The German mortgage lending market has completely collapsed. A consulting firm said that February’s 54% drop from the same month last year was the biggest drop ever.
Barkow Consulting says that the number of new home loans in Germany dropped by more than half in February compared to the same month last year.
The latest report from the consulting firm shows that mortgage lending in the largest economy in the Eurozone fell by a record 54% in one year. “The drop in March will be even bigger because of the base effect since the record amount of new business in 2022 was €32,3 billion,” the article said.
The agency in Düsseldorf said that the amount of new mortgage business in February 2022, at €12 billion ($13 billion), is the lowest since February 2010. “And this doesn’t even take into account the fact that home prices are going up,” it said.
Reuters says that the rising cost of living and quickly rising interest rates have put pressure on Germans, forcing many to give up their dreams of owning a home. A recent poll of analysts by the news agency showed that home prices in the country are expected to fall more sharply than was thought before. This is because higher interest rates will make people less likely to buy homes. The average price of a home in Germany is expected to go down by 5.8% this year and by 2.5% next year.
In February, the German Property Federation said that the country’s housing shortage was at its worst in 20 years. They also said that new housing construction is likely to slow down over the next year.