Apartment and House Prices Surge in Germany

The German real estate market experienced notable price increases in the first quarter of 2025, according to the latest data from the German Real Estate Index (GREIX). This upward trend reflects a shift in market dynamics as buyers adjust to current economic conditions.

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Key Highlights

• Overall Price Increases
  • Compared to the previous quarter (Q4, 2024), apartment prices rose by 1.0%
  • Single-family homes saw a minimal increase of 0.1%
  • Multi-family homes experienced a 1.1% rise

These changes indicate a stabilization in the market following previous downturns.

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• Year-over-Year Growth
  • Compared to the first quarter of 2024, apartment prices increased by 3.2%
  • Single-family homes by 4.7%
  • Multi-family homes by 8.7%

These are the highest year-over-year growth rates since mid-2022

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• Transaction Volume
  • The number of real estate transactions was nearly one-third higher than in the same period last year, suggesting renewed buyer confidence and market activity

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• Major City Trends
  • Compared to the previous quarter (Q4, 2024) Cities like Cologne (+3.4%), Stuttgart (+2.1%), and Berlin (+1.7%) reported significant price increases, reflecting higher demand and price stability in large cities.
  • Düsseldorf saw a 1.3% increase, Frankfurt a 0.7% increase, and Leipzig recorded a 0.6% rise.
  • No transaction data for Hamburg and Munich for Q1 2025 is available at this time

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Recovery Strongest in Major Cities

Compared to their lowest levels, the recovery in major cities is the most pronounced. In Leipzig, apartment prices were already about 9% higher in the first quarter of 2025, while in Cologne, prices were up by approximately 8%. This reflects a strong rebound in large urban centers, which generally have more demand and are better positioned for price growth.

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10% Below Peak Prices

Despite the recovery, apartment prices in Germany are still about 10% below their all-time highs. This indicates that while the market is improving, it has not yet reached its previous peak levels.

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‍What does this mean for Buyers and Sellers?

For buyers, the current market offers an opportunity to enter before prices rise further. While the increased property prices may present challenges for some buyers, the ongoing market recovery suggests that now could be a good time to secure a property before further price hikes.

For sellers, the recovery is a positive development, with property values seeing upward trends across major cities. However, it is important to note that the extent of price increases varies by region, and sellers in more competitive markets may benefit the most from the price surge.

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Looking Ahead: Will the Surge Continue?

According to Zdrzalek, real estate market expert at the Kiel Institute for the World Economy (Kiel Institute), the future pace of price increases will depend on economic conditions and monetary policy decisions. Key factors like interest rates, inflation, and broader economic conditions will influence the recovery.