mercurius-adept schreef op 22 november 2023 18:57:
ECB-FSR 22 nov:
Vooruitzichten financiële stabiliteit broosReal estate markets in an environment of high financing costs
"Rising interest rates and overall uncertainty, combined with the inherent
illiquidity of CRE markets, resulted in a sharp 47% drop in the number of transactions conducted in euro area CRE markets over the first half of 2023 compared with the first half of 2022. This has inhibited price discovery, which is hampering the assessment of actual market dynamics .
The performance of real estate firms in equity markets, which are more liquid, suggests substantial price declines, with the euro area’s largest listed landlords trading at
a discount of over 30% to net asset value (NAV), their largest discount since 2008. "
"Market participants are indicating that demand is increasingly concentrated in the market for high-quality buildings with good energy ratings"
"Loans to landlords account for around two-thirds of banks’ exposures to real estate firms, while structurally lower demand for CRE assets reduces landlords’ capacity to raise rents. Developers and landlords alike face rising costs from inflationary pressures and capital expenditures associated with higher energy efficiency requirements. Developers are under further pressure from falling sales prices and contracting order books. This implies that
profits for real estate firms may in fact fall in the coming years rather than keep pace with rapidly rising financing costs, posing challenges to debt servicing capacity"
The performance of real estate firms in equity markets, which are more liquid, suggests substantial price declines, with the euro area’s largest listed landlords trading at a discount of over 30% to net asset value (NAV), their largest discount since 2008
The weak profitability outlook is creating greater downside risks in banks’ CRE portfolios.
www.ecb.europa.eu/pub/financial-stabi...