Financial News: German Property Lenders Expect New Real Estate Financing

German Property Lenders Expect New Real Estate Financing To Pick Up Slightly In 2024

03/27/2024 - 07:17:00 (RTTNews)

(RTTNews) - New real estate financing in Germany is set to pick up modestly this year after a massive fall last year amid the worst property market downturn in decades, data from the banking association vdp showed Wednesday. Financing for the construction and acquisition of residential and commercial properties sank 31.3 percent in 2023 to total EUR 110.0 billion, the vdp said.

Loans for commercial property construction decreased 23.8 percent and credit for residential properties shrunk 35.8 percent. However, new real estate financing grew 5.2 percent year-on-year in the fourth quarter, which is otherwise a traditionally lowest time.

"The fact that more real estate loans were granted in the fourth quarter of 2023 year on year indicates that financing activity is beginning to stabilize," vdp's Chief Executive Jens Tolckmitt said.

"Given that interest rates on loans appear to have peaked and planning security has increased with regard to financing conditions, we expect new real estate financing activity to pick up slightly in the current year 2024."

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