Financing conditions remain favorable for the European property markets in 2016.
Now in its 7th year, KPMG’s Property Lending Barometer provides insight into lending market conditions in Europe based on interviews with representatives from nearly 100 banks in 21 countries.
In 2016, a gradual improvement of the lending conditions seems to be a sustained trend. Still, despite the notable increase in bank financing, most countries’ markets are considered to have remained tighter compared to pre-crisis levels. Limiting factors to further improvement include the economic slowdown in China and the uncertainties caused by the UK Brexit vote.
According to the survey, financial institutions are clearly open to financing real estate projects. With relatively low interest rates and ample availability of finance, both from banks and alternative lenders, the macroeconomic environment is making real estate investment an appealing option for many investors.
For details on the specific markets, you can see the profiles of each country in the survey.
The Bulgarian real estate market has seen favorable development during the past year, reflecting some positive improvements. The major macroeconomic factors
influencing the sector were the GDP growth and completion of a number of EU-financed infrastructure projects. The market recorded a few transactions, including
development land, retail and office properties.
The importance of the real estate market for banks has visibly increased compared to last year. The banks are willing to finance both new developments and existing income generating projects. At the same time, the process of selling non-performing loan portfolios is expected to continue.
All respondents in the survey indicated that their real estate portfolio size is expected to increase in the upcoming year.
For further insights on the lending market in Bulgaria and Europe, see KPMG’s Property Lending Barometer 2016.