New business with private real estate loans collapsed in February. The year-on-year decline is even stronger than in January.
(Photo: mauritius images / Rupert OberhŠuser)
Frankfurt The construction financing business fell even further in February. Compared to the same month last year, new business with private real estate loans in Germany fell by 54 percent – the sharpest slump ever, as determined by the analysis company Barkow Consulting based on data from the European Central Bank (ECB).
New business amounted to twelve billion euros in February. This is the lowest value since the beginning of 2010. “Despite the halving compared to the previous year, new business currently seems to be stabilizing at a very weak level,” said Managing Director Peter Barkow.
In January, new business was 12.7 billion euros. According to Barkow Consulting, it was the weakest start to the year since the time series began in 2003.
The reasons for the slump are the significantly increased construction interest rates, higher material prices and general uncertainty. The burden on borrowers is growing due to the higher construction interest rates and the fact that real estate prices have hardly fallen.
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