KIM regulation falls: rescue for buyers or chaos on the real estate market?

KIM regulation falls: rescue for buyers or chaos on the real estate market?

Gerald Gollenz, the chairman of the professional association of real estate and asset trustees in the WKÖ, today commented on the impending end of the KIM regulation, which has set strict rules for residential lending in recent years. “The times of outdated regulations must finally be over,” emphasizes Gollenz, while clearly addressing the negative effects of these regulations on the Austrian real estate market. Loud immobilien-redaktion.com The KIM regulation led to a dramatic decline in new construction and renovation activities, which is up to 80 percent nationwide.

The effects are obvious: over 400 real estate brokerage and property development companies have thrown in the towel in the past two years. Professions such as financial service providers, notaries, lawyers, civil engineers and architects also complain about massive losses in profits. “This is an alarming development,” says Gollenz, warning of the catastrophic consequences that continued existence of the strict rules could have for the real estate market and potential buyers.

Fortunately, July 1, 2025 brings not only a farewell to the KIM Regulation, but also a wave of new regulations aimed at stabilizing the real estate market. This means banks will be able to use more flexible lending in the future. The authorities want to create access to the housing market that is fairer and more accessible. The hope is that younger couples and families can benefit as maximum loan-to-value and debt service ratio calculations are adjusted. According to betterhomes.at, the maximum loan-to-value ratio will be relaxed, which means that banks are allowed to make exceptions to the capital requirements in certain cases.

Opportunities and risks in the real estate market

So what exactly is changing? Credit institutions can finally offer longer terms in certain exceptional situations and the maximum debt service ratio of 40 percent of household income can now be expanded in certain cases. According to experts, these changes could boost demand in the mid-price segment and stabilize or slightly increase price levels in urban regions.

Despite all these positive developments, caution remains advised. The easing could lead to borrowers making more careless financial decisions. Banks therefore remain obliged to carefully check the creditworthiness of their customers. With all of these adjustments, it is important that prospective buyers think carefully about their financial options and seek independent financial advice at an early stage in order to get an overview of the various offers.

In view of the difficult situation brought about by the KIM regulation, many potential buyers are now motivated to make inquiries and hold financing discussions. “It is a ray of hope for the Austrian economy,” concluded Gollenz. The coming weeks and months will show whether the real estate market in Austria can actually benefit from this turning movement, or whether the shadows of the past will continue to weigh on it. Together with a good plan and solid advice, nothing stands in the way of your dream of owning your own home.