Residential property prices in Germany are continuing their upward trend. According to the latest property price index from the Association of German Pfandbrief Banks (vdp), prices in the second quarter of 2026 were 1.9 per cent higher than in the same quarter of the previous year. Prices also continued to rise in Germany’s seven largest cities, where residential property prices increased by an average of 2.1 per cent. Berlin also recorded an increase, confirming the overall stability of the residential property market. As reported last week by Tagesschau WELT and other media outlets, the ongoing housing shortage in particular continues to exert upward pressure on prices and rents.
The vdp Property Price Index is based on completed transactions. The underlying database is updated quarterly with sales data from more than 700 financial institutions. The index thus enables a nuanced analysis of price trends across different property segments and regions.
Across the residential property market, price trends were consistently positive in the second quarter. Condominiums saw the sharpest rise in prices, increasing by 2.6 per cent compared with the second quarter of 2025. Prices for detached houses rose by an average of 2.0 per cent, whilst the increase for apartment buildings stood at 1.6 per cent. All three segments also recorded growth compared with the previous quarter. Overall, residential property prices rose by 0.3 per cent between the first and second quarters of 2026.
The trend in the major conurbations is particularly significant. Across the top seven cities – Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, Munich and Stuttgart – residential property prices rose by 2.1 per cent year-on-year, slightly more than the national average. Hamburg led the way with an increase of 3.8 per cent, followed by Cologne with 2.5 per cent, and Frankfurt and Düsseldorf with 2.4 per cent each. Munich recorded growth of 2.3 per cent. In Berlin, residential property prices rose by 1.6 per cent year-on-year. Only Stuttgart recorded lower growth, at 0.7 per cent.
According to the vdp, the continued upward trend in the residential property market is primarily driven by persistent excess demand. This is also reflected in rents for new tenancies in apartment buildings. Across Germany, these were 3.2 per cent higher in the second quarter of 2026 than a year earlier. As rents rose more sharply than prices for apartment buildings, the measured yield also increased nationwide. In the top seven cities, however, rent growth was lower, averaging 1.5 per cent. Berlin recorded the lowest increase among the seven major cities, at 0.6 per cent.
„Residential property prices continuing to rise despite a challenging macroeconomic environment underscores the stability of this market segment. In Berlin, too, the latest transaction data once again show an increase in prices. The persistent excess demand, combined with far too little new construction, suggests that residential real estate in Berlin and the surrounding areas offers attractive long-term prospects,” says Jacopo Mingazzini, Management Board member of The Grounds. „What matters now is that the announced measures to facilitate residential construction are implemented swiftly in practice. Only through increased new construction and a reliable regulatory framework for private investment can the structurally insufficient housing supply be improved on a sustainable basis.”
