German real estate lender confidence climbs in Q3 2025

The latest BF.Quartalsbarometer report for Q3 2025 indicates a continued positive trend in the sentiment of commercial real estate financiers in Germany. 

Professor Steffen Sebastian & Francesco Fedele

The sentiment index, while still negative, improved significantly, climbing from -9.58 in Q2 to -7.04, marking the most optimistic outlook since Q1 2022.
Among those polled, 70.3% reported stable liquidity costs for their banks, a substantial increase from the 41.2% in the previous quarter. Only 18.9% of respondents anticipated further increases in refinancing premiums in Q3, compared to 50% in Q2. This suggests a more stable and predictable financial environment for lenders.
Approximately half of the surveyed finance experts observed growth in new lending activity. The proportion of loans in the €10-50 mln range increased by 3.9%, reaching 39.0% of the total. Conversely, the volume of loans below €10 mln saw a marginal decrease of 4.7 percentage points, now accounting for 43.9% of the lending landscape.
Both loan-to-value (LTV) ratios for existing properties and loan-to-cost (LTC) ratios for developments experienced slight contractions. LTV ratios edged down from 61.94% to 61.05%, while LTC ratios declined from 70.30% to 69.68%. Simultaneously, lending margins witnessed a notable decline. For standing properties, the average margin decreased from 225.2 to 203.5 basis points, while for developments, it fell from 331.5 to 302.1 basis points. 
Professor Steffen Sebastian, tenured chair of real estate financing at the International Real Estate Business School (IREBS) of the University of Regensburg and scientific adviser of the BF.Quartalsbarometer, commented: “The fact that banks have begun to finance larger volumes again is evidence that they have their refinancing business under control and are therefore able to become active in this segment. This coincides with a stable market recovery even though we still have a long way to go to achieve a well-balanced financing market. With the US-EU tariff dispute settled for the time being and with comprehensive economic policy incentives planned by the German Government, many market operators now take a brighter view of the future than they did until a short while ago.” 
Francesco Fedele, the CEO of BF.direkt AG, added: “Notably, in terms of the types of use financed, office properties are almost on a par with logistics properties and continue to rank high in the popularity scale. So, it is fair to say that the asset class is anything but in decline: 69.8 percent of the respondents are currently financing standing office properties, while 53.5 percent finance office developments. This arguably reflects a positive trend. It shows that commercial real estate financing has become more competitive again. I noted that new players have entered the market as well. More competition means that lenders need to lower their margins. Add to this that falling margins indicate declining risk.” 
The majority of the participants (79%) of the BF.Quartalsbarometer survey do not believe that foreign lenders had increased their presence in the German financing market. However, most finance experts view international investors as a stabilizing force in Germany's real estate market, with very few considering them a threat. Furthermore, they noted a resurgence of interest from Anglo-Saxon investors in the German market.
The BF.Quartalsbarometer, created by bulwiengesa AG for BF.direkt AG, is based on a quarterly survey of approximately 110 experts directly involved in approving real estate loans.