EconomyWorld

German mortgage lending collapses-RT News

February’s 54% year-on-year decline is the worst on record, according to data published by a consultancy

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The volume of new homeowner’s loans in Germany more than halved in February compared to the same month last year, according to data from Barkow Consulting. 

The consultancy’s latest report shows mortgage lending in the Eurozone’s biggest economy nosedived by a record 54% in annual terms. “The decline in March will be even worse due to a base effect, given the record new business of €32.3 billion in 2022,” the publication stated.

The Dusseldorf-based agency noted that the figure for total new mortgage business of €12 billion ($13 billion) in February 2022 is the lowest since February 2010. “And this does not even take into account house price inflation,” it stressed.

The worsening cost-of-living crisis in tandem with rapidly rising interest rates have been putting pressure on Germans, forcing many to forgo dreams of owning a home, Reuters reports. The news agency’s recent poll of analysts showed that home prices in the country are expected to fall more sharply than previously thought as higher interest rates suppress demand. Average home prices in Germany are projected to drop 5.8% this year and 2.5% next year.

READ MORE: Germans warned of more inflation

The German Property Federation reported in February that the housing shortage in the country was at its worst in 20 years, saying that new residential construction is expected to decline over the coming year.

For more stories on economy & finance visit RT’s business section

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