Round table
upcoming interest rate reversal. In these cases, it’s understandable when the banks pull the plug. But there are also many good real estate compa- nies and investors with solid business models who have temporary problems caused by the rapid increase in interest rates and delayed sales resulting from the new residential property financing rules. These companies are fit for the future and should be
supported – but when they receive a rating downgrade for every late payment and are punished with higher interest costs, many of them will simply not make it. Humer: The banks are very much in the position and prepared to differentiate, and we also work to develop solutions in part- nership with our customers. But, on the one hand, some of these banks are smaller institutions with heavy commitments in apartment
© Roland Rudolph
Humer: That is, of course, true. When a potential borrower presents a profitable, realistic exit scenario, then we naturally look beyond the rental yield. But especially then, other criteria like the investor’s track record, know-how and credit standing are particularly important.
Tüchler: I agree completely. In Austria, the banks have remained remarkably calm. And reacted quite differently than in Ger- many: They were more uncompromising in calling loans, the price declines were much stronger and, as a result, we have recently increased our activities on that market. I think we will soon see this development here in Austria. In the end, you can only conclude that it’s not the buyer and seller, but the banks and the ECB
That sounds a bit too relaxed. Have we really survived the crisis?
Pöltl: No, I don’t think so. When you speak about the market crossing the low point, as Michael said, that may be true for the very good and absolute prime areas where 3SI is active. It in no way applies to average and weaker locations. I expect we will see bankruptcy filings during the second half of this year from a number of investment property owners who are unable to cover their financing costs. A range of investors who bought at the market peak will be forced to sell, inde- pendent of the current price level, and, in some cases, these sales will be managed by the liquidator. Prices in these segments will, in any event, continue to decline.
buildings up to 2022 and were urgently advised to reduce their loan portfolios in this
A range of investors who bought at the market peak will be forced to sell, independent of the current price level. - Franz Pöltl
who will define the market. The duration and extent of this weak phase depends on the ECB’s interest
segment, often independent of
any isolated cases. On the other hand, all banks must
rate policy and on the readiness of
comply with legal and supervisory regulations. We are not completely free in deciding how to rate our customers, when to classify a loan as non-performing and how we should deal with all this. I admit this doesn’t always reflect economic reality, and
the banks to take risks – which, when you look at it, is part of the banking business.
Schmidt: That’s exactly why stronger differentiation by the banks is so impor- tant. There are investors whose business is impossible to save. Also not by the
© Roland Rudo
20
Investment Property Report
Powered by FlippingBook