that, let's say together with them, we are able to outperform the rest of the market.
The agents or the advisors, which are employed by banks and sit in branches and wait for clients to come, or the more loose networks where small advisors just mortgage needs to larger organizations. So this such a tipping only this is something which is vanishing in the market right now. So Dr. Klein is structural taking market share here, and he goes the same. As long as this this market environment is as it is, Dr. Klein will relatively be stronger in this market. Stronger top line growth for this segment. So Private Client was able to achieve in line with the transaction volume growth as well as revenue and cost profit growth.
Thanks to a very strict cost management, they were able to increase slightly their profitability and be one of the very successful business models in this current market environment right now. Okay, after this positive perspective from Private Client side, we are coming to real estate, something where we expanded heavily in the last five years, and where this current environment hit us the hardest, you can say. You're aware of this. We are serving two target groups here: homeowners and institutional housing companies, especially the municipal and corporate owned. With a lot of different business models, which we developed or acquired excessively in the last years. So different business models perform in this market environment quite different, you can say.
So it's, you can't look on the segment just from a summarized view. You need to go a little bit deeper. First, Property Sales Platform has a strong position in the branch networks of the savings banks and Deutsche Bank and in increasing a number of clients on the corporate side. It could increase its transacted volume. So that's a positive side. The ERP system for housing associations, which is part of this product area here, could gain a huge momentum and gain a lot of contractual partners, which needs to be migrated on the platform right now. They are getting bigger.
They are like getting larger housing associations, and with this, the projects get longer, so the revenue stream comes a couple of months later. So in total, a positive development on the real estate agent side and, as well a positive, but a timely delayed, development on the housing association side, brought us to a state of the revenue here in this product area. In the world of valuations, we were a pretty aggressive market player up until the crisis started. And had done first in last spring a regulatory event where the regulator canceled the approval of media inspections. And we had to heavily change our resources and processes, and we're still struggling with this.
When regulator at the end of last year changed, the product mix in the market heavily, and this all in a market where you can say only 50% of valuations are needed anymore when you see the total market environment, reported by Bundesbank. So, yeah, a lot of turbulences from the market, plus regulatory events, and it hit us in the wrong moment. We were on a growth track, and we are heavily investing in people and infrastructure, and had already last autumn to restructure the business and, thanks to the changes in winter, do this again right now. And it's tough, it's costly.
Yeah, just we see that the rest of the market is struggling as well with this environment, and the strong link that we have to our mortgage operation gives us an unfair advantage, which we couldn't monetize by now. But looking forward from a strategic perspective, we need to be able to make this business more profitable than everyone else at scale. Just the turbulences needs to be handled well. And this, we are working on this to improve it and bring the right people to the right products here right now. So, painful development, I can tell you, but we are working intensively on this topic.
Yeah, last struggling environment, financing for housing associations, and a very business model where we are in for a long time, that we are growing for a long time. Together with the industry, which needed more and more capital, our usual transaction volume per quarter was around EUR 500 million. And this started to decline last autumn. Since the second quarter, we are on an all-time low level here right now because the industry is in more or less a freeze mode. Last year, they stopped new developments because of a regulatory environment, plus interest rates. This year, you can say they even frozen most of their what's the right name for energy efficiency projects.
Optimization of the current household stock. Both types of projects are now on hold because of the uncertainties in the regulatory environment. What is certain is that under 2020, 2045 the whole three million units of this industry needs to be energy- or carbon neutral, and much more energy efficient than it is right now, and it needs EUR 500 billion in investments. It's a simple division. This is something around EUR 23 billion-EUR 24 billion per year that needs to be invested. We are the market maker in this, and see roughly a fifth of the volume, and currently this topic is not addressed, and the challenge is getting bigger each quarter, and then nothing is happening here.
Okay, on a quarterly basis, slight plus, but we are on a so low level that it's depressive to even talk about this. The outlook is the more important part here. So in general, you can say it was a stable quarter for the whole segments, so the summary of all these activities. But as I mentioned already, and as you are aware of, and then you're for a long time followers, Q2 was a very weak quarter for the segment, and we are still in this trouble. And in the sense of this is unfortunately a variation. There's a lot of challenges while the housing associations with the ERP system and the financing are something that will prosper by certainty in the near time future.
