Banks are most positive by far about real estate lending in Austria than in any other country in Central and Eastern Europe. Austria took the top spot in an index of property financing sentiment in CEE recently compiled by global accountancy firm KPMG.
Banks are most positive by far about real estate lending in Austria than in any other country in Central and Eastern Europe. Austria took the top spot in an index of property financing sentiment in CEE recently compiled by global accountancy firm KPMG.
The country - added to the annual index for the first time - achieved a score of 1.36 out of 10, based on 10 questions put to lenders during the summer. The lower the score the higher the ranking.
The questions included where the financial institution intended to increase or decrease lending in a market compared to the previous year and the proportion of compliant and non-compliant loans per country. Some 50 banks took part in KPMG’s CEE Property Lending Barometer 2011 in which the sentiment index is published.
The Czech Republic and Poland came in second and third place, with scores of 3.36 and 3.68 respectively. Slovakia (4.86) and Romania (5.32) - up slightly from last year - came fourth and fifth.
KPMG said the results indicate there is financing available for high-quality property projects, and bank sentiment is most positive for countries that have a 'more solid' macroeconomic performance.
The lower ranked markets were Serbia (5.77), Hungary (7.00), Bulgaria (7.23) and Slovenia (7.50). The Baltic states, considered as one market, came bottom with an index score of 8.30.
Financing was a key issue during the Property Investment Forum hosted in Budapest earlier this month by business media group Portfolio.hu. Speakers noted that the Hungarian economy and real estate sector is weak at the moment, while Poland appears to be booming.
Noah Steinberg, CEO of Hungarian real estate developer WING, said countries in the CEE region face two main challenges in relation to finance and property investment. 'One relates to fundamentals - is there a sufficiently good growth story and property,' he said.
The second is a 'reputational' challenge. 'Poland is on one side of the horse and Hungary on the other. The reality on the ground is probably better in Hungary than imagined and Poland is probably worse than represented,' Steinberg told the forum in Budapest.