In 2025, the real estate markets in eastern Germany will be largely robust, having largely overcome the consequences of economic transformation and migration. This is the conclusion reached by the study “Real Estate Market in Eastern Germany 2025/2026” published by DZ Hyp AG on December 3, 2025. It analyzes the development of the commercial real estate markets in Berlin, Chemnitz, Dresden, Erfurt, Halle, Leipzig, Magdeburg, Potsdam, Rostock, and Schwerin in the retail, office, and residential segments.
Compared to the old federal states, the study finds that rent and vacancy trends in the eastern German locations examined are now within a similar range to those in the other federal states. This applies both to tight housing markets and to subdued demand in the office and retail segments. Demographic change, on the other hand, remains more visible; the advanced aging of society is likely to lead to declining population figures in many rural states in the future. Nevertheless, demand in the residential real estate market remains high in dynamically growing cities, while smaller locations have mostly seen stable sideways development.
With regard to the residential real estate segment, the study concludes that the East German housing market has low rent levels compared to the rest of Germany. In addition, higher vacancy rates can be observed in structurally weaker regions such as Chemnitz, Halle, and Schwerin, whereas high-growth cities such as Berlin, Leipzig, and Dresden are characterized by sustained high demand. Overall, the average initial rent in the regional centers analyzed was €12.60 per square meter per month in 2024, which is below the national average of around €14 per square meter per month. In Berlin, however, the figure was higher than the average for the top locations at €19.70 per square meter per month. In view of a cross-location shortage of new construction activity, rising initial rents are to be expected for the coming year, with DZ Hyp assuming increases in the range of three to four percent.
“The trends and developments described in the study correspond with our perception from discussions with various market participants,” says Jacopo Mingazzini, CEO of The Grounds. “Dynamically growing cities in eastern Germany have long established themselves as attractive target markets for private investors and owner-occupiers, but also for institutional investors with an interest in residential real estate.”