Okay, last segment, insurance business. As you are aware, we are addressing three different product areas, the private insurances, industrial insurances, and occupational pension schemes. These three, we address as marketplaces and additional services here in this segment. On the personal insurance side, we still are seeing positive trend on the migration to the platform from our clients on with on-premise solutions that we acquired. Plus 3% and on a quarterly basis is a solid result when you look on the weak dynamic, especially in the last year. What we see is that the need for digitalization is just obvious and the increasing stress from the revenue side lead more and more organizations to look for this efficiency gain, which we are offering.
This, without a high investment from our side in new ideas and new projects to accelerate this process. So, yeah, a positive development. We are progressing, even when it takes long, and we still have EUR 4.5 billion of payments to migrate. We are getting forward here. Industrial insurance, we provide the ERP system for 6% of the market and started to develop a marketplace for this insurance risks. Corify is right now signing up the first major clients. So we got the first signatures after two years of development with this industry and our ERP partner. And we see a positive dynamics here.
We expect more of our clients, plus as well, industrial insurance brokers, which are not using our ERP system, to join the marketplace and to initiate here something new for the German insurance market, and especially in area which is under-digitalized. So there's a huge potential to massive efficiency gains when it comes to finding the right underwriter for an individualized industrial risk. So last area, occupational pension market, the digitalization between the employee, the employer, the HR department, the insurance broker and the insurance company, massive dynamic on a quarterly basis. We are now at 1% market share. You see the potential, 99% are underserved. We have one core competitor here, and we are really growing.
In the third quarter, we could sign up another large new client, which is right now in migration, which will help to accelerate this migration to the platform. Of this pretty attractive market environment for us, high complexity, lots of parties in the market, and we have, with a great technical solution to integrate this all. So really nice momentum and part of the success story and the positive development of the whole segment. Yeah, and whole segment with some seasonal effects, to be fair.
So it's not, don't expect for every quarter this growth rate, but the second profitable quarter in a row, and a pretty good base to achieve the goal for this year to be profitable. And with the underlying dynamics in all three product segments, as well, something that positive outlook, even when we will keep trying to move fast here, then this industry is pretty attractive right now. As well as when you just look on the stability they provide to us and to the economy, as well, when you see how much capital is going in this market right now. So the digital infrastructure for this market-...
Something will be very, very long term. Okay, this where the deep dive in all three, all four segments. As a summary, yeah, let's say more or less stable results compared to the last quarter on an extremely low level, especially when you look on profitability. We are just balancing what we are investing in new ideas and keep the practice project ongoing with close monitoring of the traditional market, and on the other side, possibly the business which has to provide. Yeah, on the long, on the long range, you are aware of this, we will not see the, let's say, new record year this year. We will be low 2021, 2022 after this sharp change in the housing market and the declining volumes there.
But we are well on track on quality growth, gaining market shares in most of the markets where we are in right now here. With all our ambitions in the different projects, we prepare for the period after the normalization of the housing market here. We keep our costs under close monitoring, stable since the first quarter. We compensate structural increases by inflation with additional efficiency gains. And headcount of the Hypoport Group is still slightly declining on a monthly basis. So we are focusing to get as fitter as an organization to optimize all our business models and use the current market environment, external and internal, to strengthen us.
So, outlook, yeah, and this is the logic. It's a core focus on what's going to happen in this market. Yeah, we started roughly a year ago, you can say, a little bit more than a year ago, with announcing that there is a crisis ongoing, a special environment, and we expect that it may last between 4 and 8 months. So the 4 months are now passed. Sorry, 4 and 8 quarters. The 4 quarters passed now, and we are still far from normalization. And yeah, so looking forward, we still don't revise the 8 quarter prediction. So we still think that it's possible that when we talk in a year, we are on a completely different market volume level again from where we are right now.
So why, why we think this? We simply see that there is more pressure, transaction not done of trigger families, more pressure on the side of people who want to sell their apartment. It's because nobody's living there anymore. And there's this mismatch in the market. This low liquidity in the market needs to—There's pressure on both sides, because both wait for the right moment. And additional families are triggered every month. Additional properties come to the market every month. So this pressure is just rising, and it, in some moment, triggered by whatever may be necessary for this in the near future, is going to fast and to fast change that.
