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BUCHAREST (Romania), October 12 (SeeNews) - Half of Romanian banks expect their real estate loan portfolios to grow, while the other 50% predict no change, consulting firm KPMG said on Thursday.
However, most Romanian banks forecast an increase in the size of the real estate loan portfolio of the banking sector as a whole over the next 12 to 18 months, KPMG said in its Property Lending Barometer 2017, a survey of banks on the prospects for real estate sector lending in Europe.
"Romania remained one of the leading countries in the CEE region in terms of economic growth, with an attractive real-estate market for existing and new investors, where real estate financing is seen as important by all of the market players," KPMG Central and Eastern Europe partner Ori Efraim said.
Real estate financing is seen as moderately important or important by all of the market players surveyed. There is a difference between respondents about the focus on real estate financing compared to one year ago: half of them report that the level of focus has been maintained, while the other 50% state that there has been a significant increase, the results of the survey showed.
Romanian banks are open to both financing income generating properties and providing development financing. During the last 12-18 months, over two-thirds of the total volume of real estate loans was dedicated to financing new developments, according to the survey.
Among the alternative lenders, banks consider private equity and debt funds as their biggest competitor followed by non-local commercial banks. Some 75% of banks in the survey regarded the level of provisions for real estate loans as adequate, while the rest of the respondents considered it somewhat higher than adequate.
Banks also indicated that that the average loan deal size was in the range of 9-18 million euro ($7.6-15.2 million), while the preferred size is slightly higher at 11-19 million euro.
First published in 2009, Property Lending Barometer aims to assess the prospects and sentiment for bank financing in the real estate sector in Europe, based on interviews conducted with bank representatives from 17 European countries.