03.07.2026

The Sectoral Systemic Risk Buffer for Commercial Real Estate Finance

WIFO Research Brief Examines Accuracy and Implications for Credit Supply and Construction Activity

The Financial Market Authority will gradually raise the sectoral systemic risk buffer for commercial property finance to 3.5 percent by 2027. A recent WIFO Research Brief by Christian Glocker, Michael Klien and Thomas Url assesses the macroeconomic implications of this measure against the backdrop of the macroprudential tightening measures being implemented simultaneously and the absence of systematic signs of cyclical overheating.

Microprudential requirements tailored to specific credit institutions would currently be more targeted and proportionate than a sectoral systemic risk buffer with a blanket effect. Since commercial real estate loans also include loans to commercial housing developers, macroprudential policy is dampening an already fragile construction sector, driving up rents, and reinforcing the European Central Bank's shift in interest rate policy. The Research Brief is based on a recent WIFO study commissioned by the Austrian Raiffeisen Association (Österreichischer Raiffeisenverband).

"The measure comes at a delicate time: Austria is still grappling with a weak construction sector and a slow economic recovery. Our findings call into question the proportionality of the systemic risk buffer. The additional capital requirements are curbing lending and thus dampening investment in residential and commercial construction. Fewer new buildings further restrict the already scarce supply of housing and increase pressure on rents. Instead of uniform requirements for all banks, we propose targeted requirements for those institutions that actually bear high risks. This would safeguard the stability of the financial system without placing an additional burden on the construction sector as a whole", says WIFO economist Thomas Url.