According to data from the banking association vdp, projections show a modest increase in new real estate financing in Germany following a significant downturn last year owing to the worst property market crash in several decades. Financing for the construction and purchase of residential and commercial properties fell by 31.3% in 2023, with a total value of EUR 110.0 billion.
Lending for commercial property construction saw a decrease of 23.8%, while credit for residential properties contracted by 35.8%. Despite these figures, the fourth quarter of the year showed a 5.2% year-on-year increase in new real estate financing, even though this period is customarily seen as the lowest.
Jens Tolckmitt, the Chief Executive of the vdp, said, "The rise in real estate loans in the fourth quarter of 2023, compared to the previous year, suggests that financing activity is on the path to stabilization." He continued, "Given that loan interest rates appear to have reached their upper limit, and there's increased predictability concerning financing conditions, we anticipate a slight resurgence in new real estate financing activity for the current year, 2024."
