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What is happening in Frankfurt’s real estate market? Are prices on the rise or decline? Is the city still a magnet for international investors? How are local government policies and taxes shaping the real estate landscape in 2025?
These are the questions we hear every day from professionals, buyers, and sellers across Frankfurt and beyond. Maybe you’re curious about the same things.
We know this because we stay closely connected with local experts and individuals like you, exploring the Frankfurt real estate market daily. That’s why we crafted this article: to offer clear answers, insightful analysis, and a comprehensive view of market trends and dynamics.
Our aim is straightforward: to make sure you feel informed and confident about the market without needing to search elsewhere. If you think we missed something or could improve, we’d love to hear your feedback. Feel free to message us with your thoughts, and we’ll strive to enhance this content for you.
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1) Mid-range property prices will rise moderately with steady demand from local buyers
Mid-range properties in Frankfurt are expected to experience moderate price increases due to steady demand from local buyers. This trend is supported by consistent year-over-year price appreciation, with projections indicating annual increases of 2% to 6% driven by high demand and limited supply.
The local population in Frankfurt is stable and growing, as evidenced by the dynamic labor market with around 2.55 million people employed in mid-2023. This demographic stability contributes to the sustained interest in mid-range properties, particularly among local buyers.
Moreover, real estate experts predict that demand will remain strong for mid-range properties due to their appeal to local buyers. The focus on tech-smart, energy-efficient apartments and larger suburban homes for families further underscores the preference for these properties.
Sources: CBRE News, Frankfurt Tipp
2) Foreign buyers will increasingly target Frankfurt properties as its reputation as a financial hub grows
Frankfurt is now a major player in the financial world, especially after Brexit.
Many international financial institutions have moved their European headquarters to Frankfurt, making it the most important financial center in continental Europe with around 280 financial institutions. This shift has sparked a surge in foreign direct investment in Frankfurt's real estate market. The city's growing status as a financial hub has led to the expansion of the financial district and the development of new infrastructure, making it an attractive place for foreign investors seeking stable and lucrative opportunities.
Frankfurt's significance is further highlighted by its ranking in the 2024 Global Financial Centres Index as the 10th top financial center globally. This ranking solidifies its position as a key financial hub, drawing more attention from international investors. The city's central location and well-developed infrastructure enhance its appeal, making it a prime spot for investment.
The influx of expatriates and international professionals to Frankfurt indicates a growing demand for housing and commercial properties. This trend is likely to attract more foreign buyers, as they seek to capitalize on the opportunities presented by Frankfurt's thriving financial ecosystem. The city's vibrant lifestyle and cultural offerings add to its allure, making it a desirable place to live and work.
Insider knowledge suggests that the local government is actively supporting this growth by investing in public transport and green spaces, further boosting the city's attractiveness. The combination of a robust financial sector and a high quality of life makes Frankfurt a compelling choice for property buyers.
With its strategic location in Europe and a strong economy, Frankfurt is poised to continue its upward trajectory. The city's reputation as a financial hub is expected to draw even more foreign interest, making it a hotspot for real estate investment.
Sources: Frankfurt Business, Caproasia, IFLR
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Germany versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
3) Westend properties will keep attracting wealthy individuals for their prestige and closeness to financial institutions
Properties in the Westend have consistently attracted high-net-worth individuals, and this trend is likely to continue. The area is known for its high property prices, with the median purchase price reaching 9,400 euros per square meter in 2022, making it one of the most expensive areas in Frankfurt. This high cost is a testament to its desirability and exclusivity.
Westend's proximity to major financial institutions like the European Central Bank and Deutsche Bank makes it a prime location for financial professionals. This concentration of financial institutions not only enhances the area's prestige but also makes it a convenient choice for those working in finance.
The preferences of high-net-worth individuals further support Westend's appeal. According to The Wealth Report 2024, a significant portion of ultra-high-net-worth individuals are interested in purchasing residential properties, particularly in prime markets like Westend. This aligns with the area's reputation for luxury and exclusivity.
Sources: Scaling Spaces, Von Poll Real Estate, Knight Frank Wealth Report 2024
4) Frankfurt’s property prices will stabilize following a period of rapid growth
Frankfurt's residential property prices have been on a rollercoaster, but they're expected to stabilize soon.
