Banks remain confident about property lending in Europe
The Central and Eastern European (CEE) Real Estate Advisory Practice of KPMG released the Property Lending Barometer 2019, which is the 10th edition of the annually performed survey of KPMG assessing banks’ lending sentiments toward the real estate markets across Europe. This year’s publication includes respondents from nearly 70 financial institutions in 15 countries (including Cyprus), who provided their opinions on the prospects for bank financing in the real estate sector in Europe.
According to the results of the study, the real estate investment in Europe maintains a steady path going forward, despite potential causes for market agitation like trade tensions, or potential game-changers like Brexit. In addition, a majority of the bank representatives queried said they remain eager to lend to property investments; however, a lack of suitable loan placement opportunities may be creating barriers to real estate lending.
Most of the survey’s respondents gave a high strategic importance to property lending. In terms of what types of projects are preferred, the residential segment is preferred in more developed economies, while most banks within CEE fancy office projects; hotel investments are popular in places whose economies are quite reliant upon tourism, like, for example, in Cyprus.
According to respondents, they are interested in loaning to prime standing investments in the next 12-18 months. In terms of the criteria upon which they decide to make a loan to a project, they indicated that the business model strength and the asset quality are the most crucial factors for their consideration.
Christophoros Anayiotos, Board Member of KPMG in Cyprus and Head of Deal Advisory said that “For yet another year, the KPMG Property Lending Barometer provides valuable insights of what is happening in a number of European countries in terms of real estate loans. As regards to Cyprus, the results confirm our understanding of a more cautious lending approach by the financiers and also divulge useful information for borrowers, lenders and analysts”.
Insights from KPMG market experts
Along with the study’s overall analysis and continental perspective, the KPMG Property Lending Barometer 2019 contains sections dedicated to each of the economies included in the study: Bulgaria, Central and Eastern Europe, Croatia, Czech Republic, Cyprus, Europe, Middle East and Africa, Finland, Germany, Greece, Hungary, Ireland, Netherlands, Poland, Romania, Serbia, Slovakia and Slovenia.
The fact that KPMG’s Property Lending Barometer has been steadily and continually conducted for the last 10 years, gives the study added credibility.
“This longer-term timeline of our study, I believe, gives us a deeper well of understanding and perspective on the real estate markets in Europe,” says Andrea Sartori, Partner, Survey coordinator and Head of Real Estate in CEE. “Thus, we are able to tease out and see more clearly how the various factors are affecting our markets, enabling us to draw meaningful, long-term conclusions about real estate lending.”
It is important to note that a number of analysts, data scientists but also enterprises on both international and local level expressed their interest to sincerely evaluate the wealth of information and analysis provided in Property Lending Barometer 2019.
To access the full report, please visit the following link:
KPMG Property Lending Barometer 2019