German Residential Property Prices Expected to Rise Through 2026
After a period of notable price declines, experts expect apartment and house prices in Germany to increase in the coming period, with forecasts suggesting the trend may continue into 2026, according to estimates reported by the German News Agency (DPA).
Moderate Price Growth Expected
Michael Voigtländer, a real estate expert at the German Economic Institute (IW), said that residential property prices are likely to keep rising, predicting moderate growth of around 3% to 4%, though at a slower pace than the rapid increases seen in the early 2000s.
Limited Supply Supports the Market
Meanwhile, Michael Neumann, CEO of credit brokerage firm Dr. Klein, stated that the market shows no clear signs of declining demand, noting that new construction remains below required levels, while the supply of existing properties is still limited in high-demand areas.
Neumann added that the average price increase across Germany could reach around 3%, with higher gains possible in major cities, supported by rising rents and increasing wages in several sectors.
Housing Shortage in Urban Areas
Jens Tolckmitt, Managing Director of the Association of German Mortgage Banks, emphasized that the housing shortage is expected to persist for years, particularly in urban centers, where finding affordable housing has become increasingly difficult amid ongoing pressure on the rental market.
Background of the Property Downturn
Germany’s real estate market entered a downturn following its peak in 2022, driven by sharp interest rate hikes and rising construction costs, partly linked to the war in Ukraine. With interest rates now stabilizing, prices have begun to recover in several regions.
No New Property Boom Anticipated
Despite ongoing economic slowdown and job losses in certain sectors, Daniel Ritter, Managing Partner at brokerage firm Von Poll, expects prices to continue rising but at a limited pace, ruling out a new property boom as long as interest rates remain high.
✦ ArchUp Editorial Insight
Germany’s anticipated return to residential price growth situates the market within a Contemporary post-correction housing cycle, shaped less by speculative momentum and more by structural supply constraints and cautious financial conditions. With new construction lagging demand and urban housing shortages persisting, price recovery reflects underlying spatial dynamics within dense metropolitan urban fabric rather than exuberant expansion. However, the forecasted 3–4% growth raises questions of contextual relevance and social balance, as rising values may further strain affordability in cities already under rental pressure. While stabilizing interest rates support functional resilience after the 2022 downturn, elevated construction costs and economic uncertainty limit transformative development. Ultimately, the market’s trajectory suggests an architectural ambition grounded in incremental adjustment, where moderation, scarcity, and long-term housing need—not rapid growth—define Germany’s residential future.
