Both purchase and rental prices for new apartments in Germany rose significantly in the third quarter of 2025. This is revealed in the publication by the research and consulting institute empirica on its empirica real estate price index III/2025. According to this, the asking prices for newly built condominiums in the third quarter were 3.4 percent higher than in the third quarter of 2024; rents rose by 5.0 percent in the same period. Compared to the previous quarter, asking prices rose by 0.7 percent, while rents increased by 1.3 percent. For existing condominiums, the index shows a three percent increase in the third quarter compared to the same quarter of the previous year; rents rose by 4.7 percent.
With regard to price developments, empirica points out that advertised purchase prices have recovered since the interest rate turnaround because a severe shortage coincided with improved affordability, both due to slightly lower interest rates and rising incomes. The fact that prices for new builds are rising more sharply than for existing properties is explained, on the one hand, by the fact that increasing uncertainty is now counteracting the elimination of scarcity. The loss of competitiveness of German companies as a result of tariffs or high energy prices threatened cuts in individual household incomes, for example due to reduced overtime or unemployment. In view of this, prices for new construction rose more sharply because they were secured against downward pressure by rising production costs – or because construction was not taking place in the first place. In addition, the declining depreciation allowance has also had a stabilizing effect on new condominiums since the end of 2023, as it has a price-driving effect, like any subsidy.
In the existing housing stock, price trends depend primarily on the condition of the building and thus on its energy efficiency. The greater the need for renovation, the greater the price reduction. However, due to uncertainty about future regulations and subsidies, there is probably a certain amount of exaggeration here. From a purely economic point of view, the price reduction can hardly be greater than the cost of renovation, according to empirica’s assessment.
“This example shows once again how urgently stable and reliable framework conditions are needed for the real estate markets,” says Jacopo Mingazzini, CEO of The Grounds. “If the targeted emission reductions in existing buildings are to be achieved, investors and owners need clarity about the regulations that must be observed and the funding opportunities available.”
