Housing Market Overview H1 2025

Developments on the Demand and Supply Side

Berlin's housing market is experiencing significant demographic and construction-related changes that require careful analysis. As of December 31, 2024, Berlin's population reached 3,897,145 inhabitants, representing moderate growth of +0.5 percent (+19,045 people) compared to the previous year. International immigration is the primary driver of population growth, highlighting the continued importance of immigration for the city's demographic development. The positive balance of migration effectively offsets the natural population decline, as more people continue to die than are born in Berlin. This is evident from the reduction in the number of children under six years old from 215,179 in 2023 to 208,938 in 2024.

Regarding housing supply, Berlin building authorities reported 15,362 completed housing units in 2024, representing a decline of 3.8 percent compared to the previous year. These completions resulted from 2,533 construction projects (+5.0 percent). The number of housing units created through new construction remained stable at 14,632 units. The decline in building permits shows a particularly clear trend, which is relevant for future housing supply. In 2024, Berlin authorities granted permits for 9,772 housing units. This is a reduction of -38.5percent compared to 2023 and continues an eight-year continuous decline in permit issuance. Of these, 8,558 units are planned for new residential and non-residential buildings, representing a decrease of 40.6percent compared to the previous year. Compared to the other Big-8 cities, Berlin demonstrates above-average construction activity with 40 completions per 10,000 inhabitants. However, JLL's needs analysis in the medium scenario shows an undersupply of about 20 housing units. Given Berlin's market size and dynamics, this represents a significant challenge. The considerable discrepancy between current building permit numbers (25 per 10,000 inhabitants) and completion rates indicates a potential future decline in construction activity.

Rent and Purchase Price Development

Berlin's real estate market shows a balanced picture of moderate growth and solid fundamentals. Quality-adjusted data on new rental contracts show that Berlin experienced moderate growth in the first half of 2025. The overall stock increased by 1.0 percent year-on-year, with existing properties rising by around 1.5 percent and the new construction segment experiencing a slight increase of 0.1 percent. In a 5-year comparison, Berlin remains at the top among the Big-8 cities, which suggests a pause after years of strong dynamics.

In the condominium market, Berlin shows a slightly improved situation, with median prices offered at €5,642/sqm for the overall stock. This is supported by a medium five-year growth of 4.9 percent, despite an annual increase of just 0.1 percent. The existing segment achieved €5,434/sqm, with medium 5-year growth of 6.2 percent and development from the previous year's value of 0.3 percent. Prices for new constructions decreased slightly by 2.6 percent in the first half of the year, reaching €7,721/sqm.

Berlin represents a market for investors seeking sustainable returns with proven long-term appreciation potential. It has successfully navigated the transition from rapid growth to value preservation, maintaining its position as one of Germany's leading real estate destinations.

Developments on the Demand and Supply Side

At the end of 2024, Hamburg's population reached 1,862,565 inhabitants, representing an increase of +10,969 people or +0.6 percent compared to the previous year. This demographic growth is primarily due to significant migration movements: Hamburg had a positive migration balance of 12,465 people, while a natural population decline of 1,038 people was recorded.

Regarding housing construction activity, Hamburg showed remarkable building activity in 2024 with 8,319 newly completed housing units. This represents a significant increase of +39 percent (2,320 units) compared to 2023. Within the newly constructed buildings, multi-story residential structures (buildings with three or more housing units) made up the predominant share of new housing with 6,334 units or 78.5 percent. Single and two-family houses contributed 704 units (8. 7percent), residential facilities added 862 units (10.7 percent), and non-residential buildings (e.g., office and commercial properties) provided 165 units (2.0 percent). Building permit activity in 2024 showed a contrary trend: permits were issued for 4,617 housing units, representing a decrease of 12.2 percent compared to the previous year. Compared to the other German Big-8 cities, Hamburg demonstrates above-average construction activity with 42 completions per 10,000 inhabitants. The demand-supply gap in the JLL analysis indicates a moderate undersupply of about four housing units per 10,000 inhabitants. This represents a comparatively favourable position compared to other metropolitan regions. However, the discrepancy between high completion rates and low building permit numbers (24 per 10,000 inhabitants) is noteworthy. This could indicate a future decline in construction activity. Compared to the other Big-8 cities, Hamburg's housing market appears relatively balanced.

