Monday, 6 July 2026
Sentiment among commercial real estate lenders in Germany weakened during the second quarter of 2026, according to the latest BF.Quartalsbarometer published by BF.direkt AG in cooperation with the Handelsblatt Research Institute.
The index fell by 9.74 points quarter-on-quarter to -25.97, indicating a lower willingness among lenders to provide financing. The survey was conducted between 8 and 16 June 2026.
According to the survey, 46.15% of respondents said financing conditions had deteriorated compared with the previous quarter, up from 27.27% in the first quarter. In addition, 23.08% reported a decline in new lending activity, compared with no respondents reporting a decrease in Q1.
The survey also found a shift towards smaller loan transactions. Lending volumes increased for loans below €10 million, while financing activity for transactions between €50 million and €100 million, as well as those exceeding €100 million, declined.
Risk management departments also played a greater role in lending decisions during the quarter. Around 26.92% of respondents said credit decisions were primarily driven by risk departments, compared with 9.10% in the previous quarter, while none indicated that new lending teams had the primary influence over lending decisions.
The survey also pointed to reduced competition among banks for financing transactions. Approximately 26.92% of respondents reported lower interbank competition, compared with 5.88% in the previous quarter. At the same time, 30.77% reported an increase in non-performing loans, up from 18.18% in the first quarter.
Despite the weaker sentiment, lending parameters remained relatively stable. Average loan-to-value (LTV) ratios for existing properties stood at 64.2%, while average loan-to-cost (LTC) ratios for development projects were 66.3%.
Financing margins varied by asset class. For standing assets, average margins ranged from 135 basis points for residential properties to 184.3 basis points for logistics assets. For development projects, margins ranged from 252.7 basis points for residential schemes to 301.1 basis points for office developments.
According to BF.direkt, the survey reflects a more cautious lending environment, with banks becoming increasingly selective in new financing while debt funds continue to provide financing for projects that no longer meet some banks’ lending criteria.
The Quartalsbarometer for Q2 2026 is available for download in German language under the following link: https://www.bf-direkt.de/
