The building interest continues to rise: For building loans with a ten-year fixed interest rate, you now pay an average of 2.77 percent a year.

At the beginning of the year it was only 0.93 percent, a rapid increase.

Five-year building loans are now available for 2.66 percent, 15-year loans for 3.05 percent.

At the same time, building is becoming more expensive because many building materials have risen sharply in price.

The skyrocketing construction costs, the rise in interest rates and possibly more caution on the part of the banks with regard to possible risks could possibly slow down the granting of construction financing in the future.

Christian Siedenbiedel

Editor in Business.

  • Follow I follow

This is the result of a study on construction financing by the consulting firm PwC, which the FAZ has exclusively received in advance.

Accordingly, volume and new business again reached records last year despite Corona - most of the banks surveyed were confident that they would be able to increase new business with construction loans again in the current year despite the turnaround in interest rates.

However, the interest rate level will have “less and less positive influence” on business, write the authors Thomas Rederer and André Hettermann from PwC.

284 billion euros in new building loan business

The volume of outstanding construction loans in Germany rose by 7.2 percent last year to a record value of 1.48 trillion euros.

According to the study, this is a record value.

The percentage increase compared to the previous year was exceptionally high, in 2020 it was 6.6 percent, the year before 5.7 percent.

In the years 2007 and 2008 the stock of building loans in connection with the financial crisis had shrunk for the last time.

Viewed over the whole of 2021, the banks will have new business in construction financing of 284 billion euros, compared to 273 billion euros in the previous year.

Since 2003, there had always been fluctuations in how much building money was lent each year.

However, the annual volume tended to continue to rise.

More people now go to the Volksbank

There have been shifts in which banks people use to finance their homes, as the authors of the study further report.

The cooperative banks were able to increase their market share among the groups of institutions, from 21.6 percent in 2011 to 24.1 percent in 2016 and 25.2 percent in the previous year.

According to the study, the savings banks' market share is still larger and was most recently 30.9 percent.

The share of private banks has recently declined slightly, but at 26.5 percent it is still slightly higher than that of the cooperative banks.

There were also regional differences in the allocation of building finance;

At 10.24 percent, Berlin had the highest growth rate of all federal states, followed by Bavaria.

Schleswig-Holstein brought up the rear with an increase of 4.4 percent.

Banks could become more cautious

The study goes on to say that the banks' margin for construction loans has declined.

On average, it was 1.04 percent last year - a decrease of 0.14 percentage points compared to the previous year.

However, the margin has fluctuated over the years.

The study deals in detail with the mood surrounding construction and construction financing.

Positive factors are that the mood on the housing market is better again after the lockdowns, and consumer confidence is not quite as bad as it was in 2020. The interest rate level is becoming less important as an argument for building.

Debt restructuring and refinancing remained major issues.

There are three factors that could stop the upward trend in the future: Rising inflation - driven by high and still rising energy prices and caused by global crises - is leading to increases in construction and house prices, which are increasingly putting more customers beyond their means.

Rising interest rates would make alternative investment options in the form of securities more attractive.

And the increasing risk pressure on the banks could also lead to more caution in mortgage lending, for example with rising default rates in the consumer credit business.

Keywords: