In the period from January to June 2026, institutions belonging to the Association of German Pfandbrief Banks (vdp) extended property loans totalling EUR 80.4 billion. This marks an increase of 8.5% compared to the first half of 2025, when EUR 74.1 billion was granted. Residential property loans continued to account for the largest share of this financing business at 62.3%. Their volume amounted to EUR 50.1 billion in the first half of 2026, representing a rise of 5.3% compared to EUR 47.6 billion in the previous year.
Lending for commercial properties recorded a stronger growth rate of 14.3% but still reached a historically low level at EUR 30.3 billion. In the first half of 2025, this volume stood at EUR 26.5 billion. Jens Tolckmitt, Chief Executive of the vdp, stated that new property financing business for Pfandbrief banks showed increases in the first half of 2026 and that development in this segment was solid. However, he stressed that lending volumes remained significantly below those recorded before the interest rate turnaround.
Outlook and Political Demands
For the second half of 2026, Mr Tolckmitt anticipates at best only slight increases in new business under the prevailing conditions. He assumed that geopolitical uncertainties, general economic weakness, and the tense situation in the housing market would have a dampening effect on property financing. In this context, the Chief Executive appealed to politicians to increasingly promote homeownership for private households. He pointed out that owning one's home remains the best form of old-age provision. The high proportion of rental flats in Germany clearly illustrates the great potential of consistent homeownership promotion.
As a concrete measure, Mr Tolckmitt mentioned a possible reduction in the property transfer tax for owner-occupiers. This could significantly lower the barriers to homeownership, reduce the need for external capital, and thus make property acquisition more affordable. Additionally, this would contribute to easing the burden on the rental housing market.
Development by Property Classes
The increase in the volume of residential property loans to EUR 50.1 billion in the first half of 2026 was driven by gains in almost all property classes. Particularly noteworthy is the relative increase of 7.3% for loans for multi-family homes, which reached a volume of EUR 13.2 billion. Financing for condominiums and for single- and two-family homes recorded growth rates of 6.7% and 4.0%, respectively, with volumes of EUR 11.2 billion and EUR 23.2 billion. Lending for other residential properties, including building land, matched the previous year's figure at EUR 2.5 billion.
In the commercial property financing sector, the volume increase to EUR 30.3 billion primarily stemmed from financing for retail properties, which rose by 40.6% to EUR 9.0 billion. Loans for office properties (EUR 14.8 billion) and hotels (EUR 2.4 billion) showed growth rates of 9.6% and 9.1%, respectively. In contrast, new business for industrial properties (EUR 0.5 billion) and other commercially used properties (EUR 3.6 billion) showed a decline, with decreases of 16.7% and 5.3%, respectively.
Loan portfolios developed in opposite directions: newly granted residential property loans led to a moderate portfolio increase of 1.3% to EUR 762.9 billion as of 30 June 2026. The commercial property financing portfolio, however, decreased by 3.5% to EUR 278.4 billion, as new business was insufficient to offset repayments. The total property loan portfolio remained at the previous year's level of EUR 1,041.3 billion.