In late 2023, there was a shift: existing apartment prices dropped by 9%, while new houses only nudged up by 3%. This hints at a cooling market. The city has seen a boom in construction, with new developments popping up everywhere. This surge in housing options is crucial because more supply can ease the demand pressure, which usually keeps prices high.
Interest rates are climbing, making mortgages a bit of a stretch for many. This shift in affordability means fewer people are jumping into the property market, which helps keep prices in check. Economic forecasts for Germany suggest a slowdown, which might mean less cash flowing into real estate.
Frankfurt's skyline is dotted with cranes, a sign of the bustling construction scene. This boom is not just about quantity but also quality, with developers focusing on sustainable and modern living spaces. As these projects wrap up, the increased availability of homes will likely balance the market.
For potential buyers, this could be a golden opportunity. With prices stabilizing, there's less rush to make hasty decisions. Instead, you can take your time to find a property that truly fits your needs. The market's current state might also mean more room for negotiation, giving buyers a bit more power in the process.
So, if you're eyeing a place in Frankfurt, keep an eye on these trends. The city's real estate landscape is evolving, and understanding these shifts can help you make a savvy investment.
Sources: Statista, Julius Baer, JLL Germany
5) Newly developed areas will provide competitive rental yields by attracting a diverse range of tenants
Newly developed areas in Frankfurt are becoming increasingly attractive for rental investments. One of the main reasons is the competitive rental yields they offer. For instance, in 2024, Frankfurt's average gross rental yield was 3.67%, with some districts like Offenbach and Main-Kinzig showing yields up to 4.39% per annum. This is quite competitive when compared to other major cities like Berlin, which had a yield of 3.83%.
Another factor contributing to the attractiveness of these areas is Frankfurt's diverse population. As of recent studies, 38% of Frankfurt's residents have a migration background, and this diversity is expected to grow. Such a diverse population means a wide range of tenant preferences and needs, which newly developed areas can cater to effectively.
Moreover, infrastructure improvements play a significant role. The Europaviertel development, for example, is a new district in Frankfurt that is well-connected through the city's underground network. This modern infrastructure, along with new amenities, makes it appealing to tenants who prefer modern and convenient living spaces.
Additionally, the proximity of these new developments to major employment hubs increases their attractiveness. Tenants often look for places that are close to work, and areas like the Europaviertel offer this advantage, thereby driving up rental demand and yields.
Sources: CBRE News, EUCPN, VGF Frankfurt, Global Property Guide
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6) Affordable housing projects will stabilize prices in certain outer districts
In recent years, particularly in 2023 and 2024, Frankfurt has seen a significant increase in affordable housing projects in its outer districts. One notable example is the Hilgenfeld Housing Estate, which was developed as part of the "Housing for All: New Frankfurt 2018" competition. This project includes a substantial portion of subsidized and communal housing, making it more accessible to a broader population.
The government has also been proactive in supporting these initiatives through various incentives. For instance, the KfW bank expanded its domestic promotion for affordable housing, with over €10 billion allocated in the federal budget for 2024. Additionally, programs like "Social Housing Construction 2024" and "Young Living" have been introduced, providing significant funding to promote social housing and residential units for apprentices and students.
These efforts have started to show results, as seen in the stabilization of property prices in Frankfurt. The Europace index, for example, indicated a decline in prices from their highs at the end of 2021, suggesting a trend towards stabilization. Moreover, the Frankfurt program for affordable rented apartments has been instrumental in increasing the housing supply in outer districts, offering starting rents at competitive rates.
Sources: Housing Innovation, Asset Physics, Deutsche Wealth, KfW, Stadtplanungsamt Frankfurt
7) Property values in Bockenheim will increase as it becomes a hub for startups and tech companies
In recent years, Bockenheim has become increasingly attractive to startups and tech companies, largely due to the presence of innovation hubs like TechQuartier. This hub connects over 650 startups with numerous corporate partners, creating a vibrant ecosystem that fosters growth and innovation. As a result, the area has seen a significant rise in the number of startups and tech companies setting up shop.
The demand for office and residential spaces in Bockenheim has been on the rise, driven by its appeal to young professionals and tech workers. This trend is further supported by the shift towards hybrid workspaces and the development of new mixed-use projects, making the area even more desirable for those in the tech industry.
Local government initiatives have played a crucial role in promoting Frankfurt as a hub for innovation and technology. These efforts have attracted tech businesses to Bockenheim, boosting the demand for property in the area. Additionally, infrastructure improvements, such as the extension of tram lines and renovation of historic areas, have enhanced connectivity, making Bockenheim more accessible and attractive to both residents and businesses.
