Are banks granting loans more restrictively?

Hello!

In recent months, I have occasionally heard in my circle that people have not been able to obtain construction financing. Financing that I would say probably would have gone through at the beginning of 2020. Have you had this experience as well? Do you think this is related to Corona, that banks have become significantly more cautious? Or that property prices have risen sharply despite or because of Corona, and therefore the requested prices often lag behind the banks' appraisal values? What other reasons could there be?

I look forward to your assessments and reports of experiences from across the country.

No other requirements at most banks. Definitely not with us ([ein paar Mrd. € Neugeschäft 2020]). Maybe prices and lending values no longer match in some regions. But it has nothing to do with Corona.

No other requirements at most banks.

Most banks reported this differently in some respects, see bank lending survey. No tightening in 2020 generally for private individuals is definitely not correct.

I wouldn't say that now. They would gladly throw 120-130*net income after us, which I think is completely insane. 40% of the household net income is absolutely not a problem, if necessary at the beginning with only 2% repayment, also totally crazy. So I have more the opposite feeling: As soon as it fits reasonably well, banks just can't get rid of enough money.

No or little equity? No problem, you can "catch up on savings" through consumer loans like Hanseatic (for example). So, I don't know what kind of people are in your environment who no longer get construction financing. Here, everyone seems to be able to finance their 500k+ as soon as they earn even slightly above average.

We (the bank) had the most successful year for construction financing ever in 2020, that much is already certain. So I cannot confirm more rejections. What I hear in passing, however, is that the equity ratio is increasingly leaving something to be desired. Which is also not surprising, since prices are rising faster than incomes. From the demand side, we hardly notice anything from Corona. Most people know exactly what they can or want to afford financially.

We completed our financing with a local bank at the end of 2020. One third of the total costs + land and incidental expenses as equity, 4% repayment. Among others, HVB rejected us due to the lending value, as we are building in a village 5 km away from the nearest town. For the same project in the city, we would have gotten the financing without any problems. I would assume that the lending value now plays a bigger role. For example, Schwäbisch Hall would have accepted a whole 3,000€ for a masonry garage with a gable roof.