Oberbank boss:

“Private residential construction has bottomed out”

The high interest rates have caused private residential construction to collapse. Now the turnaround could come soon.

(Bild: P. Huber)

Private residential construction has bottomed out, at least if Oberbank CEO Franz Gasselsberger has his way. This year, there were 20 percent more loans in the first quarter. The government's construction package could provide additional impetus in the further course of the year. The fact that only the Landesbanken (Hypos) are granting favorable loans for this is still under negotiation.

"Young adults have become accustomed to the higher interest rates," says Gasselsberger. Rising wages, falling property prices and the prospect of lower key interest rates are brightening the mood. The desire to own a home is unbroken. After years of zero interest rates, interest rates have now "normalized", as Gasselsberger calls it. 

Last year, commercial loans and leasing contracts were particularly in demand, and Oberbank recorded growth in this area. In Germany, some leasing providers have withdrawn from the business, which the Bank was able to take advantage of. 

Franz Gasselsberger is optimistic that the residential loan business will pick up again this year.

(Bild: Harald Dostal)

The high interest rates brought significant profits to the entire sector. Specifically, Oberbank's net interest income rose by 47 percent to almost EUR 600 million. The participations (above all Voestalpine) also developed well. The bottom line was a profit of EUR 382.6 million after tax, part of which will now be paid out as a dividend to the owners.

Oberbank also wants to grant subsidized housing loans
How profits continue to develop also depends on the key interest rates, which the ECB is likely to lower in the second half of the year. Political measures could also help. The government is planning subsidized loans with interest rates of 1.5 percent up to an amount of 200,000 euros.

Until now, it was said that the state banks would grant these favorable housing loans, which would be the regional mortgage banks. Other, private institutions, on the other hand, could lose business, according to one fear. For Gasselsberger, however, the last word has not yet been spoken. In Upper Austria, for example, a solution is still being sought to ensure that Hypo Oberösterreich and its co-owner Raiffeisen are not the only ones able to grant these loans. According to the Ministry of Finance, the respective provinces will generally decide how the loans are processed - and the banks involved may also differ.