|
The
nation's financial regulator BaFin has long warned of the risks
in the once-heated property sector, but the comments from BaFin
President Mark Branson in a podcast aired on Tuesday took on a
more pessimistic tone as the industry writhes from higher
interest rates, insolvencies and a sharp slowdown in
transactions.
"Many went overboard in times of extremely low interest rates.
That is why a necessary correction has come," Branson told the
podcast Finanz-Szene, calling real estate "risk No. 1".
The problems of developers and real estate companies will
depress prices and transactions "for a while", he said.
"That will probably not come back so quickly," he said, adding
that the broader financial sector would be able to digest the
problems but that individual players could be harder hit.
Branson said that 2023 was especially good for profitability but
2024 will be "more difficult".
Higher interest rates and the income that generates was a boon
to banks in 2023, Branson said in the interview.
"But a lot of costs in the loan books come with a time lag and
we will see that in 2024 and in the following years," he added.
(Reporting by Tom Sims, Editing by Linda Pasquini, Kirsten
Donovan and Ed Osmond)
[© 2024 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
