for exposures secured against domestic residential and commercial immovable property pursuant to Regulation (EU) No 575/2013 (“CRR”)
Pursuant to Article 125(3) and Article 126(3) CRR (credit risk: standardised approach) or Article 199(3) and (4) CRR (IRB approach) credit institutions may, in assessing whether exposures are fully and completely secured by property collateral, deviate from the principle requirement, that the risk of the debtor is not materially dependent on the performance of the underlying property or project, if the competent authority in the Member State in question, in which the property is located, has published proof that a well developed and well established property market exists, the loss rates of which are below specific upper limits.
The following upper limits are prescribed:
- losses stemming from loans collateralised up to 80% (or 50%) of the market value by residential property (or commercial immovable property) do not exceed 0.3 % of the outstanding loans collateralised by residential property (or commercial immovable property) in any given year;
- the total losses stemming from loans collateralised by residential property (or commercial immovable property) do not exceed 0.5 % of the outstanding loans collateralised by residential property (or commercial immovable property) in any given year.
It is hereby determined, that the maximum loss rates for the Austrian property market that were collected to date by the FMA are lower than the aforementioned thresholds, thereby meaning – until 31.12.2024 – that deviation from point b) of Article 125(2), point b) of Article 126(2) and point b) of Article 199(2) CRR is permissible. The regulations set out in the CRR in the version amended in Regulation (EU) No. 2024/1623 will apply from 01.01.2025.
Further information: