KPMG: Romanian Real Estate Sector, Least Attractive In CEE For Banks

The classification was drawn up according to the Property Financing Sentiment Index that presents how positive is the banks' approach regarding the real estate projects in each of the analyzed countries. The index was calculated according to ten relevant criteria that refer, mainly, to risk, profits, interests and the openness of the banks to finance new development projects.

According to responses of 50 banks operating in CEE real estate market, Romania ranks last among 8 countries included in the survey, with the first positions being held by Poland, the Czech Republic, Slovakia and Hungary. Bulgaria also overran Romania in KPMG's classification.

In Poland and the Czech Republic, the banks are more positive about financing real estate projects, than elsewhere in the region, the survey says.

"In recession, the countries whose real estate sectors have suffered the most are those which saw a lot of speculative investment up to 2008, as was the case in Romania. But Romania has a lot of potential in the long term, and prospects are good for sustained growth in 2011. This is bound to have a positive effect on the real estate sector as confidence returns," the survey reads.

Provision levels are considered relatively low in most CEE countries, while they are considered relatively high in Romania and Slovakia.

Banks' preferences are inconsistent and vary from country to country, KPMG also noted.

Thus, in Hungary, the Czech Republic and Bulgaria, retail is the first priority, whilst in Poland and Romania the office sector is the most preferred. In Slovakia, Croatia and the Baltic countries, the industrial/logistic sector is at the top of the priority list, whilst the hotel sector is generally the least preferred one, except for Croatia and Hungary, the survey reads.

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