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German Mortgage Lending in December Maybe Marginally Less Horrible

Another day, another bad news for the German mortgage market. Just after having published our recent analysis about a record decline of mortgage new business volumes in November based on central bank data, it now seems that December might be almost as ugly. Santa, apparently had not much appetiet to mortgage up at skyrocketing interest rates.

Since the Corona pandemic, alternative data has been provided by the Federal Statistical Office, which probably essentially evaluates the number of newly concluded mortgages on the basis of SCHUFA inquiries. Although the data are perhaps somewhat less representative, they are reported more promptly and therefore now extend to the end of December.

The annual growth rate of the SCHUFA data turned already negative at the beginning of June. The most recent data point for December is, however, down 29% YoY. Undoubtedly, this is better than the record decline of 36% in November. Equally undoubtedly it is however still an ugly data print and does not point to any relief at all. The final week of 2022 at minus 38% was particularly disappointing, though we are unsure about volumes generally in the week of New Year’s Eve.

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