Residential real estate prices appear to be on the rise again in Germany.
A recent evaluation by the Pfandbrief Banks found that from April to June, the prices of apartments and houses rose by 1.1 percent compared to the previous quarter.
"The recovery phase on the real estate market continues," VDP Managing Director Jens Tolckmitt told the German Press Agency. He added that prices have risen for the fifth quarter in a row.
Market experts suggest that recent back-to-back increases in property prices in Germany signal an end to a downturn that began in late 2022.
Where are prices increasing the most?
Among Germany's seven most populous cities, prices rose fastest quarter-on-quarter in Düsseldorf (2 percent), followed by Frankfurt am Main (1.7 percent).
The weakest development was in Stuttgart, where apartments and houses rose in price by 0.8 percent.
In the first quarter of 2025, i.e. from January to March this year, residential real estate prices had risen by 1.4 percent compared to the previous quarter, according to the Federal Statistical Office (Destatis).
The figures from the statistical office and the VDP were similar. Destatis data for the second quarter is not yet available.
Another report by Merkur.de - based on data collected by Value AG, which includes prices on real estate platforms like Immoscout24, unpacks the rise in prices for new builds specifically.
In the second quarter of this year, prices for new-build apartments rose in about 75 percent of all German cities and districts compared to the previous year - in some regions prices rose by more than 30 percent.
The price hike is particularly sharp around the Munich area. The Bavarian capital and the surrounding district lead the ranking of the most expensive new-build apartments. Six neighbouring regions – including Starnberg, Garmisch-Partenkirchen, Miesbach, Dachau, Fürstenfeldbruck and Ebersberg – are among the ten most expensive places to live in Germany.
Outside Bavaria, cities such as Hamburg, Frankfurt, Freiburg, Stuttgart and Düsseldorf continue to be among the most expensive markets for new-build apartments.
The largest price jump in new builds specifically was recorded in Potsdam, where prices rose by 11.7 percent since last year.
North Frisia saw the most severe decline in new build prices with a drop of 9.5 percent. In 2024, the district, which also includes the island of Sylt, was one of the four most expensive regions in Germany.
More sales, less new builds
Another sign that the real estate market is gaining ground is that the number of properties sold rose significantly in Berlin last year.
Tagesspiegel reported that 20,789 units were sold in the German capital last year, an increase of 18 percent compared to the year before. In terms of value, those sales amounted to a total value of €14.9 billion, an increase of 20 percent.
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Construction of new properties has slowed in recent years. This combined with a renewed increase in investor interest could be expected to encourage speculation.
This is good news for homeowners looking to sell, as it suggests that you can get a bit more money for your property than you could have one year ago. The news is not ideal for anyone looking to buy a home in Germany right now, as it means this means that prices have risen and are generally expected to continue rising in the near term.
A report by an appraisal committee for property values, cited by Tagesspiegel, found that the prices of single-family homes and condominiums in new buildings have risen significantly - up 12 and ten percent respectively.
Meanwhile, there are plenty of super-expensive properties to be found in Berlin. In Spandau, a villa changed hands for €17.2 million last year, and the most expensive apartment that sold went for €8.3 million in Charlottenburg.
What are 'Pfandbrief banks'?
Pfandbriefe are a special type of bond - backed by long-term assets like mortgages - that have existed in Germany for hundreds of years.
Pfandbrief banks issue these Pfandbriefe bonds, effectively collecting from investors to finance loans and transferring collateral to the investors.
The Association of Pfandbrief Banks (VDP) has more than 50 members who pursue the Pfandbrief business including, for example, DZ HYP from Hamburg and Münster.
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