Is now a good time to buy a property in Germany? (January 2026)

Authored by the expert who managed and guided the team behind the Germany Property Pack

Everything you need to know before buying real estate is included in our Germany Property Pack

Is it smart to buy now in Germany, or should I wait as of 2026?

Do real estate prices look too high in Germany as of 2026?

As of early 2026, residential property prices in Germany are roughly 8% above their long-term average relative to rents according to OECD valuation metrics, which suggests mild overpricing but not extreme bubble territory.

One clear on-the-ground signal is that asking prices on major portals like ImmoScout24 have stabilized after years of volatility, with fewer dramatic price cuts compared to the 2023 correction period.

Another signal is the median time-on-market, which has shortened to around 24 days for rentals in major cities, indicating that demand remains robust and buyers are competing for quality stock rather than waiting for steep discounts.

You can also read our latest update regarding the housing prices in Germany.

Does a property price drop look likely in Germany as of 2026?

As of early 2026, the likelihood of a meaningful property price decline in Germany over the next 12 months is low, primarily because the structural housing shortage continues to support prices across major cities.

A plausible price change range for Germany in 2026 is between flat (0%) and positive 4%, with the consensus among analysts from Reuters, IW Koln, and LBBW pointing toward 3% to 4% nominal growth nationally.

The single most important macro factor that could increase the odds of a price drop in Germany would be a sharp rise in mortgage rates above 4.5%, which would squeeze affordability further and reduce buyer demand.

However, most analysts expect ECB rates to remain stable or decline slightly in 2026, with mortgage rates likely hovering between 3% and 3.5%, so this risk scenario is considered unlikely in the near term.

Finally, please note that we cover the price trends for next year in our pack about the property market in Germany.

Could property prices jump again in Germany as of 2026?

As of early 2026, the likelihood of a renewed price surge in Germany is medium, meaning moderate growth is expected but a boom like 2020 to 2021 is unlikely given current mortgage rates and economic uncertainty.

A plausible upside price change range for Germany in 2026 is between 3% and 5% nationally, with prime city neighborhoods potentially seeing stronger gains of 5% to 7% if mortgage rates decline further.

The single biggest demand-side trigger that could drive prices to jump again in Germany would be a significant drop in mortgage rates below 2.5%, which would unlock pent-up buyer demand from households who have been waiting on the sidelines.

Please also note that we regularly publish and update real estate price forecasts for Germany here.

Are we in a buyer or a seller market in Germany as of 2026?

As of early 2026, Germany's property market is split: it leans toward sellers in prime city neighborhoods with energy-efficient stock, but it favors buyers in weaker regions or for properties needing expensive modernization.

Germany does not publish a standardized months-of-inventory figure like the U.S., but market activity data from GREIX shows transactions have recovered sharply by Q3 2025, which typically implies tighter supply and less bargaining room for buyers in sought-after areas.

The share of listings with price reductions in Germany has decreased compared to the 2023 correction period, suggesting that sellers in good locations have regained some leverage, though overpriced properties in less desirable areas still face markdowns.

Are homes overpriced, or fairly priced in Germany as of 2026?

Are homes overpriced versus rents or versus incomes in Germany as of 2026?

As of early 2026, homes in Germany appear mildly overpriced when comparing purchase costs to rents and incomes, sitting roughly 8% above the long-term average on OECD price-to-rent metrics.

The price-to-rent ratio in Germany is currently in the high 120s (indexed), compared to a long-term average of around 120, which means you would need roughly 25 to 30 years of rent to equal the purchase price in many cities.

The price-to-income multiple in Germany remains stretched, with Munich requiring the top 30% of earners to spend 43% of their net income on mortgage payments, well above the 35% affordability threshold used by most analysts.

Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Germany.

Are home prices above the long-term average in Germany as of 2026?

As of early 2026, home prices in Germany are above the long-term average, but the gap has narrowed significantly after a roughly 13% peak-to-trough correction from early 2022 to mid-2024.

The recent 12-month price change in Germany is approximately 3% to 4% nationally, which is notably slower than the pre-pandemic pace of 7% to 10% annual gains seen during the 2015 to 2021 boom.

In inflation-adjusted (real) terms, German property prices in January 2026 remain roughly 8% to 10% below their 2022 peak, meaning buyers today are getting better value than those who purchased at the market top.

