The Q3 barometer, compiled by analytics firm Bulwiengesa, plunged from -12.01 points in the previous quarter down to -16.91 points at the last count.

The latest score undercuts even the all-time lowest score of -15.24 points, which was measured during the second quarter of 2020. Foremost among the factors causing the decline was the fact that 82% of the poll respondents reported that financing conditions have become more restrictive. This was up from 68% who said as much during the second quarter.

Manuel Köppel, chief financial officer of BF.direkt, commented: 'The further dip of the barometer score caught us by surprise because the interest rate development did not continue to tighten since the second quarter.

'But economic worries seem to figure more prominently now, for example due to the worsening energy crisis. The situation is compounded by factors that began to downgrade the parameters as early as the second quarter, such as the increase in construction costs and the high inflation.'

In their assessment of new lendings, the respondents followed the trend of the previous quarter, with a decline in new lendings now reported by 37% of the interviewed experts (+22 percentage points) while only 22% registered an increase (-7.6 pp).

The question as to who in a given company has the final say in loan decisions prompted answers that differed significantly from those of the previous quarter. In the eyes of 43% of the experts, loan decisions are influenced mainly by risk departments (+19 pp).

All of the respondents agreed that the decision is no longer solely up to the new-lendings department (-15 pp). 57% of the respondents believe that the recommendations of the risk department and the new-lendings department carry equal weight.

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, commented: 'Risk aversion runs like a thread through the survey panel. The treBF.direkt AG, a specialist for real estate financending properties is now down to 63%, while the loan-to-cost ratios of property developments is at 67%.'

Köppel added: 'The good news is that the financing market as such continues to function properly. Banks and alternative lenders are definitely willing to provide financing but like to keep an eye on risk and take a more selective approach.'

Compared to the fourth quarter of 2019, the last one unaffected by the coronavirus crisis, margins have gone up considerably, from 127 to 172 basis points for portfolio financing, and from 201 up to 291 basis points for project development financing.

While the margins for project development financing arrangements increased slightly quarter over quarter, they declined by 19 basis points in portfolio financing.