Real estate market: Home ownership becomes more expensive – prices are increasing again

Home ownership in Germany is becoming increasingly expensive. In the third quarter in a row, the average prices for condominiums as well as for single and two -family houses increased – with a few exceptions nationwide. Affordable living space is particularly scarce in metropolitan areas. It still has to be shown whether the Federal Government’s “Bau Turbo” will relax the situation.

According to preliminary calculations by the Federal Statistical Office, the prices for residential real estate in Germany were an average of 3.2 percent above the level of the same period last year and 1.1 percent higher than in the first quarter of 2025.

After a series of price declines since the fourth quarter of 2022, the market turned in the final quarter 2024: In the period October to December, the prices for residential properties in Germany attracted 1.9 percent, in the first quarter of 2025 it was 3.5 percent compared to the previous year. On average 2024, prices for houses and apartments in this country still gave in by 1.5 percent.

Price increase in almost all regions

According to calculations by the Federal Statistical Office, condominiums cost more than a year earlier in the period April to June of the current year. The prices for single and two-family houses also attracted most regions.

In the seven largest cities – Berlin, Hamburg, Munich, Cologne, Frankfurt/Main, Stuttgart and Düsseldorf – buyers of condominiums had to pay an average of 2.4 percent more than a year earlier and 0.3 percent more than in the first quarter of 2025. One and two -family houses were somewhat cheaper than a year earlier: the prices for such real estate – at a high level – by 0.2 percent.

In cities outside of the top 7 metropolises, apartments increased by an average of 5.0 percent for the previous year’s quartal and 1.3 percent to the previous year. In rural circles, buyers of condominiums had to pay an average of 3.6 percent more than in the previous year’s quarter and in the previous quarter.

With the “Bau-Turbo” against housing shortage

More new apartments are the declared goal of the new federal government. The SPD-led predecessor government had promised 400,000 new apartments in Germany each year, but never achieved this goal.

Last year, 251,900 apartments in Germany had been completed and therefore not as little as since 2015. The incumbent federal government wants to advance the sluggish housing construction with a “construction turbo” via faster permits.

Private and professional builders are causing the rapidly increased construction prices, while the loan rates have leveled off at an increased level.

According to expert estimate, hundreds of thousands of apartments are missing in Germany. The IFO Institute expects only 205,000 apartments to be completed this year.

Upward trend for building permits

The latest figures for building permits give some hope that housing construction will come out of the crisis: In July, the authorities in Germany approved the construction and conversion of 22,100 apartments. According to calculations by the Federal Statistical Office, these were 30 percent more than a year earlier. However, the number of approved apartments had also dropped to the lowest value for a July since 2009.

But the previous annual statistics are also positive: from January to July 2025, the new construction and conversion of 131,800 apartments was approved. That was 6.6 percent or 8,200 apartments more than in the first seven months of the previous year.