“The real estate sector is still fairly stagnant, and banks are likely to continue to be cautious about lending, given the proportion of impaired loans in their portfolios,” said Ori Efraim, Partner and Head of Real Estate at KPMG in Romania.
However, the local property market is not short on growth potential and there is some evidence of renewed interest, particularly from Chinese developers, KPMG noted in its CEE Property Lending Barometer 2011.
“As in many sectors, the Chinese have been quick to identify opportunities on the Romanian market and are filling some of the gaps left by more cautious investors, which have been more reticent about emerging markets after 2008,” Efraim said.
In Central and Eastern Europe, real estate financing has shown signs of improvement over the past 12 months, but the markets are currently volatile, with negative investor sentiment regarding the eurozone due to increasing European sovereign debt concerns and a strong Swiss franc, the survey showed.
KPMG’s survey includes 50 banks in the CEE region.