The German real estate financing market gained significant momentum in 2025. The Association of German Pfandbrief Banks (vdp) reports that the volume of new business at the institutions affiliated with the association rose by 15.7 percent to €148.6 billion in 2025. The vdp sees this development as a sign of a gradual market recovery.
A particularly strong upswing was recorded in the residential real estate segment. The volume of loans disbursed reached €92.6 billion in 2025, representing an increase of 17.5 percent. This segment thus continued to make up the majority of the financing volume. Within the residential segment, single-family and two-family homes represented by far the largest share of total financing. Last year, this figure stood at €44.2 billion, representing a 16.3 percent increase over the previous year. Loans for multi-family homes totaled €22.8 billion (+27.4 percent), and loans for condominiums accounted for €20.7 billion (+15.6 percent).
The financing volume for commercial real estate also rose, albeit at a somewhat more moderate rate of 12.9 percent. Office properties continue to play a dominant role, accounting for more than half of new business. However, the commercial market remains in a process of structural adjustment.
Over the course of the year, lending activities stabilized over the year and peaked in the fourth quarter of 2025. The growing demand for financing is not limited to existing properties but—in parallel with a slight increase in building permits—is increasingly supporting new construction. This is a positive signal, particularly for high-growth regions such as Berlin and its surrounding areas, where demand for additional housing remains particularly high.
Despite the positive trend in new business, the total volume of real estate financing remained stable at around €1.04 trillion. While residential real estate saw a slight increase, commercial real estate saw a decline. This underscores the greater stability and attractiveness of the residential segment, particularly in tight markets.
“The significant increase in real estate financing sends a strong signal to the entire market. In the residential segment in particular, we see that demand remains high and is increasingly being reflected also in new construction. For Berlin and its surrounding areas, this means a stronger foundation for investment in urgently needed housing,” says Jacopo Mingazzini, CEO of The Grounds. “For this trend to continue, it is now crucial to further improve the regulatory framework for housing construction and to better enable targeted investments.”
