German housing prices rise at slower pace

Housing prices in Germany are showing signs of cooling, with a marked slowdown in the rate of increase during the first quarter of 2026. The average price rise for residential properties stood at 1.4 percent compared to the same period last year, a significant drop from the 2.6 percent increase seen in the final quarter of 2025 and the 3.2 percent rise in the third quarter.

The data from the Federal Statistical Office highlights a growing divergence in regional markets. While condominiums in sparsely populated rural districts saw prices increase by 3.6 percent, the seven largest cities, Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart, and Düsseldorf, experienced a near standstill, with prices rising by only 0.3 percent.

Furthermore, prices in densely populated rural districts even declined by 0.4 percent. For single-family and two-family homes, the increase was most pronounced in metropolitan areas at 1.4 percent, contrasting with a 0.8 percent fall in sparsely populated rural districts. This trend follows a period of significant price drops in 2023, attributed to high inflation triggered by the war in Ukraine, coupled with rising interest rates and construction costs.