Rent and Purchase Price Development

Hamburg is one of Germany's top property markets, with robust growth in both the rental and condominium sectors.

In the first half of 2025, the median rent for the overall rental market was €17.79/sqm. This corresponds to a five-year growth rate of 4.3 percent and an impressive annual growth rate of 13.7 percent. At €28.80/sqm, prime rents (90th percentile) have increased by 15 percent year-on-year, exceeding those of all other Big-8 cities. Rental properties in existing buildings achieved an average of €16.74/sqm, while those in new buildings reached a premium of €23.01/sqm.

In the condominium market, prices for existing properties in Hamburg reached €5,521/sqm in the first half of 2025. This corresponds to a median five-year growth rate of 6.1 percent, although there has been an annual decrease of 1.2 percent. The new construction segment performs better, achieving an average of €7,966/sqm and a medium five-year growth rate of 8.2 percent.

Compared to other major German cities, the Hamburg market shows more balanced and sustainable growth. It exceeds cities such as Frankfurt and Stuttgart in terms of purchase price development, while maintaining higher rental yields.

Developments on the Demand and Supply Side

At the end of 2024, Munich had 1,603,776 residents with primary residence. This represents a significant increase of +14,750 people compared to the end of 2023 (1,589,026). This corresponds to a population growth rate of nearly one percent (+0.93 percent) year-on-year. In 2024, Munich exceeded the 1.6 million thresholds for the first time. Migration patterns play a crucial role in Munich's population development. During 2024, a positive migration balance of +11,412 people was registered. Regarding housing supply, Munich recorded a significant decline in housing completions in 2024. In the Bavarian state capital, 6,503 new housing units were completed in residential and non-residential buildings. This represents a decrease of about 34percent compared to 2023, when 9,857 new units were created. Building permit activity showed a similar downward trend. In 2024, authorities approved 8,329 new housing units, representing a decrease of 8.4percent compared to the previous year. This continues the declining trend in permit issuance observed since 2017, when about 13,500 new units were approved. In the comparative analysis of the eight largest cities in Germany, Munich shows above-average construction activity with 41 completions per 10,000 inhabitants. The JLL needs analysis indicates a supply deficit of 20 housing units per 10,000 inhabitants. Given the traditionally tight housing market conditions in Munich, this represents a significant challenge. A positive indicator is the high building permit rate of 52 per 10,000 inhabitants – the highest among the eight largest cities – which suggests a potential intensification of future construction activity. The interplay between continued population growth and fluctuating construction production will likely remain a defining feature of Munich's housing market dynamics soon.

Rent and Purchase Price Development

At €24.11/sqm for the overall stock in the first half of 2025, Munich recorded the highest median rent for new contracts among the eight largest cities in Germany, which is an impressive 38 percent above the Big-8 average of €17.46/sqm. The prime rent segment is particularly dynamic, reaching €36.10/sqm with annual growth of 10.6 percent. For rental apartments in existing buildings, Munich achieves €23.86/sqm, corresponding to a medium five-year compound annual growth rate (CAGR) of 3.9 percent and annual growth of 6.4 percent. Offered new construction rents are at €25.62/sqm, with a similar five-year CAGR of +3.3%.

The Munich condominium market shows remarkable stability, with median prices for the overall stock offered at €8,611/sqm in the first half of 2025. Growth amounted to 2.3 percent over five years (CAGR) and around 0.6 percent year-on-year. After a slight decline in the previous six months, the market is showing signs of recovery in the first half of 2025. Prices for existing apartments also demonstrate resilience, standing at €8,219/sqm with a 5-year CAGR of +2.7%. Year-on-year, there has been a notable increase of 2.6 percent. Newly constructed condominiums achieve the highest prices in Germany, averaging around €11,000/sqm, and maintain stable values despite market fluctuations, with a five-year CAGR of +4.9%.

