The Berlin real estate investment market presents a mixed picture at mid-year. Whilst the investment volume for commercial real estate, according to BNP Paribas, stood at around €633 million in the first half of 2026 – some 52 per cent below the figure for the same period last year – the residential investment market has proved significantly more stable.
The expected upturn in the commercial investment market has so far failed to materialise. Whilst major deals dominated the Berlin market in previous years, market activity in 2026 has so far largely centred on individual sales with an average volume of around €18 million. This is significantly below the average volume of around €45 million over the past five years. The largest transactions were in the retail sector, which accounted for a total of 26 per cent of transaction activity, and the healthcare segment. The office sector, at around 13 per cent at the mid-year point, has so far been significantly under-represented, but BNP Paribas expects a noticeable boost for the rest of the year from Berlin’s currently very dynamic lettings market.
Caution in the commercial real estate market is also evident in other prime locations across Germany, given the market environment that remains characterised by uncertainty. Only the transaction market in Munich managed to exceed the €1 billion threshold in the first half of the year. Berlin, by contrast, remains the frontrunner in terms of the number of deals in a fragmented market.
The picture is different in the residential investment market. According to a nationwide analysis by BNP Paribas Real Estate, residential property continues to benefit from positive long-term fundamentals. In Berlin in particular, sustained high demand for housing, limited supply and low levels of new-build activity are ensuring a stable market environment. Consequently, in the first half of 2026, the capital once again took the top spot among A-class locations with a transaction volume of around 600 million euros.
For the coming months, analysts at BNP Paribas expect a gradual recovery in the Berlin property market. This will depend on a more stable financing environment, a further convergence of buyers’ and sellers’ price expectations, and a sufficient supply of suitable properties. Whilst in the commercial sector the dynamic lettings market in particular could provide fresh impetus, residential property is likely to continue to play an important role for investors due to its stable long-term demand.
“The Berlin real estate market is developing in very different ways. Whilst the commercial real estate market is still characterised by caution, the residential investment market is demonstrating its strength as a stable asset class. The high demand for housing creates attractive long-term prospects. However, investors are still holding back in view of the uncertainty surrounding the future direction of housing policy in Berlin,” says Jacopo Mingazzini, CEO of The Grounds. “This makes the positive signals from the federal government regarding the creation of better framework conditions for residential investors all the more important. The announced measures to reduce construction costs and a reliable legal framework can help to further strengthen investors’ confidence in Berlin as a location.”
