German banks should prepare for a surge in insolvencies as the coronavirus crisis pushes weaker companies over the edge and puts a question mark on the country’s property boom, the Bundesbank said on Tuesday. With part of a government moratorium on insolvencies now expired, the German central bank said corporate insolvencies could rise by more than 35% by March to more than 6,000 per quarter, a level not seen since 2013. “The severe economic downturn gives rise to fears that the number of corporate insolvencies will rise significantly in the coming quarters,” the Bundesbank said in its annual financial stability report, with the rise expected to be sharper in manufacturing than in services and construction. The impact on banks could be more contained as the worst hit hospitality industry accounts for just under 2% of German banks’ domestic loan books, compared to 23% for real estate and construction. The coronavirus pandemic could still spell trouble for Germany’s property markets after they have boomed for years. “An increase in unemployment and the number of household insolvencies could result in rising defaults on housing loans, while a rise in corporate insolvencies and a change in demand for office space could have a negative impact on the commercial real estate market,” the Bundesbank said.