Not only is the total figure a record, but the second quarter of 2004 saw the biggest ever quarterly increase since records began in 1986. Total lending increased by €8.4 billion ($10.3 billion) in the second quarter compared with €7 billion ($8.5 billion) in the first quarter. But the real total is believed to be more than €192.5 billion ($236 billion) because the Bank does not register all property lending.

"There continues to be less correlation between data on investment activity and lending. While investment acquisitions have dropped by 12.1% in Q2 2004 compared to Q1 2004, bank lending has increased by 9.4% over the same period," says Barry Osilaja, vice president, Senior Debt and Structuring at Jones Lang LaSalle Corporate Finance.

He adds, "This increase of €8.4 billion, the highest quarterly increase since figures began, is most likely as a result of profit taking on the back of refinancing and valuations by investors. We expect a slow down in the lending figures as a result of the tightening in the debt-yield gap following recent increases in swap rates and increased activity by institutional investors."