The interest rate turnaround of 2022 has caused incorporations of property developers to collapse by almost two thirds. In 2021, 1,575 such companies were formed, in 2023 only 579. At the same time, their insolvency rate has more than tripled. This is shown by an analysis by HDH Group Research of 116,296 corporations in the real estate sector.
Overall, incorporations of property companies fell by 41% between 2021 and 2023, from 8,844 to 5,180. Since 2024 they have been recovering; in 2025 there were 6,884. The recovery is one of holding and managing: companies renting out their own portfolios are being formed almost as often as before the turnaround, property management firms even more often. Property development, by contrast, remains 47% below the 2021 level.
Insolvencies with a one year delay
The collapse in incorporations was followed by a rise in insolvencies. Among property developers, the rate rose from 2.4 ‰ in 2021 to 8.6 ‰ in 2025, in trading in own land to 6.4 ‰. In the second quarter of 2026, 199 insolvencies of property companies were recorded; in the second quarter of 2021 there were 42. Companies renting out their own portfolios remain comparatively stable, because their rental income continues to flow even when interest rates are higher.
The most vulnerable are property developers with the statutory minimum capital. Companies with a share capital of exactly EUR 25,000 reach a rate of 11.1 ‰ in the twelve months to June 2026, those with higher capital 3.5 ‰. Particularly at risk are firms that have existed for five to nineteen years and started their projects before the turnaround at old prices and interest rates.
Method
The analysis covers the corporations of the real estate sector as of 23 October 2026, divided into renting, buying and selling, property development, management on behalf of third parties and brokerage. The insolvency rate of a year relates the cases of that year to the companies incorporated before its beginning.
The report
This item is based on the report “Property companies and the interest rate turnaround” by HDH Group Research. It contains all figures and tables, the definition of the population and a section on method and limitations: Property companies and the interest rate turnaround, also as PDF.
About HDH Group Research. HDH Group Research examines the structure of German corporations on the basis of its own complete database of more than one million companies. The results may be used freely provided the source is acknowledged.
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