applicable for the real estate sector: Buy without taking any serious steps to increase value, wait for a brief period and then sell at a premium. The market works completely differently in other areas, for example, in the industrial sector where you generally only generate a profit with value-creating measures. The past correction is obvious, but I wonder whether the past is really behind us or whether something else is on the horizon. Bernd Winter: I’d like to modify my criticism of opportunistic investors a bit. You’re not just looking at wicked investment property traders and respectable banks – and there is something else you shouldn’t forget: The low and zero interest rates that led at times to a negative interest policy resulted in a situation where money and leverage were free of charge. The market participants who maximised leverage and took high risks were the big winners for ten years.
investors purchased investment properties with virtually no equity and then sold fast – and created their own market. When you work with more or less 100 per cent debt financing, you are always in the red with a market correction. And that is exactly what happened due to the Ukraine crisis, not because the banks were suddenly financing less. In this respect, the present situation is not unusual from the long-term point of view and we shouldn’t really be surprised. It’s logical that Franz Pöltl is increasingly dealing with liquidators, and I don’t consider that very dramatic: Prices at good locations haven’t fallen as much as we can see from several examples in the first district. Anyone who made opportunistic purchases in clearly weaker locations at fantasy prices is paying the price.
financing in the past. And in certain cases, that could be true. But you can’t overlook the fact that we have a roughly ten-ye- ar zero interest phase behind us when financing could also be seriously presented at low returns. Naturally, these years also attracted a large number of opportunistic players who were too young to have gone through a full real estate cycle and believed interest rates would remain at the zero level while prices continued to rise. They were the first to get into trouble when interest rates started to rise in 2022 and are now our problem cases. Bernd Winter: I don’t think we should exaggerate the role of the banks here. In reality, what we are experiencing today is a normal market correction. The zero interest phase led to a situation where it was almost a “must have” to buy a few investment properties – whether as a retirement cushion or as a type of financial status symbol. We then had a completed overheated market where a new class of
Gabriele Schiemer: We saw the emergence of a business model that is really only
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