The German residential property market has confirmed a significant rebound in the second quarter of 2025, with the national House Price Index rising for the third consecutive quarter year-over-year. Preliminary data from Wiesbaden indicates that residential property prices increased by an average of 3.2% compared to the second quarter of 2024.
This latest growth follows a period of sustained decline that began in the fourth quarter of 2022, marking a definitive shift in market dynamics. The previous quarter (Q1 2025) had seen a year-over-year increase of 3.5%, while the final quarter of 2024 recorded a 1.9% rise, confirming the established momentum of the recovery. On a quarter-over-quarter basis, prices across all residential properties experienced an increase of 1.1% compared to the first quarter of 2025.
The return to price growth was observed across almost the entire country, confirming a broad-based market recovery. Apartments, in particular, saw price increases in nearly all German regions compared to the same quarter the previous year. This generalized uplift highlights improved market confidence and demand following the period of adjustment.
The strongest upward movement in apartment prices was seen in large cities situated outside the seven major metropolitan hubs (Berlin, Hamburg, Munich, Cologne, Frankfurt am Main, Stuttgart, and Düsseldorf). In these cities, apartment prices appreciated by a substantial 5.0% year-over-year, alongside a quarter-over-quarter rise of 1.3%. This suggests that buyers are increasingly looking beyond the largest, historically most expensive centers.
The seven largest cities, while experiencing moderate growth, still contributed to the national rise, recording a 2.4% increase in apartment prices compared to the previous year, with a minor 0.3% increase compared to the previous quarter. Furthermore, thinly populated rural areas also demonstrated notable resilience in the apartment segment, where buyers paid 3.6% more for apartments compared to the second quarter of 2024. Significantly, the quarter-over-quarter growth in these rural areas also matched the year-over-year figure at 3.6%, demonstrating strong recent price momentum.
The market for Single and two-family homes followed a similar trajectory, with prices rising in the majority of German regions. The most significant price hikes for these property types were also registered in the large cities outside the top seven, where prices rose by 3.9% year-over-year and 1.6% quarter-over-quarter. Rural areas also experienced solid price increases, with detached and semi-detached homes becoming 2.8% more expensive than in the second quarter of 2024.
Interestingly, the seven largest metropolitan areas were the single exception to the national trend in the house market. While house prices slightly increased by 0.2% compared to the first quarter of 2025, they registered a marginal year-over-year decline of 0.2% compared to the second quarter of 2024. This suggests that while apartment demand remains robust in the top cities, high prices for larger standalone homes may still face some buyer resistance in Germany’s most prominent urban centers.
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