KIM regulation expires: New hope for the Austrian housing market!

KIM regulation expires: New hope for the Austrian housing market!

A crucial turning point for the Austrian real estate market is approaching: The credit institutions real estate financing measures regulation (KIM-V), which was introduced in August 2022 to prevent overload and bankruptcies, will expire on June 30, 2025. This regulation stipulated that borrowers had to show at least 20 percent equity and the monthly rates were not allowed to exceed 40 percent of the net income. These strict framework conditions not only led to a decline in lending, but also severely restricted housing construction. Business representatives are now breathing up because they cheerfully welcomed the expires of the KIM-V as valuable impulse for the housing market, as confirmed by the Austria Chamber of Commerce.

The affected industries, which again strive for more freedom of movement in the real estate sector, were faced with great challenges through the KIM-V. Günther Lehner, master building guild, was relieved: "The fact that the regulation is now expiring on June 30, 2025 was overdue and is a huge relief for the entire construction industry!" The European National Bank also found that the strict lending guidelines have reduced the risks in the real estate sector, but there is no longer any systemic risk. Nevertheless, the financial market committee warned of the existing challenges that could continue to endanger the stability of the financial system.

new perspectives for housing construction

According to the Chamber of Commerce, the new construction units could drop drastically without any necessary countermeasures-from around 17,380 condominiums to only 1,793 to 2026. Secretary General Karlheinz Kopf saw a positive signal for young families and medium-sized companies in the expiry of the KIM-V. This enables new housing construction and supports investments in Austria. "The KIM Ordinance represented such a high hurdle for the acquisition of home that the new apartment had collapsed," said Kopf. Michael Holzer, chairman of the financial service provider specialist group, was also confident that the real estate market can soon recover because there is now freedom of movement.

For further details on the background and the resulting changes in the housing market, we refer to insightful information from APAOTS and meinbezirk.at .