<\/p>\n
Some days ago the Austrian Governor of the National bank announced that the Austrian banks should withdraw capital from the CEE region, where they have invested a… “river of billions of Euro”. The Romanian president, Traian Basescu, replied in a very strict way, warning that this move would be a major mistake. But still many of you keep on asking me: “Ok, if this happens during 2012, what does it mean for the Romanian Real Estate and Green Energy markets?”<\/p>\n
I don’t blame the Austrians or Mr. Basescu…<\/strong><\/p>\n It is easy to start swearing. I already saw many Romanians angry at the Austrians or Mr. Basescu. Usually their arguments are childish, but this is how the public discussion is usually held (not only in Romania, even in the USA sometimes…)<\/p>\n The Austrians are not to blame. They have invested billions in CEE countries, in Romania as well. I would be curious to find someone who will justify to me how they got their money back (because I believe they did not. The same stands for all banks which expanded their networks during 2006 – 2008). This does not mean that they have not made mistakes. But the overall picture is positive; they have definitely helped Romania grow.<\/p>\n On the other hand, Mr. Basescu simply does his job and defends his country’s interests. This is what a President should do and his message was heard out of Romania as well. I am not involved in politics, but the move seems right for our interests.<\/p>\n I would not blame any of them. I would mainly focus on the consequences, because any sentimental approach won’t help us understand the next steps for the markets…<\/p>\n What does it mean for the Real Estate market?<\/strong><\/p>\n If Erste (BCR), Raiffeisen and Volksbank officially reduce their exposure on the Romanian market, the first ones who will feel this will be the ones involved in the Real Estate market. Why is that? Because this segment is the most influenced by the liquidity on the market.<\/p>\n (Let us not forget that if the Austrians start, many others will be “tempted” to follow…)<\/p>\n 10% less liquidity means at least 3 – 5% lower prices in the residential sector (especially the one including old apartments). This is because less liquidity means:<\/strong><\/p>\n · Less housing loans and “loans for personal needs”.<\/p>\n · Less money on the market, which stresses many people in need of cash.<\/p>\n · More people needing to sell their property and accept lower offers.<\/p>\n · More foreclosures. And more foreclosures mean lower prices as well.<\/p>\n How do we achieve “less exposure” on a market?<\/strong><\/p>\n · By reducing the volume of loans approved.<\/p>\n · By asking back money from loans already given.<\/p>\n · By collecting money from “problematic” loans (pressing the borrowers to give back more, or proceeding in executions).<\/p>\n · (And other techniques that bankers know).<\/p>\n Overall: Once a lower level of liquidity will be reality in the Romanian banking sector, the prices will be influenced too. The first ones who will feel this will be the ones in the residential segment, where less liquidity means less demand. And less demand means lower prices (…or not?) <\/p>\n Is the Green Energy market going to be affected as well?<\/strong><\/p>\n I don’t think so. The situation in Green Energy is much more controlled. The approved loans are very few and the financed projects are well prepared. Also there are no “black holes” coming from the past. This is why the banks are still interested in financing projects.<\/p>\n Of course any measures like this (reducing exposure) will make the procedure more difficult and strict. When the message is negative, everyone’s activity becomes more difficult. But in this segment we did not see the exaggerations of Real Estate, so I am more positive.<\/p>\n But…<\/p>\n Green Energy means “steady income produced”. As we saw with the Real Estate segment (where only projects with steady income were financed), banks like steady income, they understand how they will get their money back.<\/p>\n PS. Personally I’m not afraid. When we talk about a segment ruled by Mr. Isarescu, I am 100% sure that he will find the way to control things once more.<\/p>\n What is your opinion?<\/p>\n","protected":false},"excerpt":{"rendered":" Some days ago the Austrian Governor of the National bank announced that the Austrian banks should withdraw capital from the CEE region, where they have invested a… “river of billions of Euro”. The Romanian president, Traian Basescu, replied in a very strict way, warning that this move would be a major mistake. But still […]<\/p>\n","protected":false},"author":3,"featured_media":59454,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[216,235,17,236],"tags":[],"_links":{"self":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts\/12101"}],"collection":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/comments?post=12101"}],"version-history":[{"count":0,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts\/12101\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/media\/59454"}],"wp:attachment":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/media?parent=12101"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/categories?post=12101"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/tags?post=12101"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}