Real estate market ECB chief supervisor urges caution with real estate loans

Real estate market ECB chief supervisor urges caution with real estate loans

Real estate market ECB chief supervisor urges caution with real estate loans

Head bank supervisor Andrea Enria warns of a bubble in the real estate market. “We are seeing an increase in vulnerabilities in residential real estate in some countries,” Enria said on Thursday before the European Parliament’s Economic Committee.

By and large, the number of non-performing loans is still manageable, but the quality of the underlying assets seems to be deteriorating. The banks’ forecasts for bad loans may be overly optimistic and he advised caution when dissolving risk provisions.

Enria had already said on Wednesday that some loans were deteriorating in quality. Overall, however, it painted a positive picture of the situation in the banking sector. The institutes have so far mastered the pandemic well.

Real estate prices are rising incessantly and with them the fear of a real estate bubble.