The combination of high rents, stable purchase prices and continuous growth in most segments confirms Munich's status as the most expensive and mature housing market in Germany. Compared to more volatile emerging markets, it offers investors lower but safer returns.

Developments on the Demand and Supply Side

Cologne's population reached 1,090,473 inhabitants at the end of 2024, representing moderate growth of +1,509 people (+0.1percent) compared to the previous year. Net migration is a decisive factor for population development in Cologne. In 2024, the city recorded 59,244 arrivals compared to 56,426 departures, resulting in a positive migration balance of 2,818 people. This immigration compensated for the natural population decline of 1,340 people. Regarding housing supply, Cologne experienced a significant reduction in housing construction activity in 2024 with only 1,819 completed housing units. This is the lowest number since 1990 and almost 50percent below the level of 2023 (3,533 units). Of these completions, about 64 percent of the completed units had received their building permits more than two years before completion, while only 3.3 percent were completed within one year of permit issuance and about 33percent within one to two years. Similar trends are evident in building permit activity: In 2024, 2,931 permits were issued, representing a decline of 8.7 percent compared to 2023. In the comparative analysis of the eight largest cities in Germany, Cologne has the lowest construction activity with only 16 completions per 10,000 inhabitants. This below-average construction activity manifests itself in a substantial supply gap of 29 units per 10,000 inhabitants in the JLL needs analysis. Although building permits with 24 units per 10,000 inhabitants exceed current completion rates, they remain insufficient to meet the additional housing needs in the cathedral city. The considerable discrepancy between housing demand and completions in the forecast underscores the urgency of enhanced housing policy measures.

Rent and Purchase Price Development

In the first half of 2025, the Cologne residential real estate market showed steady growth in both the rental and purchase segments. Rents for the overall property stock averaged €16.27/sqm in the first half of 2025, corresponding to a five-year average growth rate of 4.7 percent. Rents for existing properties are €16.00/sqm, whereas rents for new buildings are €21.02/sqm. The rental market recorded constant annual growth of 8.5 percent for the overall stock, with new rental properties showing particularly high growth of 17.6 percent.

In the purchase segment, prices for the overall condominium stock in Cologne increased slightly by 2.5 percent compared to the previous year, reaching a median of €4,936/sqm in the first half of 2025. The market shows a medium five-year CAGR of 4.5 percent. Existing units are offered at €4,719/sqm, while new buildings achieve a significant premium of 46 percent at €6,871/sqm. The condominium market in new constructions in Cologne has developed dynamically in recent years, with a five-year CAGR of 6.7 percent. However, the most recent development, with annual growth of -0.3 percent, indicates a continuing sideways movement of the market.

The city successfully balances affordability with steady value appreciation, establishing itself as a compelling alternative to higher-priced German markets.

Developments on the Demand and Supply Side

The city of Frankfurt recorded 776,843 inhabitants at the end of 2024, representing an increase of about 6,700 people and a population growth rate of +0.9 percent compared to the previous year. Regarding housing construction activity, Frankfurt is an exception to regional and national construction trends. Despite challenging market conditions, the city reported the completion of 4,203 housing units in 2024. This represents the third-highest annual completion number of the past decade. A significant contribution to housing supply was once again the conversion of commercial properties into residential space: 630 housing units were created through conversion in 2024, representing an increase of 37 percent compared to the previous year and highlighting the importance of conversion projects for the city of Frankfurt. In the area of permits, however, a contrary trend was evident in 2024. In 2024, the municipal building authorities issued permits for 2,266 housing units, representing a decrease of 30 percent.

From a comparative perspective among the eight largest cities in Germany, Frankfurt demonstrates the highest construction activity in 2024 with 55 completed units per 10,000 inhabitants. Nevertheless, the JLL needs analysis reveals a substantial supply gap of 27 units per 10,000 inhabitants. This is due to an extraordinarily high additional demand of around 82 units per 10,000 inhabitants – the second highest among the analysed cities, only exceeded by Leipzig. Particularly significant is the discrepancy between the high completion rates and the substantially lower building permit numbers (29 per 10,000 inhabitants). This indicates a potential future decline in construction activity. This pattern distinguishes Frankfurt from cities like Munich or Düsseldorf, which have higher permit rates than completion rates. Consequently, despite the recent high construction activity, Frankfurt faces the challenge of further intensifying housing development to close the projected supply gap in an optimistic scenario.

