Thursday, 5 February 2026
Senior figures from across the German and European real estate finance sector have broadly welcomed the European Central Bank’s decision to leave key interest rates unchanged at the start of 2026, describing the move as a stabilising factor for both property and capital markets. Executives and academics note that while borrowing conditions remain demanding, the predictability of monetary policy is currently seen as more valuable than premature rate cuts, particularly as service-sector inflation and geopolitical uncertainties continue to influence the economic outlook.
Statement by Francesco Fedele, CEO of BF.direkt AG: “The ECB’s decision to keep key interest rates at their current level is correct and consistent. While inflation in the Eurozone has fallen to 1.7 percent compared to January 2025, the lowest level since September 2024, this slight weakening is not yet a reason for the central bank to lower key interest rates, especially since inflation in the services sector remains high at 3.2 percent.
For the real estate industry, the current interest rate level is challenging, but predictable. This predictability is currently more important than rapid interest rate cuts, which would raise false expectations given the renewed rise in inflation. Price pressure remains high, particularly in the service sector and with regard to wage-driven costs.
The real estate market is functioning, albeit selectively. While residential and logistics properties remain relatively stable, other asset classes continue to face pressure to adjust. Financing is still being secured, but only on the basis of viable business models and realistic valuations. Against this backdrop, monetary policy stability is currently the most important contribution of the ECB.” ECB to calm the markets.
Statement by Prof. Dr. Steffen Sebastian, Chair of Real Estate Finance, IREBS Institute for Real Estate Economics, University of Regensburg: “While other central banks have already implemented interest rate cuts, the ECB remains committed to its stability-oriented course. This strengthens its credibility and prevents higher inflation expectations from taking hold in the capital market – a risk that would be particularly problematic for long-term financing. For the real estate and credit markets, the pause in interest rate cuts does not mean relief, but it does mean stability. In the current phase, restraint is the lesser of two evils. Only when the decline in inflation proves to be sustainable will there be room for monetary easing. Until then, discipline is paramount.”
Statement by Michael Morgenroth, Founder and CEO of CAERUS Debt Investments AG: “The ECB’s decision to keep interest rates stable since mid-2025 is not surprising to us. It continues its course of cautious, data-driven normalization and avoids creating new uncertainties for businesses and households. In December 2025, inflation in the eurozone fell below the ECB’s target of 2 percent for the first time in months, at 1.9 percent. Inflation in Germany was also moderate at 1.8 percent. At the same time, the eurozone economy is expanding at a moderate pace of just over one percent per year, which argues against tightening monetary policy. A stable interest rate supports this fragile recovery, stabilizes financing conditions, and simultaneously allows the ECB to react flexibly to a renewed acceleration in inflation or an unexpected slowdown in growth. As long as no new inflation risks emerge, we believe the ECB will continue to prioritize continuity and a longer period of stable interest rates.”
Statement by Prof. Dr. Felix Schindler, Head of Research & Strategy, HIH Invest: “The ECB is continuing its current course at its first meeting in 2026, keeping key interest rates at their current level. This interest rate decision by the ECB was expected by market participants in the capital markets as well as in the real estate markets. Inflation rates in the Eurozone and Germany remain within the ECB’s target corridor at the start of the year. Base effects in energy prices and exchange rate effects are expected to subside over the course of the year. The core inflation rate – driven by the services sector – remains above the target and will continue to be monitored. High geopolitical uncertainties and high volatility in the capital markets are also expected to persist throughout the year. The ECB is therefore currently in a comfortable position to react accordingly if necessary.”
Photo (left to right): Francesco Fedele, CEO of BF.direkt AG, Prof. Dr. Steffen Sebastian, Chair of Real Estate Finance, IREBS Institute for Real Estate Economics, University of Regensburg, Michael Morgenroth, Founder and CEO of CAERUS Debt Investments AG and Prof. Dr. Felix Schindler, Head of Research & Strategy, HIH Invest
