Alarming trends: 8.2 % of the residential loans are no longer incorporated!

Alarming trends: 8.2 % of the residential loans are no longer incorporated!

Frankfurt am Main, Deutschland - On June 12, 2025, alarming numbers for the development of commercial property loans and housing project financing are focused on. According to OTS can no longer be obtained. An even higher value is recorded for residential construction project financing, where 8.2 % of the loans are in a similar location and the tendency is still increasing. The central bank has pointed out this worrying development and demands urgent need for action.

The freedom economy has requested specific solutions to stabilize the industry. This includes the introduction of stabilization measures for affected borrowers and the creation of funding programs for sustainable projects. Furthermore, an adjustment of the lending criteria in order to enable more realistic reviews are considered necessary. René Schachner, the newly elected federal division chairman Deputy, underlines the essential importance of stabilization for securing jobs.

vacancy and conversion of commercial properties

A comprehensive problem that tightens the situation is the Germany -wide vacancy in commercial properties, especially in the areas of offices and retail. The decline in demand, influenced by the economic development and the covid pandemic, makes conversions of commercial properties more and more relevant. Numbers from the Pestel Institute and the Arge building research institute show a potential of up to 235,000 new residential units through corresponding measures. This conversion could not only save space, but also building materials and also offers an advantageous ecological balance sheet, especially in the case of demanding renovations, such as BMWSB explained.

For owners and investors, there are opportunities for funding from the climate and transformation fund (KTF), provided that commercial properties meet the corresponding BEG funding conditions. In addition, an additional KfW funding program with a volume of 480 million euros was launched for the years 2024 and 2025, which is intended to support the climate-friendly renovation and elimination of vacancy.

Rental price development on the real estate market

The rental price development in the field of commercial properties is also influenced by various factors. According to a report by the German Economy Institute, the office areas in 2022 increased by 5.9 % compared to the previous year, while rents for retail objects even increased by 6.2 %. However, these increases are below the inflation rate of 7.9 %, which illustrates the challenges in the sector. The Property Post reports that the average rental price development for retail objects is 3.2 % per year, while an average increase of 4.4 % is recorded.

Especially in cities such as Frankfurt am Main, Berlin and Düsseldorf, strong rent increases in retail are observed, whereby the rental price developments in 16 metropolises tend to be below the national average. These regional differences and the decline in the situation premiums illustrate the current challenges and changes in the retail market.