Austrian real estate market remains stable despite Signa Holding filing for insolvency: financial expert gives the all-clear

Austrian real estate market remains stable despite Signa Holding filing for insolvency: financial expert gives the all-clear

According to a report by www.faz.net,

The Austrian real estate group S Immo does not expect major disruptions for the sector following Signa Holding's bankruptcy filing. S-Immo board member Herwig Teufelsdorfer emphasized that investors in the Austrian real estate market are so heterogeneous that there is no risk of emergency sales of larger portfolios. According to the manager's assessment, long-term rented properties with a long investment horizon will always find interested buyers, especially in good locations. S Immo, which belongs to the CPI Property Group of the Czech real estate billionaire Radovan Vitek, operates in Germany and Eastern Europe in addition to its home market, and the portfolio consists primarily of offices, but also commercial properties, hotels and residential properties.

Signa Holding's bankruptcy may not have caused major shockwaves in the real estate market. The share price of the DAX group Vonovia even rose slightly on the day Signa's insolvency was announced. This also applies to other real estate assets. It seems that the collapse of the Signa empire will not initially have a major impact on the market. Investors are apparently optimistic about the latest inflation data, which reached its lowest level since 2021 in November. This raises hopes that the central banks will continue to pause on interest rates for the time being or even switch back to lowering mode soon.

However, the change in interest rates and the high level of debt among real estate companies continue to weigh on the market. During the low interest rate phase, debts rose sharply. The uncertainties are putting a strain on the market, which is already under pressure due to high interest rates and construction costs coupled with falling real estate prices. This could result in real estate companies remaining under pressure and their share prices remaining volatile.

The impact on the real estate market could therefore depend on various factors such as inflation data, interest rate policy of central banks and company debt. It remains to be seen how the market will develop in the coming months.