Published by Global Banking & Finance Review®
Posted on May 22, 2025
1 min readLast updated: January 23, 2026
Add as preferred source on GoogleGerman office loan volume dropped 26% in Q1, reflecting real estate sector challenges due to high interest rates and increased remote work.
FRANKFURT (Reuters) -The volume of loans to finance office buildings fell sharply in the first three months of the year, Germany's VDP banking association said on Thursday, a grim sign as the nation's real estate sector grapples with its worst crisis in decades.
Germany's property sector hit hard times in 2022, with offices coming under particular stress as higher interest rates made borrowing costly and more people worked from home. That resulted in falling prices, and it tipped some property firms into insolvency.
The VDP data showed loans for offices dropped 26% in the first quarter to 4.3 billion euros ($4.87 billion), down from 5.8 billion euros a year earlier. The level is also lower than the 4.7 billion euros in loans recorded in the first quarter of 2023.
The drop in loan volume contrasts with increases in loans for residential property, as well as other forms of commercial property, including hotel and retail property.
The decline comes despite a recent rise in commercial property prices.
($1 = 0.8834 euros)
(Reporting by Tom SimsEditing by Madeline Chambers)
Loans for offices dropped 26% in the first quarter to 4.3 billion euros.
The drop in loan volume for offices contrasts with increases in loans for residential property and other commercial properties.
Higher interest rates made borrowing costly, and the shift to remote work has stressed the office sector.
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