AUSTRIA Trends and Developments Contributed by: Markus Fellner, Stefan Sallat and Florian Henöckl, Fellner Wratzfeld & Partner Rechtsanwälte GmbH
The regulatory environment and economic background In August 2022, the Austrian FMA issued the “ Kredit- institute-Immobilienfinanzierungsmaßnahmen-Verord - nung (KIM-VO) (Federal Law Gazette II No 230/2022) ”. In summary, the aim of this regulation was to limit the systemic risks in residential real estate financing and to focus on the borrower’s ability to repay rather than the mortgage collateralisation of the loan and to implement the recommendations and requirements of the Financial Market Stability Board (FMSB). Since coming into force on 1 August 2022, the KIM- VO and the upper limits for the granting of residential property financing have been the subject of contro- versial debate. The main point of criticism has always been that an overly strict restriction on residential real estate financing would noticeably reduce the demand for real estate and prospective buyers would have to live in tenancies instead of considering buying a property, which would lead to higher rents and the associated negative social and economic impacts on people.
The KIM-VO expired on 1 July 2025. However, the restrictions on the granting of residential real estate financing remain in place in a different form. Since the FMSB last endorsed the KIM-VO guidelines on the granting of residential real estate loans by banks on 26 February 2025, the FMA issued a circular on the sound granting of private residential real estate loans on 26 June 2025 (“WIK Circular”). The WIK Cir- cular does not constitute a regulation. It reflects legal opinions and the FMA’s recommendations for conduct derived from them. Banks’ rights and obligations that go beyond the statutory provisions cannot be derived from the circular. However, as a “recommendation for conduct” issued by the FMA, the WIK Circular never- theless has a regulatory effect on banks, as the FMA regards the recommendations it contains as a guide- line for sound lending. If banks wish to deviate from these guidelines, they must be able to demonstrate that this greater risk appetite is covered by their risk strategy, which may mean a higher capital require- ment.
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