Leading representatives of the Austrian construction and building materials industry welcome the end of the KIM regulation, whose restrictive lending rules made it particularly difficult for young families and single earners to build housing and thus contributed to the current housing crisis. Industry representatives had been pointing out this development for a long time as the cross-industry initiative “More at home in Austria!”. The change in thinking is welcome, but comes very late, according to the initiative, given the ongoing low level of housing construction. In order to prevent an impending housing shortage and increasing unemployment in the construction sector, further steps are necessary, according to industry representatives, such as an increase in housing subsidies with reintroduced earmarking and simplified zoning.
Torsten Kreft, managing director of hagebau Austria, says on behalf of the initiative: “The end of the KIM regulation comes late, but is still an important impulse that we expressly welcome. The restrictive lending guidelines were one of the reasons for the dramatic decline in residential construction. But that can only have been the first step; politicians must finally follow up their numerous announcements with effective action. Because we need more new construction immediately to prevent a housing shortage and further job losses in the construction industry.
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The KIM regulation was introduced in 2022 and required buyers to provide proof of 20 percent of the purchase price of an apartment or house as equity. The monthly loan payment must not exceed 40 percent of the household income. This is why the majority of Austrian young families fail. Up to 50 percent of applicants were not approved for housing loans due to the KIM regulation.
Further steps necessary: Reformed housing subsidies and modern building regulations
According to Statistics Austria, the supply of new apartments continues to decline, and the Austrian Employment Service (AMS) recorded five percent more unemployed people in the construction sector in November compared to the previous year – an industry with 350,000 employees. Therefore, according to industry representatives, further decisive steps are needed to increase housing construction, such as increasing housing subsidies and reintroducing earmarking so that the funds are used exclusively for new housing.
Modern building regulations with faster zoning and easier additions to existing buildings as well as tax relief for housing investments would also stimulate new construction.
„The end of the KIM Regulation gives us confidence, but the next steps must follow quickly. The next federal government must tackle housing construction from day one of its term in office; we have already lost too much time. If we don’t reverse the trend now, there will be a massive housing shortage with rising unemployment – in 2025 and beyond
“, Kreft concluded.
About “More at home in Austria!”
“More at home in Austria!” is an initiative of leading companies and institutions in the Austrian construction and building materials industry to promote housing construction in Austria. It was initiated to draw attention to the impending housing shortage, rent increases and rising unemployment that are looming due to the current backlog in housing construction. In order to secure the increasing housing needs of a growing Austrian population, the initiative has developed a housing construction agenda with concrete solutions and demands, including changes to lending guidelines for housing creation, funding reforms, investment incentives and reductions in bureaucracy. The initiators and co-sponsors (as of September 2024) of “More Home in Austria!” are: Association of Austrian Warehouse Cooperatives, ACO, ARDEX, Federal Construction Guild in the WKO, Baumit, DOMOFERM, Vienna Specialist Group of Real Estate and Asset Trustees, Friedl Steinwerke, hagebau, Holcim, Internorm, J. and A. Frischeis, PCI, professional building materials, Raiffeisen Association Salzburg, Salzburg warehouses, Saint Gobain, Schiedel, Sopro, Teubl, wienerberger Austria