Stock Groups

Austrian central bank sees growing risks from mortgages amid property boom -Breaking

by Mike Robinson

[ad_1]

© Reuters. FILE PHOTO – A fence was placed on the Austrian National Bank building (OeNB), Vienna, Austria. June 15, 2018. REUTERS/Heinz-Peter Bader

VIENNA, Reuters – The central bank stressed Wednesday that the risks of insufficiently prudent mortgage lending are rising amid Austria’s boom.

The Austrian National Bank (ONB), in its June semi-annual Financial Stability Report, stated that closer monitoring of mortgage lending is necessary to prevent systemic risks. Officials at ONB said they will wait and see.

The latest report was published by the Financial Market Stability Board on Wednesday. It said that the market for housing is growing faster than the one in the eurozone. The Financial Market Stability Board which comprises representatives from the Finance Ministry and the Financial Market Authority, found that mortgages are still more risky than those recommended.

The ONB stated that “In Austria, residential property markets… loan growth and price rates have remained vibrant (in the first quarter of 2021), which places banks’ compliance to sustainable lending standards under increased supervision.”

It is important to pay attention to sustainability in lending and especially for real estate lending. It is important to follow the FMSB recommendations.

FMSB recommends that sustainable mortgage lending be done with a minimum 20% downpayment, a loan term of maximum 35 years and debt service to income ratios of between 30% and 40%.

According to the ONB, risks associated with housing loans are increasing in its headline.

Disclaimer: Fusion MediaThis website does not provide accurate and current data. CFDs are stocks, futures, indexes or Forex. The prices of Forex and CFDs are not supplied by exchanges. They are instead provided by market makers. Because prices might not reflect the market, they may be incorrect. This means that prices cannot be considered indicative and are inappropriate for trading. Fusion Media does not accept any liability for trade losses you may incur due to the use of these data.

Fusion MediaFusion Media and anyone associated with it will not assume any responsibility for losses or damages arising from the use of this information. This includes data including charts, buy/sell signal, and quotes. Trading the financial markets is one of most risky investment options. Please make sure you are fully aware about the costs and risks involved.

[ad_2]