What local changes could move prices in Germany as of 2026?

Are big infrastructure projects coming to Germany as of 2026?

As of early 2026, the biggest planned infrastructure project likely to impact property prices in Germany is Hamburg's U5 underground expansion, which is expected to improve connectivity in neighborhoods like Winterhude, Uhlenhorst, and Barmbek.

The Hamburg U5 project is currently in advanced planning stages with construction expected to continue through the late 2020s, meaning tangible price effects in affected neighborhoods may build gradually over the next three to five years.

For the latest updates on the local projects, you can read our property market analysis about Germany here.

Are zoning or building rules changing in Germany as of 2026?

The single most important zoning change being implemented in Germany is the "Bau-Turbo" law, which was passed by the Bundestag in late 2025 to speed up residential construction approvals and enable densification like adding floors to existing buildings.

As of early 2026, the net effect of the Bau-Turbo on prices is expected to be mildly cooling over the medium term by increasing supply, but analysts like CBRE note tangible effects are unlikely before 2027 given the 26 to 34-month lag from permit to completion.

The areas most affected by these rule changes in Germany are likely to be inner-city districts of the Top 7 cities where infill development and rooftop additions become more feasible, such as Berlin's Kreuzberg, Munich's Schwabing, and Hamburg's Eimsbuttel.

Are foreign-buyer or mortgage rules changing in Germany as of 2026?

As of early 2026, the direction of mortgage rule changes in Germany is slightly loosening, with BaFin having reduced the sectoral systemic risk buffer for residential mortgages in April 2025, which signals regulators see less vulnerability and supports credit availability.

There are no significant foreign-buyer restrictions being actively considered in Germany in 2026, as the residential market is not primarily driven by foreign capital like some other European cities, so rule changes here would have minimal price impact.

The most likely mortgage rule change to watch in Germany is any adjustment to macroprudential tools like loan-to-value limits or stress test requirements, which the Financial Stability Committee (AFS) could tighten if signs of overheating return.

You can also read our latest update about mortgage and interest rates in Germany.

Will it be easy to find tenants in Germany as of 2026?

Is the renter pool growing faster than new supply in Germany as of 2026?

As of early 2026, renter demand in Germany is growing faster than new rental supply, with BBSR estimating the country needs around 320,000 new units per year through 2030 while completions are expected to fall to only 215,000 in 2026.

The recent net household formation signal that best represents renter demand in Germany is continued urbanization toward the Top 7 cities, combined with a rising share of single-person households which pushes up total demand for housing units.

The pace of new completions in Germany is expected to decline further in 2026, with the IW forecasting around 215,000 units, which is nearly 50% below the government's target of 400,000 and ensures supply pressure persists.

Are days-on-market for rentals falling in Germany as of 2026?

As of early 2026, the average days-on-market for rentals in Germany is around 24 days in major urban markets, which is shorter than the roughly 28 days seen one year ago, indicating continued tightening.

In the best areas of German cities like Munich's Schwabing or Berlin's Prenzlauer Berg, well-priced one-bedroom apartments can rent within 10 to 15 days, while larger or overpriced units in less popular areas may sit for 40 to 60 days.

The main reason days-on-market is falling in Germany is persistent under-supply in urban centers combined with stable tenant demand from students, young professionals, and families seeking rental accommodation.

Are vacancies dropping in the best areas of Germany as of 2026?

As of early 2026, vacancy rates in the best-performing rental areas of Germany, such as Munich's Schwabing and Maxvorstadt, Berlin's Prenzlauer Berg and Mitte, and Hamburg's Eimsbuttel and Winterhude, remain extremely low at below 1% and are essentially stable at rock-bottom levels.

In these prime neighborhoods, vacancy rates are around 0.1% to 0.3%, compared to the national average which includes eastern regions with vacancies of 7% or higher, so the contrast is stark.

One practical sign for landlords that the best areas are tightening in Germany is that premium rental listings are receiving multiple applications within days, and tenants are increasingly offering above asking rent to secure apartments in sought-after districts.

By the way, we've written a blog article detailing what are the current rent levels in Germany.

Am I buying into a tightening market in Germany as of 2026?

Is for-sale inventory shrinking in Germany as of 2026?