Rent and Purchase Price Development

The residential real estate market in Frankfurt continues to experience dynamic growth in both the rental and purchase sectors. Looking ahead to the first half of 2025, the city is set to maintain its position as one of Germany's most dynamic real estate markets.

In the rental market, median rental prices reach €16.8/sqm for the overall stock, while prime rent (90th percentile) stands at €18.33/sqm. The annual growth of +7.2 percent for the overall stock is particularly noteworthy, positioning Frankfurt among the leading Big-8 German cities. However, over the past five years, rents have increased by a lesser amount, with a 5-year CAGR of +2.8 percent. New contract rents for existing properties average €15.87/sqm, whereas newly constructed units have a significantly higher average value of €22.29/sqm.

The market for residential condominiums in Frankfurt shows offer prices of €6,391/sqm for the overall stock in the first half of 2025. New construction prices are significantly higher at €7,997/sqm. Overall prices have increased by around 2.3 percent compared to the same period last year, showing positive development again after recent years of price corrections. The purchase market in Frankfurt has demonstrated steady growth, with a five-year CAGR of 2.1 percent.

Developments on the Demand and Supply Side

At the end of 2024, Dusseldorf recorded 658,245 residents with primary residence, representing an increase of 2,528 people compared to the previous year. This demographic growth is mainly due to migration. In 2024, Dusseldorf had a positive migration balance of 3,663 people. Although the number of people moving to Dusseldorf decreased by 1,049 cases compared to 2023, the total immigration of 42,677 people still significantly exceeded the number of registered departures (39,014).

Regarding housing supply, Dusseldorf recorded a moderate decline in housing completions in 2024 with 1,990 new housing units in residential and non-residential buildings, representing a decrease of about 3.5 percent compared to 2023. In contrast, building permit activity showed significant growth. In 2024, authorities approved 2,737 new housing units, representing an increase of 21.6 percent compared to the previous year. This expansion of permit activity is a positive indicator for future housing supply in Dusseldorf.

With 30 completions per 10,000 inhabitants, Dusseldorf demonstrates moderate construction activity, positioning itself in the middle range compared to the German Big-8 cities. Particularly noteworthy is the positive difference between completions and building permits (42 per 10,000 inhabitants) – the highest among the compared cities – which could indicate a potential expansion of construction activity in the near future. JLL's needs analysis reveals a supply deficit of 10 units per 10,000 inhabitants regarding additional demand. This could potentially be reduced in the medium term given the increased permit numbers. However, the successful implementation of approved projects will be crucial for reducing the projected supply-demand difference.

Rent and Purchase Price Development

With an increase of 8.3 percent on last year's figures, the Dusseldorf rental housing market has shown considerable growth in the first half of 2025. The median new contract rent is now €15.07/sqm. Prime rental values (90th percentile) have risen to €24.20/sqm, representing a significant annual increase of 10.4 percent. Notably, the new construction segment recorded exceptional median growth of 17.2 percent, with rental prices reaching €20.48/sqm. This can be attributed not only to market trends, but also to the quality of the new-build apartments on offer.

Following a slight decline in the second half of 2024, the condominium market has recovered, growing by 1 percent compared to the previous six months. Prime purchase prices (90th percentile) have stabilised at €7,924/sqm, with a moderate five-year growth rate of 4.4 percent. Quality-adjusted, the purchase prices for new constructions have shown particularly impressive growth of 11.9 percent compared to the previous six months.

The city maintains a strategic position among the Big 8 cities, offering a balanced profile of stability and value appreciation that appeals to investors and consumers alike.

Developments on the Demand and Supply Side

The demographic statistics for 2024 reveal a slight negative population development for Stuttgart: The state capitol records a total decline of 735 inhabitants. This decline results from two factors: negative natural population development with a deficit of 276 people and a net migration deficit of 459 people. This development, however, reflects Stuttgart’s declining attractiveness and more the consequences of an unsuccessful expansion of the housing supply.

