Figures
Germany Residential Market Q1 2026
Residential investment market with subdued start to the year
30 April 2026 5 Minute Read
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Residential Investment Market
Investment Volume
Across the top 20 markets, median rents continue to rise, most recently increasing by approximately 4% YoY. Housing costs have also risen significantly in recent years, particularly between 2021 and 2023 due to pandemic effects, inflation, and the war in Ukraine. Recently, however, the operating cost index has shown a dampened dynamic. In Q1 2026, median operating costs nationwide rose to €2.49/sq m/month (top 7: €2.94), corresponding to +3.8% YoY.
Trends
Listing prices for condominiums have largely stabilized in the top 20 markets and are rising again in individual cities. The average of median listing prices stands at approximately €4,200/sq m in Q1 2026, slightly above the prior-year level. The strongest price increases were most recently recorded in Essen, Bonn, and Cologne.
Outlook
Rental growth momentum is expected to continue in 2026, as a noticeable supply expansion is not anticipated before 2027. Tensions in the Middle East are increasing upward pressure on energy- and consumption-related operating costs, while the index shows lower volatility and stabilization phases. Moderate price increases remain probable in the for-sale market.
Housing Supply and Demand
Residential Supply
Momentum in the residential development market remains limited, with structural supply shortages expected to persist over the medium term. Developers continue to face elevated construction costs and restrictive financing conditions. While building permit activity has recently shown a slight uptick, overall volumes remain low. Macroeconomic uncertainties continue to weigh on development activity. At the same time, rental housing supply remains constrained, whereas the availability of owner‑occupied housing has increased in the key markets.
Vacancy Index
Market‑active vacancy remains very low across most German cities and has also attracted increased public attention recently. In metropolitan regions as well as in the southern and western parts of the country, vacancy rates are often below 2%. Higher vacancy levels observed in rural areas of eastern Germany and, in some cases, also in western Germany are predominantly structural in nature.
Outlook
The increase in building permits is expected to continue through to year‑end despite the persistently challenging market environment. This trend is also reflected in residential construction lending, which recently increased by around 2.5% year‑on‑year. However, new rental supply remains limited, while an increasing number of opportunities are emerging in the owner‑occupied housing market.
Rents and Prices for Owner-Occupied Apartments
Rental Market
Across the Top 20 markets, median rents rose by approximately 5%, reaching new highs in many locations. Leipzig recorded rental growth of 7.5%, followed by Düsseldorf at 7.1% and Dresden at 6.9%. The Time‑on‑Market Index for rental listings, which indicates the availability of rental supply, has been declining continuously since mid‑2024 and reached a new low of 91 points.
Condominium Market
Listing prices for condominiums have largely stabilized in the top 20 markets and are rising again in individual cities. The average of median listing prices stands at approximately €4,200/sq m in Q1 2026, slightly above the prior-year level. The strongest price increases were most recently recorded in Essen, Bonn, and Cologne.
Outlook
Rental growth momentum is expected to continue in 2026, as a noticeable supply expansion is not anticipated before 2027. Tensions in the Middle East are increasing upward pressure on energy- and consumption-related operating costs, while the index shows lower volatility and stabilization phases. Moderate price increases remain probable in the for-sale market.
Note: The stated rental and purchase prices are based on apartment listings and do not represent actual existing rents and prices.
Research Kontakte
Jirka Stachen
Senior Director | Head of Research Consulting Continental Europe
Steffen Heinig
Senior Analyst
Business Kontakte
Sandro Höselbarth
Managing Director | Head of Valuation & Advisory Services
Michael Schlatterer
Managing Director | Teamleader | Valuation Advisory Services
