Private housing construction has reached its lowest point, at least according to Oberbank General Franz Gasselsberger. This year there were 20 percent more loans in the first quarter. The government’s construction package could provide an additional boost later this year. The fact that only the Landesbanken (Hypos) provide cheap loans for this purpose is still being negotiated.
“Young adults have become accustomed to the higher interest rates,” says Gasselsberger. Higher wages, falling real estate prices and the prospect of lower policy interest rates are improving sentiment. The desire to own a house remains unbroken. After years of zero interest rates, interest rates have now been ‘normalized’, as Gasselsberger calls it.
Last year, demand was mainly for commercial loans and leasing contracts, and Oberbank recorded growth here. In Germany, some leasing providers have withdrawn from activities, which the bank could benefit from.
High interest rates brought significant profits to the entire industry. Oberbank’s interest income rose by 47 percent to almost 600 million euros. The investments (especially Voestalpine) also developed well. It ended up with a profit of 382.6 million euros after tax, part of which now flows to the owners as dividend.
Oberbank also wants to provide subsidized home loans
How earnings continue to develop will also depend on key interest rates, which the ECB is expected to cut in the second half of the year. Political measures can also help. The government plans subsidized loans with an interest of 1.5 percent up to an amount of 200,000 euros.
Until now, it was said that the state-owned banks should provide these cheap home loans, which would be the regional mortgage banks. There are fears that other private institutions could lose business. For Gasselsberger, the last word has not yet been spoken here. In Upper Austria, for example, a solution is still being sought so that these loans cannot be provided only by Hypo OÖ with co-owner Raiffeisen. The Treasury Department says processing is generally determined by the respective countries – which banks are involved can also differ.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
