Real estate loans in the high rush: Demand jumps by 21 percent!

Real estate loans in the high rush: Demand jumps by 21 percent!

The demand for residential building loans, which has been heated since the interest of the European Central Bank (ECB) last year, remains unbroken. According to the Austrian National Bank (OENB), 89 percent of the borrower decided on the most fixed loan last year, since at 3.43 percent they were significantly cheaper than the variable -interest loans, which were 4.21 percent. This great confidence in fixed interest rates is also evident in the increased increased banking deposits, which increased by 19 billion euros, as the Krone . Compared to five years ago, when only 60 percent of the loans were fixed, the trend has changed significantly.

In the first quarter of 2025, the residential building credit market experienced an impressive increase in demand by 21 percent compared to the previous quarter, which has marked the highest values for years. Despite the increasing construction interest, the market remains dynamic, with a new credit volume of 6.2 billion euros at the end of 2024, which turns out to be important in order to benefit from the still relatively cheap interest rate levels. In the long run, however, the uncertainties due to inflation, high property prices and regulatory requirements could slow down the growth of demand, such as the explained.

financing needs remains high

The stability of demand is remarkable because the demand for residential properties has consistently exceeded the supply in recent years. The need for financing in relation to energy renovations and modernizations is also high. While a possible slowdown by the current economic conditions is not excluded, experts predict that the construction interest is expected to reach its peak in the fourth quarter of 2022 with a stabilization in 2023. In the future, the returns will also fall under 1 percent, which could lead to a decline in construction interest.