Sources: TechQuartier, Discover Germany
8) Virtual reality tours will become more popular, enabling remote property viewings for buyers
Virtual reality tours have become increasingly popular in the real estate market, and there are several reasons why this trend is likely to continue. First, the global VR market has been growing rapidly, valued at around $59 billion in 2023, and is expected to expand significantly in the coming years. This growth indicates that more industries, including real estate, are adopting VR technology to enhance their services.
In the past, real estate agents have already started using VR to show homes, with over 130,000 agents utilizing this technology by 2020. This shows a clear shift towards virtual tours as a standard practice in the industry. Additionally, real estate listings that include a virtual tour receive 87% more views than those without, highlighting the increased interest from potential buyers.
Buyers, especially those aged 18 to 34, are more likely to engage with properties that offer virtual tours. In fact, they are 130% more likely to book a showing if a virtual tour is available. This preference is further supported by surveys indicating that 67% of home buyers want a virtual tour when looking at a listing, and nearly half would make an offer based solely on a virtual tour.
Advancements in VR technology have made it more accessible and affordable, with companies like Matterport and Yupix developing platforms that create immersive digital models of properties. These advancements, combined with the growing number of VR platforms dedicated to real estate, make it easier for agents to offer virtual tours to a wider audience.
Moreover, the COVID-19 pandemic accelerated the adoption of remote viewing technologies, including VR tours, as physical visits were restricted. This shift has led to real estate companies investing more in VR capabilities and partnering with VR tech firms to enhance their marketing strategies. The media has also focused on the convenience and time-saving benefits of virtual tours, further promoting their use in the property buying process.
Sources: PhotoUp, Business Insider, GlobeNewswire
We have made this infographic to give you a quick and clear snapshot of the property market in Germany. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Eco-conscious investors will be drawn to green buildings due to tax incentives
Frankfurt is a hotspot for green building investments, thanks to enticing tax incentives.
The German government has rolled out a climate protection investment premium, offering a 15% tax benefit for energy-efficient projects. This initiative, capped at €30 million per company until 2029, is a big draw for those keen on sustainable development. In Frankfurt, this is particularly appealing as the city is a frontrunner in green building initiatives.
With over 260 buildings certified or registered for green certification, Frankfurt is often dubbed the German capital of green buildings. The city’s skyline, dotted with energy-efficient high-rises, and its comprehensive municipal energy management system, underscore its commitment to eco-friendly practices.
Frankfurt's efforts in sustainability have earned it recognition. Since 2009, the Green Building Frankfurt Award has been celebrating outstanding green buildings, motivating architects and construction firms to embrace sustainable projects. This recognition aligns with the growing consumer interest in sustainability, making it a fertile ground for eco-conscious investors.
For those looking to invest in properties, Frankfurt offers a unique blend of financial incentives and a strong commitment to sustainability. The city's proactive approach not only attracts investors but also sets a benchmark for other cities aiming to go green.
Sources: Energy Cities, Integra International, AMLA Frankfurt
10) Stricter rental rules will affect the profitability of short-term rentals
Stricter rental regulations have significantly impacted the profitability of short-term rental properties, especially in cities like Frankfurt. In 2023 and 2024, new local legislation required hosts to obtain permits for renting out their properties for short durations, which added a layer of complexity and cost to the process.
These regulations led to a noticeable decrease in the number of short-term rental listings on platforms such as Airbnb. For example, an Airbnb host in Frankfurt faced a hefty fine of €6,000 for not having the necessary authorization, underscoring the strict enforcement of these rules. This kind of enforcement has made many property owners wary of continuing with short-term rentals.
Moreover, the increased fines and penalties for non-compliance have further discouraged hosts. Many property owners have reported reduced occupancy rates and profitability due to the stringent permit requirements and the fear of incurring fines. This has made it challenging for hosts to maintain the same level of income they enjoyed before the regulations were put in place.
Sources: Short Term Rentalz, Enso Connect, Alloggia
11) Rent growth in older neighborhoods will stagnate as newer areas gain appeal
In recent years, particularly in 2023 and 2024, rental prices in Frankfurt have shown a clear pattern. While new rentals saw a significant increase of about 5.4% in top cities like Frankfurt, existing rents only grew by 2% throughout 2023. This suggests that older neighborhoods are experiencing slower rent growth compared to newer areas.
