Credit hurdles fall: Hope for future house builders in Tyrol!

Credit hurdles fall: Hope for future house builders in Tyrol!

Wien, Österreich - A significant change is imminent that brings new hope for a home loan! The strict requirements of the KIM Ordinance (Credit Institutes Finance Finance Ordinance) end in June 2025, as reported. This regulation, in force since August 2022, has significantly more difficult the lending by banks. For example, borrowers had to raise more than 20% equity, earn monthly rates below 40% of net income and accept a term of less than 35 years. For many builders, this bureaucratic effort was a deterrent hurdle. Reinhard Mayr, chairman of the Bank division and insurance company in the Tyrolean Chamber of Commerce, criticizes that the regulation had primarily negative effects on the construction industry.

The expiry of the KIM regulation is called a early Christmas present for prospective homeowners. However, he makes it clear that the banks must continue to follow strict credit distribution guidelines even after the cancellation. The financial market stability committee has already published guidelines to minimize the risk of defaults on payment, which, according to Mayr, could rather lead to more bureaucracy. Nevertheless, he hopes for a return to more flexible lending, especially for borrowers whose future installments are under their current rent.

Risks remain, but the U -turn is emerging

The discussion about the KIM regulation shows that regulation in real estate financing remains intensive. As The press , the supervisory authorities in a Zwickmühle between the protection of the banks are against excessive risks and the desire to enable people to acquire real estate. Despite the expected relaxation, the banks are required to maintain capital buffers and pay attention to possible risks in real estate financing.

The capitalization of the Austrian banking sector is solid with over 17%, so it is above the EU average. Due to this stability, the recommendation committee becomes active in order to develop additional safety measures, especially for commercial property loans. So it remains to be seen how the market conditions will develop after the KIM rules belong to the past.