End of the KIM Ordinance: New upswing for housing in Austria!

End of the KIM Ordinance: New upswing for housing in Austria!

Österreich - The KIM Ordinance, introduced in August 2022, is facing the end. This regulation was created to stabilize the real estate market in Austria, while the European Central Bank (ECB) increased the key interest rates and many borrowers confronted challenges. The regulation requested at least 20 percent equity from borrowers, a maximum repayment rate of 40 percent of net income and limited the term of loans to 35 years. According to the financial market stability committee (FMSG), the positive development in credit cases means that the KIM-VO should expire until mid-2025, since there is currently no significant system risk to the financial market stability, as orf.at reports.

The possibility of further following the lending standards imposed by the KIM-VO will continue to exist, even if the regulation no longer applies officially. The Secretary General of the Economic Chamber of Austria, Karlheinz Kopf, described the expiry of the regulations as "extremely gratifying signs" and emphasized that the strict rules in the past had severely hindered the acquisition of residential property. The chairman of the federal division Bank and Insurance, Michael Höllerer, also sees the loosening of the regulations as important impulse for housing in Austria, which is also taken up positively by the public governors of the ÖVP. Lower Austria's Governor Johanna Mikl-Leitner spoke of "good news for all house builders", as well as on Noen.at reported.

reactions and controversy

However, the decision to run the KIM-VO polarizes. Critics, among them the green MP Nina Tomaselli, warn that rising real estate prices make the dream of home unreachable for many. It describes the expiry of the guidelines as "totally unreasonable" and sees high risks for the financial center. In view of the apparently stable situation in the real estate sector, it remains to be seen how lending and market conditions will develop without these strict requirements.