One reason for this trend is the demographic shift towards younger populations in Frankfurt. Many young people, often with diverse cultural backgrounds, are drawn to neighborhoods that offer modern amenities and facilities. This preference naturally leads them to newer areas that cater to their lifestyle needs.
Moreover, the city's development plans, such as the Integrated Urban Development Concept Frankfurt 2030+, emphasize improving infrastructure and public services in newer districts. This focus on enhancing living conditions in these areas makes them more appealing to potential residents.
Additionally, tenant surveys have consistently shown a preference for modern facilities and newer constructions. This trend is likely to continue, driving interest in newer neighborhoods and contributing to stagnant rent growth in older areas.
Sources: Deutsche Wealth, Wikipedia, Stadtplanungsamt Frankfurt, Batlin Group
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12) Smart home technology will be a major selling feature for new developments in Frankfurt
Smart home technology is becoming a major selling point for new properties in Frankfurt.
In Germany, the trend is clear: more homes are embracing smart technology. By 2025, 40% of German homes are expected to feature smart home devices. This surge is largely due to the rising energy costs, making energy-efficient solutions more appealing to homeowners.
People are increasingly looking for homes that offer energy efficiency and automation. The German smart home market was valued at USD 3.42 billion in 2023 and is projected to skyrocket to USD 11.75 billion by 2030. This shows a growing interest not just locally, but globally, as seen with the expected adoption by 3 in 5 US consumers by 2025.
Potential home buyers are showing a strong willingness to invest more in properties with smart features. In fact, about 75% of buyers are interested in smart homes, citing convenience, time savings, and enhanced security as their main reasons. This trend is evident in Berlin, where smart home rentals are fetching higher rents, indicating that smart technology can boost property values.
Frankfurt is no exception to this trend. The city is seeing a rise in developments that incorporate smart home technology, making it a key factor for buyers. With the increasing demand for such features, developers are keen to integrate smart solutions to attract potential buyers.
As energy costs continue to rise, the appeal of smart homes is only set to grow. This shift is not just about convenience but also about making a smart investment in a property that offers long-term savings and increased value.
Sources: NextMSC, Exploding Topics, OpenPR
13) Rents in new districts will stay competitive to draw in new residents
In recent years, the supply of residential units in newly developed districts in Frankfurt has significantly increased. For instance, in 2023, there was a 24% rise in completed apartments compared to the previous year. This increase in supply helps keep rents competitive as developers aim to fill these new units with tenants.
Developers are also employing competitive pricing strategies to attract new residents. The median rent in the new-build segment reached €18.30/m²/month, indicating that developers are setting prices strategically to draw in initial tenants. Additionally, rent variations across different districts show that developers are adjusting prices to remain competitive.
Government incentives play a crucial role in maintaining competitive rents. With approximately 250 million Euros allocated for subsidized housing construction in the 2024/25 budget, more affordable housing options are being created. This funding helps ensure that new apartments remain in demand and accessible to a broader range of residents.
Lower initial rental prices in newly developed districts compared to established areas also contribute to their competitiveness. For example, the median rent in the lower price segment is €11.60/m²/month, making these areas more attractive to budget-conscious residents. Despite a slight growth in rents, new construction segments remain competitive.
Promotional offers by property management companies further enhance the appeal of new districts. Although specific data on these offers is not provided, it is common for developers to offer incentives to attract initial tenants, such as modern amenities and infrastructure.
Surveys indicate that tenants often prefer modern amenities and infrastructure, which are more prevalent in newly developed districts. This preference drives demand for these areas, helping to keep rents competitive.
Demographic trends, such as the growing population of young professionals and families in Frankfurt, support the demand for new residential units. These groups are often seeking affordable housing, which aligns with the competitive pricing strategies in newly developed districts.
Sources: JLL Germany, JLL Housing Market Overview
14) New environmental rules will boost the development of energy-efficient buildings
New environmental regulations are set to encourage the development of energy-efficient buildings in several ways. First, the German government has proposed new laws to boost energy efficiency, including amending the German Energy Industry Act to procure at least 6 million heat pumps by 2030. This move will significantly incentivize the development of energy-efficient buildings by providing financial support and encouraging the use of renewable energy sources.