Not like it is right now, where we are more or less just stable in the bottom of this whole situation. So we see a normalization there. Plus, we see our market share gains in the different business models to each other, and exceeding of even the trend which we expect from the market side. And from the market side, still all necessary investments which needs to be done in the whole housing stock here in Germany to achieve carbon neutrality, to achieve an independency of gas and petrol from Russia is in-- The necessary investments are not in the current volume.
And just to achieve part of these goals, we need to get to additional EUR 20 billion per quarter in investments, besides the normalization of this market. Yeah, and as mentioned earlier, the current volume of financing of new homes, so providing new living space, is unsustainable. So something needs to happen there. And so costs need to get down, and efficiency gains in the building industry is unnecessary, but as well, the regulatory environment is still not a fit. So the regulatory increase the requirement at the cost of constructions in this period since 2014, which you see here. And yeah, the as necessary to come to a decline, to fit to the current especially interest environment.
Okay, so with this in mind, looking forward, we revised our this year expectations. So we will be down in our, on our revenue side by up to 25%, and we will deliver an EBIT of something between EUR 10 million and EUR 15 million. This is only because of Value's non-recurring one-offs, which we have to realize in the, in the last quarter. So this- Yeah, it's a struggling, it's a, it's a, it's a painful year, from a financial perspective, for Hypoport. From a strategic perspective, from the look on our different market positions, it was well used by now, and we expect a positive trend in the next years, you know, when it comes to monetizing on this positions that we achieved here.
Yeah, and that's why we are solid with our and we stay with our long-term goals, double-digit growth after this crisis is in our base numbers and starting in 2024, it is. So from the current level, there's just one direction, then it it's going to go up in the next years. So thanks for your attention by now, and now I hand back to the operator to moderate our Q&A session.
Thank you. We will now begin our question and answer session. If you have a question for our speaker, please dial star one one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question is answered before it's your turn to speak, you can dial star one one again to cancel your question. Once again, that was star one one on your telephone keypad to enter the queue for a question. One moment for our first question, please. Our first question comes from the line of Gerhard Orgonas from Berenberg. Please go ahead. Your line is open.
Hello.
Hi, good afternoon. A couple of questions, please. First, on the real estate platform, did I understand correctly that you are undertaking more cost cutting at the moment? Or is this, you know, is this kind of, you know, minus EUR 4 million-EUR 5 million run rate that we should expect going forward until the market picks up? Secondly, also, Scout24 made an acquisition recently called Sprengnetter. Could you maybe contrast your offer of Value AG, compared to Sprengnetter? And then my third question would be about the one-offs in that's really expecting Q4, is that around about EUR 15 million from a reversal of, earn out? Is that correct? And the fourth question is on your balance sheet. It seems like that your lease assets have reduced significantly in the third quarter. Is that part of your used subletting property, or?
So okay, yes, where to start? Okay, cost, cost cutting. Yeah, let's say, the cost cutting is part of a massive change in, let's say, in how we do the business, which resources are used for what. So, and, it started already in the third quarter, and it's an ongoing process for our valuation business, for the next quarters. These are massive changes in the environment and, to adjust as an organization is a challenging path, unfortunately. And, but part of this is reducing the cost. Yes. And it just started. Yes, Scout24 acquired Sprengnetter. Yeah, interesting move I would say. It's, Sprengnetter is an, is a business model, around valuation in, in Germany.
And a company which has a pretty strong link in the real estate industry, you can say. They are as well present in certain larger banks. So we know each other. We see the, let's say, strong services and products they offer, and we are cooperating in certain areas even with each other. So we don't treat each other really as a competitor, more as someone who has interesting different perspectives and additional services. So yeah, let's say difficult to compare Value AG and Sprengnetter directly with each other because the overlap in the product areas are small.
Value AG core focus, credit industry, yeah, and let's say the mass market and, Sprengnetter, core focus, I would say, real estate industry. Yeah, one-off, let's say there will be multiple one-offs. A major one, you described already, and, your rough guess may be right. We still don't know to be honest, because it depends on the performance of this year of the acquired company. So, but we talk about a substantial a non-recurring event. And some more, including ongoing restructurings, where we are still not separate the cost of them from our ongoing business. We will give them more transparency at the end of the year.
