The German real estate market is showing the first signs of recovery. Market observers, portals, and institutes are reporting a cautiously positive development. Real estate prices are rising moderately. The market is stable. Sentiment is improving. However, the scope for negotiation is decreasing.
Prices for residential real estate in Germany rose again in the second quarter of 2025, but there were no major jumps. The most significant increases were in prices for single-family homes, while prices for condominiums and multi-family homes rose only slightly and in line with general inflation. Currently, purchase prices are still well below the all-time highs of 2022 almost everywhere, but in Leipzig they are already above them. This is according to the German Real Estate Index (GREIX), a joint project of the expert committees, ECONtribute, and the Kiel Institute for the World Economy.
The current edition of the "Immowelt Preiskompass" for the second quarter of 2025 reports a sustained increase in asking prices for existing residential properties. These rose by 0.8 percent across Germany. In twelve of the 15 largest cities, asking prices for apartments increased – by up to 4.1 percent at the top end. The trend for houses was weaker: they increased in price by up to 2.7 percent in seven of 15 cities. In Germany's largest cities, asking prices for condominiums recorded mostly moderate increases. Existing apartments in Bremen and Dresden saw the most significant price increases. In the high-priced metropolises of Berlin and Munich, on the other hand, price increases were more moderate. In Hamburg and Frankfurt, price momentum even weakened compared to the first quarter.
A major financial services provider reports that there is no sign of galloping real estate prices, even though the upward trend is continuing. However, those interested in real estate are once again showing a "genuine willingness to buy." After evaluating its data, a major real estate portal has concluded that the scope for negotiation is shrinking in seven of the eight major cities. At 10 and 9 percent respectively, the scope for negotiation is currently still greatest in Hamburg and Cologne, while Leipzig has the smallest price discount among the major cities at 3.6 percent.
Photo: © Grabener, Grabener Verlag Kiel, 2025