Additionally, the Federal Funding Guidelines for Efficient Buildings (BEG) have been revised to support the implementation of new energy efficiency standards. This revision provides financial incentives for developers to build energy-efficient structures, making it more attractive for them to invest in such projects. In Frankfurt, the requirement for Energy Performance Certificates (EPCs) for all buildings undergoing major renovations and new constructions has led to an increase in EPC certifications, further promoting energy efficiency.
Moreover, companies like Green-Towers GmbH are leading the way by developing nearly carbon-neutral, sustainable residential high-rises. These projects showcase the feasibility and benefits of energy-efficient building projects, encouraging other developers to follow suit. The emphasis on sustainability in Frankfurt's EPCs has also led to a broader availability of eco-friendly building materials, supporting the development of energy-efficient buildings by providing necessary resources.
Sources: AOS Shearman, Partner ESI, Green-Towers, Heuking
We made this infographic to show you how property prices in Germany compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
15) Fechenheim will attract investors seeking affordable properties with appreciation potential
Fechenheim is catching the eye of investors because it's more affordable compared to central Frankfurt. In the past, property prices in central areas like Innenstadt I were much higher, reaching 9,400 euros per square meter, while areas like Nord and Nord-West were around 5,130 euros per square meter. This makes Fechenheim an attractive option for those looking for lower prices.
Recent infrastructure developments have made Fechenheim more accessible. Improvements in public transportation and new roads have enhanced connectivity, making it easier for people to live and work there. This kind of development often leads to increased interest from investors.
Local government initiatives aimed at revitalizing Fechenheim are also a big draw. Although specific details weren't provided, such initiatives typically include urban renewal projects and community development programs, which can boost property values over time.
Historical data shows that similar suburbs in Frankfurt have seen property appreciation. With the residential construction sector in Frankfurt growing positively in the past, areas like Fechenheim are likely to follow this trend, offering potential for property value increases.
Sources: JLL Residential Market Frankfurt, Deutsche Bahn Annual Report 2023
16) Brexit will keep sparking interest from UK buyers seeking opportunities in the EU
Brexit has been a significant factor influencing UK-based buyers to look for opportunities in the EU, particularly in cities like Frankfurt. One of the main reasons is the increased inquiries and property purchases by UK buyers in the EU. For instance, sales to UK buyers in France have been rising year on year, indicating a broader trend of UK buyers seeking properties in the EU, which could extend to Germany.
Frankfurt, in particular, has become an attractive destination due to its growth as a financial hub. The city has seen a substantial increase in UK nationals relocating there, driven by its expanding financial sector. By mid-2020, Frankfurt had created thousands of jobs due to Brexit, making it a magnet for international talent, including those from the UK.
Moreover, the financial sector's growth in Frankfurt has attracted international talent and businesses. Over 60 financial institutions have applied to expand or set up in Frankfurt, with more than 30 making it their new EU hub. This includes major global banking giants, indicating a strong interest from UK businesses in maintaining a presence in the EU.
Additionally, the demand for residential properties in Frankfurt has been high, partly due to the city's appeal as a post-Brexit financial hub. Media reports consistently highlight Frankfurt's strategic location and its ability to attract international talent, cementing its position as a key destination for financial services.
Sources: MFS UK, Phaidon International, Frankfurt Main Finance
17) Asian investors will increasingly target Frankfurt’s real estate market for diversification
Asian investors are becoming more active in the Frankfurt real estate market, and there are several reasons for this trend. First, the German residential real estate market has shown significant growth, with a transaction volume of €5.3 billion in multifamily properties in 2024. This growth, despite a decrease in the proportion of international investors, indicates a robust market that attracts global attention.
Additionally, the establishment of Asian financial institutions, such as First Bank Frankfurt in 2023, highlights the increasing presence of Asian businesses in the city. This presence not only supports financial operations but also signals a growing interest in local real estate investments. Furthermore, economic uncertainties in Asia have led investors to seek diversification, and stable markets like Germany are particularly appealing.
Frankfurt's status as a financial hub has been bolstered post-Brexit, attracting firms from London and increasing its appeal to international investors, including those from Asia. The city's stability and financial infrastructure make it an attractive destination for investment. Moreover, partnerships between Asian and German real estate firms, such as substnz Capital Partners, facilitate investment activities by providing access to diverse networks and market insights.
Sources: AsiaConference 2025, First Bank Frankfurt Branch, Post-Brexit Financial Hub, German Residential Real Estate Investment Market
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.