And the last was development on the, let's say, sub-renting side, let's call it. So, this is what you see in our numbers, regarding, let's say, the asset side and, the appreciation, depreciation, is, let's say what we just used in our renting space. On the other hand, we try to optimize this, so, as well, we got rid of some, renting contracts with some, one-off payments. And, plus what is more difficult to realize is, we as well sub-rent and achieve there, some, income streams, which are not part of the, let's say, which are not, how to say, equalized, with the, according cost. So we reduce our renting space right now.
This is not just because of the declining numbers of people. We still see that a lot of Hypoport teams and business models work pretty well remotely. So the number of employees in our offices is extremely low still. And so we optimize the efficiency in this area as well.
Thank you.
Thank you. And one moment for our next question, please. And our next question comes from the line of Marius Fuhrberg from Warburg Research. Please go ahead. Your line is now open.
Hello, Fulberg.
Hello. Yeah, thanks for taking my question. First one on the Credit Platform , and we observed a rather flat revenue quarter-over-quarter, while the transaction volume went up. And I understand that this might be a reason for maybe unfavorable product mix and also REM Capital being down quarter-over-quarter. But considering that, the take rate on volumes from independent brokers, which you increased in Q3, I would have expected a little bit stronger EBIT margin, and especially also, yeah, a stronger improvement there. Could you maybe explain on this, and give us a little bit more color there? And the second question is, with regards to your AVM, which is now live, as you stated. How's the regulatory framework there?
Are banks already allowed to use it, or is that yet to come?
Yeah. Okay. Let's start first, product mix. Yes, absolutely. Yeah. Yeah, we saw a declining volume in person- now, let's say we saw a stable transaction volume in personal loan business. To be fair, a declining, a slightly declining revenue there, because of the duration. We saw a decline in revenue on the REM Capital side, and this affected the total revenue development. A plus, what we saw in Q3 compared to Q2 especially, is that consumers reduced the fixed interest period faster than the previous quarters. So, and this is stable interest environment, to be fair.
So we dropped more than half a year in average fixed interest periods, which cost us as well a couple of % in revenue share. And this it average over all transactions. So the bank branch transactions and the broker transactions, this was as well as you can say a negative impact for the total revenue growth. So don't ask me why consumers started to finance shorter on such a short period of just three months, but they did during the summer. Yeah, okay. That's so— And AVM model. Yeah. Actually, we are live with our third generation of an AVM model.
It's integrated in Europace, and it gives transparency to the mortgage advisors about our perspective on the value of the property. And we provide this as well to banks if they want. For now, banks are already from a regulatory perspective forced to stay with their AVM models. Ours is, let's say, competing and giving a different perspective as well. Ours is predicting the outcome of other AVM models and the probability of, let's say, trouble coming from the valuation side for the mortgage process. But it's still not used by any bank as their regulatory AVM model.
And from this, we are unfortunately far away, because this is a long process with the regulator for bank to switch from one AVM model to another one. And as well, for us, it's for now more important that it's visible along the whole value chain, and that it gets better and more accurate, and that it learns because it's AI and gets just better, and the rest will come by itself.
All right. Thank you very much.
Thank you. And once again, as a reminder, if you would like to ask a question, it is star one one on your telephone keypad. And one moment for our next question, please. Our next question comes from the line of Jochen Schmitt from Bankhaus Metzler. Please go ahead. Your line is open.
Hello.
Hello. What's up? Guten Tag. Thank you very much. Good afternoon. I have four questions, please. Firstly, your revenue outlook for 2023 seems to imply a quarter-on-quarter volume decline at Europace, or have you otherwise implemented some cushion into your outlook? Second question: Which additional annual cost savings do we expect from the current restructuring of the real estate platform? Thirdly, is it correct to assume that you do not expect any goodwill impairment charge for this business year, given your EBIT outlook? And last question, will the release of the earn-out component be tax-free? Probably, yes, but I'm not sure. Thank you.
Yeah, yeah, this was fast. So first question, yeah, I'm not aware that we disclosed our revenue development expectation for the fourth quarter, and that we expected a decline. So this—I'm not sure how you come to this, so yeah, how you come to this conclusion, let's say.
I mean, the 25% decline, the lower end of your revenue target for 2023 versus last year, seems to me to be rather cautious, to put it this way.
