German real estate faces refinancing squeeze, cautiously optimistic

The latest Berlin Hyp Trendbarometer survey of over 130 real estate professionals reveals a mixed outlook for the German commercial real estate market in 2026, characterised by ongoing challenges and some cautious optimism.

Trendbarometer - BerlinHyp

Interest Rate Stabilisation & Market Confidence: 76% of respondents believe stabilising interest rates will be the most significant positive factor, leading to more predictable financing and potentially boosting transaction volumes. The persistent high demand in the residential sector (53%) is another beacon of hope, likely maintaining high rental levels.
Refinancing Pressure: A substantial 66% of professionals anticipate medium to high refinancing risk for their portfolios due to higher interest rates, decreased mortgage lending values, and stricter bank lending. To mitigate this, firms plan to inject equity (46%), extend loan maturities (45%), and selectively sell assets (30%).
"Building Turbo" - Delayed Impact: While the "building turbo" initiative aims to accelerate construction through faster approvals (87%), digitalisation (45%), and standardisation (40%), 61% of respondents are sceptical about seeing noticeable relief as early as 2026. Implementation delays and external factors like construction costs and skilled worker shortages mean its effects are expected only in the medium term.
German Market in European Context: The German real estate market is viewed as generally solid by European standards, though attractiveness is uneven. While 44% see it as unchanged, 23% find it more attractive, and 34% find it less attractive. Germany's reliability and transparency are strengths, but regulatory pressure, high costs, and slow procedures temper enthusiasm, making capital flows more selective.
Sascha Klaus, chair of the Board of Management at Berlin Hyp and member of the Board of Managing Directors at LBBW, commented: “The market — especially in Germany — apparently needs more time to recover. The results of the current trendbarometer clearly show that the market continues to face challenges. Nevertheless, much points to further stabilisation in the coming year. The forthcoming refinancing issues are known in the market — the approach remains pragmatic, and the refinancing wave is being handled in a structured manner. Banks will, in principle, support refinancings only where they can be economically justified — beyond that, little leeway is to be expected.”
For over a decade, Berlin Hyp has conducted its "Trendbarometer" expert survey, with the latest edition in December 2025 gathering insights from more than 130 real estate professionals.