New opportunities for home buyers: lending again from July!

New opportunities for home buyers: lending again from July!

On June 5, 2025, Dieter Bornemann will report on the upcoming changes in lending in the ORF program "Eco" at 10:30 p.m. The background is the expiry of the KIM Ordinance, which has regulated the residential finance in Austria since August 2022. The aim of this regulation was to protect borrowers and to contain a loan allocation. From July 2025, a relief in recording residential loans is expected, which is particularly important for private individuals. Experts had put on a partial relaxation since May 2024 because the risks for banks were considered to be reduced. The KIM Ordinance was originally introduced to protect banks from defaults on payment and to preserve the borrowers from an over-indebted situation, which was repeatedly discussed in public discussions. [The press] (https://www.diepresse.com/19136710/Strenge-regeln-fuer Wohnbau-kredite-Laufen-trotz-Heisser-Risiko-discussions-Aus) reports that critics found the strict criteria of the regulation to be hindy for the acquisition.

With the expiry of the KIM regulation on June 30, 2025, there are now many changes. Banking chairman Michael Höllerer successfully campaigned for the end of the regulation. The capitalization of the Austrian banking sector plays an important role in this. This was over 17% in 2024, which is above the EU average of 16%. There are positive signals regarding the risk location on the real estate market. The overvaluation of residential properties was reduced, which also indicates stabilization of price developments.

economic effects

The discussions about the KIM regulation are all the more explosive when they collapse with a wave of bankruptcies among real estate developers. Many companies that have benefited from low interest rates and a booming real estate market are currently facing serious financial difficulties. Where profits are estimated, losses are now threatened, which also makes small banks particularly hard. [KPMG Law] (https://www.kpmg-law.at/neue vergabestandards-fuer-WohnimmobilienKredite/) emphasizes that the KIM-VO was originally intended as a measure to reduce the systemic risk of spinal capital financing of residential properties.

At the same time, the financial market stability committee (FMSG) determines that despite the challenges in the financial sector, an additional sectoral risk buffer system for commercial property loans should come into force from July 2025. This measure is taken to cushion potential risks that result from a non -sustainable lending. The discussion about a possible extension of the KIM regulation shows that many supervisors continue to worry about the stability of the banks. Nevertheless, the arguments for loosening the current standards that affect access to residential property financing seem to be strong.

new perspectives for borrowers

From July 2025, it is expected to apply for living loans for private individuals. Current award criteria provide for a maximum lending rate of 90%, with a clear focus on the repayment of borrower. The maximum terms should remain limited to 35 years, and the debt ratio should not go beyond 40%. Exceptions for loan applications under 50,000 euros are also possible, which could be particularly important for first buyers.

These developments could help boost the stagnant housing market and give more people access to real estate. With a look at the upcoming ORF program and the opinions of the market players, the following weeks are likely to be exciting, since the economic situation and borrowing households focus on. The upcoming discussions on the new awarding standards will show how sustainable these loosening are actually.