Yeah. Yeah, yeah. Let's say it is. We don't want to revise it again. So that's, and this is for the total. It's for the total group. Yeah, this is so all revenue, let's say, all segments and all business models. So that it's. We didn't challenge this, let's say, yeah. We wanted to make sure that everyone understands that it's a challenging year. We don't see a recovery of the market. Expect that more or less is what you saw in the first three quarters continues. Yeah, it's not more. It doesn't try to describe an exact number behind this. The 25 is a rough number.
Okay, thank you.
So the first question was, do we expect goodwill to be, not what's the English word for inaudible? In a negative sense to be realized? No, we don't do because we don't change our long-term outlook for this business models right now. The current turbulences this business model is in is nothing that affect our long-term perspective on the business model. So your second question, the second was, if we expect already significant cost reductions in the fourth quarter, let's say.
No, annually, the annual cost savings expectation for the real estate platform due to the current restructuring.
So, I would say, for the total segment numbers, it's the cost savings of our valuation business is not relevant. It's compensated as well by certain increase of costs in growing business models there. So it's on a segment basis, you will not see a significant change in the fourth quarter. And for next year, I would say it may as well be compensated by growth in other product areas. So I would not expect-
Okay, thank you.
Too much changes there.
Okay, thank you. Last question was on the release of the earn-out component. Will it be tax-free?
Um, yes.
Thank you very much.
You're welcome.
Thank you, and one moment while we take our next question. Our next question comes from the line of Philipp Häßler from Pareto Securities . Your line is now open.
Hi, Häßler.
Hi, Slabke. I have two questions, both on the Credit Platform . I just wanted to make sure that I understood that correctly, because revenues were stable quarter-on-quarter. But at the same time, I think you introduced the price increases, so why was there no bigger impact to be seen? Have I understood that correctly, that it was offset by REM and also by the consumer loans business? And then secondly, on the guidance for the Credit Platform , you are guiding a slight decline, but after nine months, revenues were down by, I think, about 30%, if I calculated correctly. Is there a special reason, or is it just... Yeah, maybe you can explain why do you expect a slight revenue decline for this, for the Credit Platform for the full year? Thank you.
Yeah. Okay. Yeah, I would say you raise the question of revenue stability versus +7% transaction volume that just comes from the other product areas is true. Plus this, what I just mentioned about a change in duration, which was pretty intense in the first quarter. So a fixed interest rate period, not duration, but fixed interest rate period, which led as well to a couple of percent of less revenue. And yeah, we increased the price for the broker business by an average 20%. And let's say this, this, how to say? This was compensated by a lot of other developments and lower visibility on a quarterly basis.
To be fair, but this is really getting minor. So, the products calculated before the price increase, they're not affected by the price increase, even when the transaction was closed then in the first quarter, but calculated in the second quarter already. So you have as well, in the beginning, a couple of weeks of transition period between the two pricing models, for instance.
... So that we should see a bigger impact in Q4?
Yeah, I hope it's not compensated by a lot of other things.
Yeah, yeah, sure. But like for like, there should be a positive impact or a bigger positive impact in Q4 compared to last-
Like for like, it's just there. Yes.
Okay.
So and second question was regarding the outlook and the question about this slight decline. To be fair, it is, let's say, we see this, we see a certain level of uncertainty, especially with the Corporate Finance business, which is heavily closed in the last quarter. So, there is an uncertainty of our revenue numbers for the whole segment. Even then, the mortgage business and the personal loan business is pretty well predictable. And we didn't revise this because we thought this as a minor topic on a segment level. Yeah. But yes, the wording, so let's say, slight decline in revenue, is you can discuss this.
Okay, understood. Thank you very much.
Thank you. As a final reminder, it is star one one to register for any questions. As we do not have any more questions registered, I now hand back to our speaker for any closing comments.
Yeah. Thanks for the questions. As I said in the beginning, we would hear from you some feedback if an English-only call is acceptable time for you, or if you would prefer to have a German version in the future as well. So, I'm heading to investor conference now. There's a lot ongoing right now in the market and in Hypoport. So, we will close this year as good as possible, and we are prepared for the near-term future. So we will, we will hear again here latest in the beginning of March, and talk about how we are going to tackle this achieve this growth, which is expected from us from beyond double-digit growth every year. And, with some headwind in addition, a fast new record news coming for Hypoport.
I look forward to talk to you here and have a good time in the beginning.
This now concludes our conference. Thank you all for attending. You may now disconnect.