BF.Quartalsbarometer Q1-2026: Sentiment Remains Glum Despite Upturn in New Lending and Downturn in NPLs

• Relaunch of the BF.Quartalsbarometer in collaboration with the Handelsblatt Research Institute
• Competition among real estate lenders intensifying
• Average lending margin at 169 bps for existing real estate, 262 bps for property developments

Stuttgart, 14 April 2026 – Sentiment among commercial real estate lenders was muted during the first quarter of 2026. This is according to the new BF.Quartalsbarometer, which has just been redesigned in collaboration with the Handelsblatt Research Institute. The latest barometer survey was conducted between 16 and 20 March 2026, meaning that responses already reflected awareness of the war in Iran. The recalibrated barometer score of currently
-9.74 points signals a generally limited willingness to finance. Almost 27 percent of the respondents believe that financing conditions on the market have deteriorated over the past three months, whereas 68 percent reported a stable trend. A mere five percent feel that things have improved.

Professor Dr. Steffen Sebastian, tenured chair of real estate financing at the International Real Estate Business School (IREBS) of the University of Regensburg and scientific advisor of the BF.Quartalsbarometer, said: “Not least, the results should be seen in the context of the Iran conflict. And while markets have acknowledged the situation with amazing calm, their composure is fraying at the edges. In my opinion, a scenario of stagnating growth in sync with a higher inflation rate has now become more likely. The predicament in real estate financing has less to do with the absolute level of interest rates than with the fact that the interest environment could be destabilised again at any time.”

As far as new lendings in the segment of commercial real estate financing go, close to 73 percent of the respondents report stagnation, while well over 27 percent experienced growth in their business volumes. The assessment of the competitive landscape presents a similar picture: Roughly three out of four respondents are unaware of any quarter-on-quarter change. That said, the majority of the remaining 25 percent report intensifying competition in the market. “We, too, noted over the past few months that competition among financiers has picked up a little momentum again. This represents a positive signal for the market because it indicates a greater willingness to finance and because it puts a damper on margins,” said Francesco Fedele, CEO of BF.direkt AG.

Private Equity Most in Demand among Alternative Financing Instruments

Compared to classic bank loans, demand for alternative financing instruments has increased since the fourth quarter of 2025, according to 41.2 percent of the respondents. The strongest demand is for real estate private equity, which may take the form of equity provided by joint venture partners, for instance.

When asked how the ratio of non-performing loans (NPLs) had changed since the previous quarter, 32 percent suggested that the ratio had fallen, with only 18 percent reporting an increase. For 41 percent, the ratio flatlined, while the remaining respondents preferred not to say. Fabio Carrozza, Chief Sales Officer (CSO) at BF.direkt AG, commented: “On the one hand, the fact that NPL rates are subject to a downward trend points to a more favourable situation on the financing market while, on the other hand, the same thing is reflected by the base level that we have now reached.”

Margins Extending over Wide Spectrum

Across all survey responses, the average margin in existing real estate financing is 169 basis points (bps). “However, margins move within a large bandwidth among the various banks and use classes, with individual rates anywhere between 110 and 400 bps. A differentiated look at the asset classes reveals serious differences,” said Dr. Sven Jung, Director Economic Analysis & Financial Planning at the Handelsblatt Research Institute. For instance, residential real estate has the lowest average margin at 144 bps whereas office real estate financing is found at the high end with an average of 181 bps. The average loan-to-value ratio for existing real estate financing across all types of use is 63.52 percent.

The average margin in property development financing equals 262 bps, though it should be added that actual margins range from 110 all the way to 800 bps. Within the property development segment, banks charge the highest margins for residential real estate, the average being 309 bps. At the low end of the spectrum are logistics warehouses with 201 bps. The average loan-to-cost ratio for property developments is 71.32 percent.

About the Methodology

The BF.Quartalsbarometer is compiled by the Handelsblatt Research Institute on behalf of BF.direkt AG, a real asset finance specialist. Scientific advisor of the BF.Quartalsbarometer is Prof. Dr. Steffen Sebastian, tenured chair of real estate financing at the International Real Estate Business School (IREBS) of the University of Regensburg. The index comprehensively maps the sentiment and business climate among real estate lenders in Germany.

For the survey underlying the BF.Quartalsbarometer, a total of currently 33 experts are polled four times a year, all of whom are directly responsible for approving loans to real estate companies. Among the panel members are representatives of diverse banks and other types of financiers.

The BF.Quartalsbarometer score reflects survey responses on the following aspects: assessment of current financing conditions, the trend in new lending, average loan volume per transaction, the department responsible for loan decisions, development of the NPL ratio, the importance of alternative funding options, and the evolution of the competitive landscape.