As of early 2026, for-sale inventory in Germany is mixed nationally, but the effective inventory of high-quality, energy-efficient homes in good locations is tight because much of what is listed requires expensive modernization.

Germany does not publish a standardized months-of-supply figure, but market activity data from GREIX suggests that in prime city markets, the effective supply remains constrained and properties meeting buyer quality expectations move quickly.

One key reason inventory feels tight in Germany is that homeowners with low fixed-rate mortgages from the pre-2022 era are reluctant to sell and lose their favorable financing, which limits resale listings.

Are homes selling faster in Germany as of 2026?

As of early 2026, homes in Germany are selling faster than during the 2023 slump period, with GREIX reporting market activity nearing boom levels by Q3 2025 as transaction volumes recovered sharply.

Compared to one year ago, the year-over-year change in selling time in Germany shows improvement, with well-priced properties in desirable locations moving more quickly as buyer confidence has returned following the price correction.

Are new listings slowing down in Germany as of 2026?

As of early 2026, we are not fully confident in precise year-over-year new listing data for Germany, but the broader signal is that the constraint on supply comes more from weak new construction than from resale listing behavior.

Germany typically sees stronger listing activity in spring (March to May) and early autumn (September to October), with winter months being seasonally slower, and current listing levels appear consistent with these patterns.

One plausible reason new listings may be slower in Germany is that existing homeowners with sub-2% mortgages from 2020 to 2021 face a significant financing cost increase if they sell and buy again at current 3% to 3.5% rates.

Is new construction failing to keep up in Germany as of 2026?

As of early 2026, the gap between new housing completions and household demand in Germany is severe: BBSR estimates the country needs roughly 320,000 units per year, while IW forecasts only about 215,000 completions in 2026.

The recent trend in building permits shows a tentative recovery in 2025 with permits up around 11% through September, but completions lag permits by 26 to 34 months, so 2026 and 2027 completions are already locked in at low levels.

The single biggest bottleneck limiting new construction in Germany is the combination of high construction costs, lengthy permit approval processes that can take two years or more, and weak profitability for developers at current rent and price levels.

Will it be easy to sell later in Germany as of 2026?

Is resale liquidity strong enough in Germany as of 2026?

As of early 2026, resale liquidity in Germany is reasonably strong in major city markets, with well-priced homes in good locations typically selling within a few weeks rather than months.

The median days-on-market for resale homes in Germany's Top 7 cities is generally in the range of three to six weeks for quality properties, which compares favorably to the healthy liquidity benchmark of under 90 days.

One property characteristic that most improves resale liquidity in Germany is energy efficiency: homes with good energy performance certificates (EPC ratings A to C) sell significantly faster than those requiring costly retrofits to meet new standards.

Is selling time getting longer in Germany as of 2026?

As of early 2026, selling time in Germany has actually shortened compared to the 2023 correction period, when the market was sluggish and buyers were hesitant due to rising rates and economic uncertainty.

The current median days-on-market in Germany ranges from around three weeks for prime city apartments to two to three months for houses in weaker regions or properties needing significant renovation.

One clear reason selling time can lengthen in Germany is if a property has poor energy performance and requires expensive upgrades, as buyers are increasingly factoring retrofit costs into their offers and timelines.

Is it realistic to exit with profit in Germany as of 2026?

As of early 2026, the likelihood of selling with a profit in Germany is medium to high if you hold for at least five to seven years, buy in a good location, and choose an energy-efficient property.

The minimum holding period in Germany that most often makes exiting with profit realistic is around five to seven years, which allows you to absorb transaction costs and benefit from at least one full price cycle.

The total round-trip cost in Germany, including property transfer tax (3.5% to 6.5% depending on state), notary and registration fees (1.5% to 2%), and agent commissions (3% to 7%), typically adds up to 10% to 15% of the purchase price, or roughly 40,000 to 75,000 euros on a 500,000 euro property (around 42,000 to 78,000 USD or 40,000 to 75,000 EUR).

One clear factor that most increases profit odds in Germany is buying below market value or targeting high-demand segments like energy-efficient apartments in transit-accessible neighborhoods of the Top 7 cities.

What sources have we used to write this blog article?

Whether it's in our blog articles or the market analyses included in our property pack about Germany, we always rely on the strongest methodology we can and we don't throw out numbers at random.

We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.