FRANKFURT (dpa-AFX) - After the past year of crisis on the real estate market, the Association of German Pfandbanks (VDP) expects a slight upturn in the real estate loan business in 2024. "The fact that more real estate loans were granted in the final quarter of 2023 than in the same quarter of the previous year indicates that the financing business is beginning to stabilize," said Managing Director Jens Tolckmitt on Wednesday. As lending rates have apparently peaked and there is greater planning security for financing, a slight upturn in new real estate financing business is expected.

The crisis, with a record fall in residential property prices and turbulence surrounding commercial real estate, was also reflected in the new business of the association's member banks in 2023. They approved loans for the construction and acquisition of residential and commercial real estate in the amount of 110 billion euros, a slump of a good 31 percent compared to 2022. At almost 24 percent, the decline in commercial real estate loans was lower than in residential real estate loans (35.8 percent). The association represents the most important real estate financiers, including Deutsche Bank, Commerzbank, major savings banks, Landesbanken and specialist financiers.

The real estate financing business was booming until spring 2022, but the sharp rise in lending rates put an end to the boom. Consumers held back, as did large investors. With inflation falling, the European Central Bank is now expected to cut key interest rates in June. Building interest rates have fallen noticeably since October, which is raising hopes of a recovery in the real estate sector./als/DP/ngu