Austria: EIB and Erste Bank promote affordable housing
21 May 2019
EU bank and Erste Bank provide a total of EUR 200m for social housing
The agreement promotes the construction of new subsidised or social rental housing
For the first time, the financing will provide fixed interest rates with terms of up to 28 years for rental housing
Tenants in thousands of newly built properties across Austria will benefit
The European Investment Bank (EIB) is providing Erste Bank der oesterreichischen Sparkassen AG (Erste Bank) with EUR 100m in financing to support affordable housing in Austria. Erste Bank will add a further EUR 100m of its own funds to the EIB financing, enabling it to invest a total of EUR 200m in social housing over the next three years.
The aim of the agreement is to facilitate the provision of investment resources with fixed interest rates and terms of up to 28 years. For the first time in Austria, the EIB financing will make it possible to secure the current, historically low interest rates for newly built rental housing over almost three decades.
Tenants in subsidised housing developments across Austria built by social housing associations receiving long-term, low-interest loans stand to benefit. The loans will be granted over the next three years.
The funds are expected to be used in urban areas where demand for affordable housing is particularly high. An initial EUR 50m tranche from the EIB was already signed in March 2019, while the second EUR 50m tranche was signed by Erste Bank CEO Stefan Dörfler and EIB Vice-President Andrew McDowell in Vienna on Monday.
EIB Vice-President responsible for activities in Austria Andrew McDowell made the following comment on the signing: “Accommodation in Europe's cities is becoming increasingly unaffordable for many people, and Austria is no exception. That's why the EU bank is aiming to work with trusted partners in the Member States to support affordable housing by providing favourable financing with long maturities. To this end, I very much appreciate having an experienced and reliable Austrian partner in Erste Bank, with which we have had an excellent working relationship for many years.”
Erste Bank CEO Stefan Dörfler said:“Erste Bank und Sparkassen was founded 200 years ago to provide support, promote growth and make the future possible for local people. With this agreement, Erste Bank is – in line with its founding mission – making a substantial contribution to the provision of affordable long-term housing for the community. I would like to take this opportunity to thank the EIB for this meaningful, appropriate collaboration for the future of thousands of people and families.
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