27. September 2024
In July and August there was an increase of 37 percent in real estate loans compared to July and August 2023. © Photo: Freedomz – stock.adobe.com
Interest in housing financing is increasing again, albeit tentatively. Raiffeisenlandesbank (RLB) Upper Austria reported this in a press conference on Friday. “We seem to have bottomed out,” said General Director Heinrich Schaller.
Matthias Reith from Raiffeisen Research attributes this primarily to “rising household incomes” rather than to the interest and price situation. He expects that home ownership will become more expensive again by 2026 at the latest.
The number of real estate loan deals increased by 4.6 percent this year compared to the first eight months of the previous year, said Schaller. This is mainly due to July and August, where an increase of 37 percent was recorded compared to July and August 2023. Government support measures and interest rate cuts from the ECB contributed to this.
Schaller expects this trend to continue this year. Nevertheless: The total volume of new loans in the Raiffeisen Banking Group Upper Austria was 384.1 million euros in the first half of 2024, a third of the comparable period in 2022 (1.12 billion euros).
Home ownership in Austria is becoming cheaper again, albeit only at a gradual pace, said Gunter Deuber, Head of Economics & Financial Markets at Raiffeisen Research. Since mid-2022, the price decline has amounted to 5 percent, or even 15 percent when adjusted for inflation. The situation has eased, especially for used properties, while new apartments remain expensive.
“There has been a silent correction on the Austrian real estate market over the last two years” and “the majority of the necessary adjustments are behind us,” says his colleague Matthias Reith, senior economist for the Austrian residential real estate market.
Raiffeisen Research expects the ECB key interest rate (deposit rate) to be 2.25 percent by the end of 2025. “Real estate loan interest rates in the region of 3 percent are now possible again,” says Deuber.