The construction activity data for Stuttgart in 2024 shows a significant decline across almost all areas. With only 559 total construction projects, the year 2024 is substantially below the level of previous years. The number of completed housing units decreased to 1,321, which is 30 percent below the previous year's value (1,891 units in 2023). In historical context, construction activity in 2024 falls far below the peak of the early 1990s, when in 1993 alone 3,586 housing units were completed.

Consequently, construction activity in Stuttgart is below average compared to the other eight largest German cities: Only 22 apartments per 10,000 inhabitants are completed. This remains significantly behind demand. JLL's needs analysis reveals a supply deficit of 40 units per 10,000 inhabitants regarding future additional demand. Particularly striking is the low building permit rate of 12 per 10,000 inhabitants, the lowest among the cities compared. This indicates a potential further deterioration of housing market conditions. Unlike in Munich or Düsseldorf, where the number of building permits exceeds completions, Stuttgart lacks the prerequisites for short-term relief of the housing market. Despite the slight population decline, this further exacerbates the existing housing shortage.

Rent and Purchase Price Development

In the first half of 2025, Stuttgart experienced moderate rent growth, with median rents for both existing and newly constructed properties increasing by 4.8 percent to €12.25 per square metre compared to the previous year. This puts Stuttgart at the lower end of the range for new rental contracts compared to the other eight largest German cities. The rental market shows clear differentiation between segments, with rents for new constructions exhibiting greater dynamism. Rental offers for new-build properties, currently averaging €19.57/sqm, recorded significant year-on-year growth of +7.1 percent, while existing apartments showed a more moderate increase of +4.2 percent. The latter averaged €16.67/sqm in the first half of the year. This development reflects the very weak supply in Stuttgart.

After a period of slight decline, prices for condominiums have now stabilised in the first half of 2025. The overall average price is €4,676/sqm, representing a minimal 0.2 percent increase when considering the quality differences within the analysed data. The existing apartment segment shows a slightly higher increase of 0.4 percent compared to last year's value, with prices at €4,571/sqm. Offer prices in the new construction segment are significantly higher, averaging €8,376/sqm.

Developments on the Demand and Supply Side

At the end of 2024, Leipzig recorded 632,562 inhabitants with primary residence, representing an increase of +0.6percent (3,844 people) compared to 2023. This development continues a sustainable growth trend, with Leipzig experiencing remarkable population growth of 21 percent since 2011 – the strongest demographic growth among German large cities with more than 500,000 inhabitants. Migration remains the predominant factor influencing Leipzig's population dynamics. In 2024, the city's growth was mainly driven by international immigration (+8,401 people). Additionally, Leipzig recorded moderate migration gains from both eastern and western German federal states. At the same time, the trend toward suburbanization continued, with Leipzig losing 2,557 inhabitants to its immediate surroundings (Leipzig and North Saxony districts), although this outmigration was less pronounced than in previous years (3,899 in 2023).

In the comparative analysis among the eight largest German cities, Leipzig shows above-average construction activity with 41 completions per 10,000 inhabitants. However, this construction activity is not sufficient to cover the exceptionally high demand. JLL's needs analysis shows a supply deficit of 53 units per 10,000 inhabitants – the largest absolute supply gap among all cities analysed. Building permit activity (37 permits per 10,000 inhabitants) is below the current completion level, indicating a potential future deterioration of housing supply.

Unlike cities such as Munich or Düsseldorf, which show signs of potential expansion of construction activity, the discrepancy between the number of permits and completions in Leipzig remains high. This indicates only a slight supply expansion in the medium term.

Rent and Purchase Price Development

Although Leipzig has experienced remarkable growth, it remains the most affordable of the eight largest cities in Germany. This development is an expression of an ongoing convergence process. With average total rental prices of €11.00/sqm in the first half of 2025, new contract rents have increased by an impressive 11.4 percent year on year. Rents for new contracts on existing properties have risen by 10.2 percent to €10.49 per square metre, while new construction rental offers are at €14.21 per square metre, representing robust annual growth of 9.7 percent.

