The BF.Quartalsbarometer, compiled by BF.direkt AG in cooperation with the Handelsblatt Research Institute, records an improvement in market sentiment among commercial real estate financiers for the third quarter of 2026. Although the barometer value, at -12.30 points, remains in negative territory, this represents a significant recovery compared to the previous quarter, when the value stood at -25.97 points. This development is largely supported by various parameters indicating a slight stabilisation of the financing market.
A positive trend is particularly evident in new business. According to reports, 35 per cent of respondents reported an increase in new business, which is up from 23 per cent in the second quarter. The proportion of financiers who registered declining new business fell to zero per cent, having been 23 per cent in the previous quarter. The majority of the remaining respondents observed stagnant new business. Financing conditions have also stabilised from the experts' perspective: only 15 per cent of respondents stated that conditions had worsened compared to the previous quarter, a significant drop from 46 per cent in the second quarter. 80 per cent of experts assessed financing conditions in the third quarter as unchanged.
Margins and loan parameters
The probability of Non-performing Loans (NPLs) has marginally decreased. The proportion of respondents who observed an increase in their NPL ratio over the last three months fell from 31 to 25 per cent. At 50 per cent of institutions, the ratio remained unchanged, while for 15 per cent it even decreased. In the area of existing property financing, the average margin is 156 basis points (bp), which corresponds to a slight decrease of just under two bp compared to the second quarter. Residential properties show the lowest average margin at 120 bp, while supermarkets have the highest margin at 170 bp.
For the financing of development projects, the average margin rose by almost four to 273 bp. In this segment, institutions are demanding the highest margins for office buildings (309 bp) and the lowest for logistics properties (210 bp) in the third quarter. The average Loan-to-Value (LTV) for existing property financing is 64.5 per cent, almost on par with the previous quarter. The Loan-to-Cost (LTC) for development projects increased slightly to 67.9 per cent.
Interest rate development and paradigm shift
Fabio Carrozza, Chief Sales Officer at BF.direkt AG, comments on the development by stating that despite the continued negative barometer value, the significant improvement is remarkable and more institutions are reporting increasing new business. He points out, however, that higher financing costs represent a significant challenge for all market participants. He also notes that the ECB's latest key interest rate hike occurred after the survey was completed, meaning its direct impact on the present results cannot yet be reliably assessed. A larger majority of 75 per cent of respondents now expect interest rates for ten-year fixed-rate financing to be higher at year-end than at present; in the second quarter, this figure was still 69 per cent.
Professor Dr. Steffen Sebastian, holder of the Chair of Real Estate Finance at IREBS and scientific advisor to the BF.Quartalsbarometer, describes a new development in which real interest rates have risen independently of inflation. He anticipates the permanence of this development and predicts that interest rates will not fall to their former level even with low inflation. This marks the end of the low-interest rate phase and a fundamental paradigm shift. In addition to higher interest rates, political and economic security has also decreased. Investors must prepare to make decisions under significantly greater uncertainty.
