Banks on real estate market: hundreds of auctions, only a few dozen properties sold

Raiffeisen Bank, one of the top-ranking banks by asset value, has organised auctions to sell foreclosed properties from clients no longer able to pay their instalments in each month of 2010, but at the end of the year it only has 21 sold properties.

The real estate market is frozen, bankers are now finding out, though they are reluctant to come up with discounts of more than 25% on the prices at which the properties had been valued when the economy was growing full steam ahead.
Most banks asked by ZF to supply data on the auctions were unwilling to comply, although all players - from the leaders of the banking sector to the smallest players, have created special sections on their websites for the "offer" of foreclosed property.
"We organised auctions throughout the year, but we've only seen interest towards the end of the year. We have properties where we are at our 12th or 15th auction and only now do we see a certain amount of interest. Investments have started to appear, buyers are coming, but this means we are just above zero," says Iuliu Mureşan, vice-president in charge of risk management at Bank Leumi, a small player. The bank currently has 75 foreclosed properties for sale.