EstateGuru warns of volatile repayments amid Ukraine crisis
EstateGuru has warned investors that loan repayments could become more volatile in the upcoming months amid the war in Ukraine.
The peer-to-peer lender, which funds property projects in countries including Estonia, Latvia, Lithuania, Germany and the UK, has warned that its borrowers may be affected by the uncertain macroeconomic situation caused by the conflict in the region.
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“Inflation is rising due to higher energy prices and supply shortage of commodities and construction materials from Ukraine, Russia and Belarus,” the platform said in a blog post.
“Our borrowers, who are mostly real estate developers and construction companies, are already feeling the effects of this new reality – prices of steel and wood products have increased and there are longer waiting times as new supply chains are being established.
“As we finance mainly residential developments, we predict that, despite the expected hike in sales prices, the demand will remain strong in all of our markets, and the short-term price increase will be absorbed without major problems.”
EstateGuru said its conservative credit policy should give investors some protection.
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“Even a real estate market decline of nearly 45 per cent wouldn’t, on average, jeopardise our investors’ principal capital,” EstateGuru added.
“Real estate is, and will remain, one of the safest asset classes.
“It should be mentioned that none of our borrowers is subject to any of the sanctions imposed on Russia and Belarus and all our investors’ collateral is in the European Union or NATO countries.
“We have also signed a cooperation agreement with the European Investment Fund which supports the sustainable growth of our business model even further.”
EstateGuru said it is monitoring the markets and will adjust its credit policy if the situation changes.
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