German banks are finally seeing a turnaround in lending activity. The brutal rate hikes back in 2022? They crushed borrowing demand across the board. Now the tide's shifting.

Residential mortgage applications are climbing again. Lower rates are doing their job, sure. But there's more to it—household incomes are rising, giving people actual purchasing power. That combination is reigniting appetite for property financing.

Business lending is picking up too. Companies that sat on the sidelines during the high-rate environment are starting to move again. Credit conditions are loosening, and that's translating into real loan growth.

The data's telling a story: when monetary policy eases and economic fundamentals improve, liquidity flows back into the system. Could be an early signal of broader risk appetite returning to traditional markets.