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Credit market in transition: New opportunities for construction financing from 2025!
The KIM-VO on real estate financing ends in 2025. Find out what effects this has on loans and the real estate market.
Credit market in transition: New opportunities for construction financing from 2025!
From mid-2025, the KIM regulation, which has imposed strict conditions on housing loans since August 2022, will no longer be applied. According to a report by kosmo.at The Financial Market Stability Board (FMSG) has decided to let this regulation expire because the systemic risks in the banking sector are no longer considered serious. Previously, the KIM regulation ensured that the maximum loan terms were limited to 35 years, a minimum share of 20 percent equity was required and the monthly repayment installments were limited to 40 percent of net income, which helped to stabilize the market.
With the abolition of the KIM regulation, access to housing loans for private households could improve significantly. Experts expect this will encourage additional investment in the construction and real estate sectors, such as kpmg.de reported. Nevertheless, the FMSG remains vigilant and will continue to monitor the development of the capital buffer in commercial real estate as well as potential risks in the residential real estate sector. A countercyclical capital buffer could be adjusted depending on the overall economic situation, which could have a significant impact on lending.
New regulatory requirements in the financial sector
In 2024, there will also be extensive changes to the regulatory framework for banks. From 2025, the DORA regulation, which requires a robust risk management strategy for information and communication technologies, will come into full force. At the same time, new regulations for monitoring sustainability risks are being implemented, such as the Corporate Sustainability Reporting Directive (CSRD). This requires larger credit institutions to submit comprehensive reports on their sustainable practices by the end of 2024. The EU is also due to create a new authority to combat money laundering and terrorist financing by 2026, which will bring fundamental changes to existing regulations.