German bausparkassen expect new business to decline

Deutsche Bausparkassen expects a decline in new business this year. On the one hand, the reasons for this lie in the continuing low interest rate policy. On the other hand, more and more people are turning to other financing options, such as real estate loans or government subsidy programs.

In addition, competition in this market segment has increased significantly in recent years. Neobanks and fintech companies are offering innovative financing solutions, putting pressure on Bausparkassen.

The decline in new business will also have an impact on the business results of the Bausparkassen. These expect to see a decline in revenue and profits in 2021, meaning they will have to find new ways to keep their business profitable.

It remains to be seen how the building societies will respond to the challenges and what new products or solutions they will offer. One thing is certain, however: the market for construction financing will continue to change significantly in the future and will require companies to be able to adapt quickly.

Forecast for new business at German Bausparkassen negative

German building and loan associations must prepare for a downturn in new business. Experts forecast a significant year-on-year decline for the current year. In particular, the ongoing low-interest phase and stricter regulations are weighing on the sector.

Building societies are expected to attract fewer new customers this year and build fewer than last year. The crisis in the sector is ultimately also leading to banks granting fewer loans. For builders and home buyers, this means higher borrowing costs and delayed loan approvals.

• the low-interest phase
• The stricter regulations
• the high cost of construction

Experts believe that building societies will continue to be under pressure in the future. A change in policy and a move away from lower interest rates are probably the only long-term solutions.

Measures and strategies to counter the decline in new business

German home savings banks are currently expecting a drop in new business. But there are measures and strategies to counter this trend. One option is to target young people, who are often still at the beginning of their financial planning and need long-term construction financing. Close cooperation with banks and other financial service providers can be useful here. Marketing campaigns and targeted offers for specific target groups can also boost new business.

Another important factor is digitalization. It is important that building societies meet the demands of today and offer their customers a modern and easy way to manage their financial affairs online. This also includes the development of innovative products and services that are tailored to customers’ needs and offer an attractive return on investment.

• Introducing new products, such as sustainable home loans, could be another step to boost new business.
• It is also important for building societies to work closely with their customers and respond to their needs.
• Developing individual solutions tailored to the financial situation of each customer can help win customer trust and improve new business.

Overall, measures and strategies are needed to counteract the decline in new business. Close cooperation with banks and other financial service providers, digitalization, and the development of innovative products and services can help to revive new business. In addition, it is important for building societies to work closely with their customers and offer customized solutions to gain customer trust and build long-term customer relationships.