The Leipzig condominium market, with an average offer price of €3,054/sqm for existing and new construction apartments (an increase of 1.7 percent year-on-year), continues to offer an attractive entry point substantially below that of other German Big-8 cities. The existing segment recorded significant growth of 3.4 percent in the first half of the year, reaching an average price of €2,994 per square metre. Meanwhile, the new construction segment experienced a substantial correction of 13.9 percent, reaching an average price of around €5,000 per square metre — the largest decline among the Big-8 cities. This is partly due to changes in the quality of offers considered. Despite the recent adjustment to new construction prices, the entire condominium market in Leipzig shows solid overall value appreciation of 31.4 percent over five years, demonstrating strong dynamics.

With attractive rental yields compared to other major markets, Leipzig continues to offer compelling opportunities for tenants and real estate investors alike.

Following significant declines in building permits in 2023 (-30 percent) and 2024 (-17 percent), a moderate trend has emerged in the first quarter of 2025, with a slight increase of 3.4 percent compared to the same period last year. This positive development correlates with an improved mood in the housing construction sector.

Despite these initial signs of recovery, the housing construction sector remains in a critical phase. The order situation remains tense, and although the cancellation rate has declined slightly, both indicators remain at historically high levels. Completion figures for 2024 confirm the negative trend, with only 251,900 new apartments completed. This represents a 14.4 percent decrease compared to the previous year.

In response to this situation, the new federal government initiated the 'Building Turbo' initiative, which was passed by the Bundestag on 18 June 2025. The centrepiece of this initiative is the amendment to the Building Code in the form of the newly introduced § 246e. This will enable simplified planning procedures for housing construction projects until 2030. Record investments of around 110 billion euros are planned for 2025 to stimulate housing construction.

However, due to the multi-year realisation periods in housing construction, these political measures will only be reflected in completion statistics with a considerable time delay. Despite these measures, JLL therefore forecasts a further decline in completion figures for 2025.

Declining Building Permit Numbers Indicate a Worsening of the Tense Situation in the Housing Market

Significant differences in completion and approval figures were recorded in the eight largest German cities in 2024. While Frankfurt recorded a 15 percent increase in completions (55 units per 10,000 inhabitants), Hamburg saw a 39 percent increase (42 units). Munich, Cologne and Stuttgart, on the other hand, experienced significant declines: Munich (-34 percent), Cologne (-50percent), and Stuttgart (-30 percent).

Building permits also show a predominantly negative trend: Berlin (-38.5 percent), Hamburg (-12.2 percent), Munich (-8.4 percent), Cologne (-8.7 percent), and Frankfurt (-30 percent) recorded drastic declines. Düsseldorf was the only city to stand out positively, with an increase in permits of 21.6 percent.

The supply gap between housing needs and supply varies considerably: While Hamburg is doing comparatively well with just four units missing per 10,000 inhabitants, Stuttgart (40 units), Cologne (29 units), Frankfurt (27 units) and Berlin/Munich (20 units each) show significant deficits. The situation is particularly problematic in Stuttgart and Cologne, where low approval numbers coincide with significant supply deficits.

These divergent developments suggest that housing market tension could worsen in several cities in the coming years, particularly where the number of approved apartments is significantly below current completion rates.

Overall Market Development

Analysis of rental price trends in Germany's eight largest cities indicates a slowdown in growth. On average, total rents increased by 4.9 percent (compared to 8.1 percent the previous year). There are significant regional differences: The strongest increases were recorded in Hamburg (+13.7percent), Leipzig (+11.4percent) and Düsseldorf (+8.3percent), while Berlin showed sideways movement at +1.0percent. Over a five-year period, Berlin leads with an increase of 49.9 percent, followed by Leipzig with 46.8 percent and Hamburg with 36.8 percent. Munich has the highest absolute rent level at 23.33 Euros per square metre, while Leipzig has less than half this value at 10.45 euros per square metre.

