Economist on lending: No big impetus from KIM change

Wifo economist Thomas Url does not expect a “boom” in loans after the adjustments to the exception quotas for housing loans. The remaining provisions of the controversial KIM regulation, which regulates the granting of housing loans, remain in place. As reported, the Financial Stability Board decided this this week.

The easing of bank quotas eliminated “unnecessary bureaucracy,” said Url in Ö1. However, one should not expect a dynamic impulse for the banking industry and the housing market.

According to the economist, the decline in housing loans is not due to the stricter credit rules, but primarily to the increased construction costs and higher interest rates. The KIM regulation is there to ensure that the real estate market does not overheat and that private households remain solvent when it comes to loan repayments and interest charges. In view of the sharp rise in prices and the resulting decrease in the sustainability of private households, it made sense to counteract this with stricter credit rules.

We have now reached a point where real estate prices have entered a correction phase. “Now it’s important to give yourself a little bit of observation time, and then I think you can move quickly towards easing,” said Url.

The Austrian House and Landowners Association (ÖHGB) expressed its positive opinion about the relaxation of the procurement regulations. However, there is still “clear room for further relief,” said ÖHGB President Martin Prunbauer.

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