Prime Segment

The average increase in premium rents was 4.7 percent, with significant regional variations. The strongest increases were recorded in Leipzig (32.0 percent) and Hamburg (15.0 percent). Munich remains the most expensive city, with average rents of €36.05 per square metre, more than twice the price of Leipzig, where average rents are €15.93 per square metre. The five-year review reveals a process of convergence, which is particularly evident in Leipzig (+56.9 percent) and Berlin (+40.2 percent).

Existing Apartment Rents

Year-on-year, existing apartment rents increased by 6.8 percent, which is stronger than the overall market but weaker than last year's figure of +8.2 percent. The highest dynamics were seen in Hamburg (+10.6 percent) and Leipzig (+10.2 percent), while Berlin, despite an overall development of +56.1 percent over the last five years, currently records only a +1.5 percent increase. Munich leads with €23.86/sqm and a year-on-year increase of 6.4 percent.

New Construction Rents

Rents for new constructions increased by 3.3 percent, which represents a significant slowdown compared to the previous year (10.3 percent). The strongest increases were seen in Hamburg (+18.1 percent), Cologne (+17.6 percent) and Düsseldorf (+17.2 percent), while Berlin (+0.1 percent) stagnated. In some cases, the quality-adjusted values are significantly below the median, indicating structural changes in the supply mix. The five-year increase in new construction rents (+32.3 percent) exceeds that in existing apartment rents (+26.7 percent), suggesting mounting affordability issues. Persistent demand pressure is primarily manifested in the existing apartment segment.

Overall Market Development

Purchase prices for condominiums in Germany's eight largest cities have increased by 0.4 percent (1.1 percent quality-adjusted) year-on-year. Following the negative trend of the previous year (-3.6percent), this suggests accelerated price growth. The strongest positive developments were observed in Frankfurt (up 2.3percent), Cologne (up 2.5percent) and Leipzig (up 1.7percent), while Hamburg (-1.8percent) and Düsseldorf (-2.1percent) continue to record slight price declines in the median analysis. The quality-adjusted analysis reveals significant discrepancies, particularly in Hamburg (+2.0percent quality-adjusted vs. -1.8percent median). Munich has the highest price level at €8,610/sqm, followed by Frankfurt at €6,390/sqm and Hamburg at €5,990/sqm. The average increase over the last five years is 11.4percent, with Leipzig (28.9percent) and Berlin (16.6percent) showing the strongest growth.

Existing Property Segment

In the existing property segment, prices are rising by an average of 1.6percent, which is stronger than the overall market (+0.4percent). Munich is leading the way with an average price of 8,220 EUR/sqm, followed by Frankfurt (5,960 EUR/sqm) and Hamburg (5,520 EUR/sqm). Regionally, a heterogeneous picture emerges, with Frankfurt (+4.9percent) and Cologne (+4.3percent) leading the way. In some cases, the quality-adjusted values deviate significantly from median developments, particularly in Hamburg (+2.0 percent vs. -1.2 percent). The average 5-year development is +17.0 percent, with Leipzig leading the way at +44.2 percent.

New Construction Segment

On average, new construction prices are stagnating across the eight largest cities (quality-adjusted -0.4percent), representing a stabilisation following last year's decline (-0.7percent). In contrast to the existing property segment, which has recorded stronger price declines in recent years (-10.7 percent between the peak and trough of the cycle compared to -5.5 percent in new construction), the recovery phase that has now begun shows more dynamic development. Of the eight largest cities, only Hamburg recorded a significant positive increase (+2.6percent). Munich leads the way with prices of 11,250 EUR/sqm, followed by Stuttgart (8,530 EUR/sqm) and Frankfurt (8,090 EUR/sqm).

A progressive revival of the residential property market is forecast for the remainder of 2025, which could give additional momentum to the price increases already observed.

Authors
Dr. Soren Grobel, Director of Living Research, Germany
Alwina Fatima, Senior Research Analyst

Contact:
Our Residential Market contacts:

Residential:
Michael Bender, Head of Residential Germany

Valuation:
Roman Heidrich, Lead Director Value and Risk Advisory, Berlin
Sebastian Grimm, EMEA Head of Multifamily Valuation, Frankfurt

Research:
Helge Scheunemann, Head of Research Germany
Dr. Soren Grobel, Director of Living Research, Germany