10 hottest real estate areas in Germany in 2025

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

Where are the best places to invest in Germany right now? Is Berlin still the top pick, or are cities like Leipzig, Hamburg, and Munich gaining ground? What makes these locations attractive to both local and foreign investors?

We’re often asked these questions because we work directly with notaries, real estate agents, and clients who invest across the country. Our firsthand experience in these markets gives us unique insights into where the real opportunities lie. To save everyone from asking privately, we’ve written this article to share our knowledge broadly.

Our goal is to highlight the hottest markets in Germany and explain why they’re worth your attention in 2025.

If you have suggestions or want us to dive deeper into a specific area, let us know. You shoot an email, we answer within 24 hours.

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INVESTROPA

A team specialized in real estate investing in European countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Germany. If you’d like to learn more about us, you can check our presentation page.

1) Hamburg’s HafenCity is booming with modern waterfront projects and high rental yields

HafenCity in Hamburg is a hot market thanks to its modern waterfront developments and high rental yields.

With private investments pouring in, around €10 billion has been invested in HafenCity, boosting property values significantly. This influx of capital highlights the area's growing allure and potential for lucrative returns.

The rental scene here is buzzing, with prices between €12 and €25 per square meter, showing just how in-demand these properties are. High demand is fueled by the area's modern urban vibe and residential density, making it a magnet for those seeking a contemporary lifestyle.

Investors are drawn to HafenCity because of its above-average rental yields compared to other Hamburg districts. This makes it a prime spot for those looking to maximize their investment returns.

HafenCity Hamburg GmbH is the mastermind behind this vibrant urban space, featuring a 10.5 km dockside promenade and a 3.1 km Elbe embankment. These attractions not only lure investors but also enhance residents' quality of life, adding to the area's charm.

The master plan for HafenCity is all about balance, with a mix of residential, educational, cultural, and leisure facilities. This ensures a sustainable urban environment, making it even more appealing for potential buyers.

Sources: Facts and figures - Hafencity, HafenCity Hamburg GmbH, ULI Global Awards for Excellence: Hafen City, Hamburg, Germany

2) Mainz is gaining interest for its closeness to Frankfurt and rising commuter population

Mainz is buzzing with real estate activity thanks to its closeness to Frankfurt.

Frankfurt, a major economic hub, draws many workers who prefer to live in nearby cities like Mainz. This has led to a growing commuter population traveling from Mainz to Frankfurt, boosting the demand for housing in Mainz.

The population in Mainz has been on the rise, jumping from 200,344 in 2011 to 232,664 in 2024. This growth indicates that more people are choosing Mainz for its convenient location near Frankfurt. As more folks move in, the housing demand naturally spikes, fueling real estate activity.

Transportation between Mainz and Frankfurt has improved, especially with projects like the Regionaltangente West. This initiative aims to enhance connectivity and ease congestion, making Mainz even more appealing for those working in Frankfurt. With better transport options, living in Mainz while working in Frankfurt becomes a no-brainer.

Insider tip: Mainz offers a charming lifestyle with its historic sites and vibrant cultural scene, which is a big draw for those looking to escape the hustle of Frankfurt. The city’s unique blend of old-world charm and modern amenities makes it a hotspot for new residents.

For potential buyers, Mainz presents a promising opportunity. The city’s real estate market is thriving, and with its strategic location and improved transport links, it’s no wonder that property values are on the rise.

Sources: BNP Paribas Real Estate, World Population Review, CDM Smith, DZ HYP Residential Market Report

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) Bremen's Überseestadt is thriving with urban redevelopment and appealing investment opportunities

Überseestadt in Bremen is a hot market thanks to its ongoing urban redevelopment and attractive investment opportunities.

In recent years, property prices have surged, with average monthly rents hitting €10.10 per m² in 2023-2024. This jump shows a strong demand for quality spaces, and it's likely to keep growing as more ESG-compliant and high-quality spaces are developed. The area is buzzing with new residential and commercial projects, with a total take-up of 110,000 m² in 2023, more than doubling from the previous year.

Bremen's strategic push in urban redevelopment is a big driver here, aiming to shift the city from a 'harbour city' to a 'city of science'. Government initiatives like City-UpTrade and the (Con)temporary Crafts Studio are also playing a role, offering start-up financing and promoting creative urban production. These efforts have attracted both national and international companies, boosting the demand for office and retail spaces.

For those considering investing, the area offers a mix of modern living and working environments, making it a prime spot for both residential and commercial real estate. The local government's commitment to innovation and sustainability is evident, and it's drawing in a diverse range of businesses and residents.

With its strategic location and ongoing development, Überseestadt is not just a place to live or work; it's a community that's evolving with a focus on the future. The blend of historical charm and modern amenities makes it an attractive option for anyone looking to invest in a vibrant and growing area.

Whether you're looking for a new home or a business opportunity, Überseestadt offers a unique blend of culture, commerce, and community. It's a place where tradition meets innovation, and where the future is being built today.

Sources: Bremeninvest Property Market Report 2024, Bremen's Innovation Policy, Bremeninvest Property Market Report 2023

4) Freiburg im Breisgau is popular for its eco-friendly planning and high demand for sustainable homes

Freiburg im Breisgau is turning heads with its eco-friendly urban planning and a strong push for sustainable housing.

One standout project is the Dietenbach district, which plans to offer 6,500 climate-neutral flats along with schools and businesses. This isn't just about meeting housing demand; it's about making sure homes are affordable and environmentally friendly. Imagine living in a place where your home doesn't just shelter you but also respects the planet.

Then there's the Vauban district, a real-life example of sustainable urban living. Here, you'll find low-energy passive solar houses and a lifestyle that encourages ditching the car. The design of Vauban makes it easy for residents to live comfortably without relying on cars, which is a huge plus for anyone keen on eco-friendly living.

Freiburg's reputation as a "Green City" is well-earned. Known as Europe's "solar city," the goal is 100% renewable energy by 2035 and carbon neutrality by 2050. Solar panels are everywhere, from public buildings to homes, showing the city's commitment to renewable energy. This focus on sustainability extends to its car-free downtown and extensive bike lanes, making it a top choice for those seeking a high quality of life.

Living in Freiburg means being part of a community that values the environment. The city's initiatives are not just about reducing carbon footprints but also about creating a vibrant, livable space. It's a place where you can enjoy the benefits of modern living while being kind to the earth.

For anyone considering a move, Freiburg offers a unique blend of sustainability and livability. It's not just about the numbers; it's about a lifestyle that prioritizes the planet and its people. The city's approach to urban planning and housing is a model for others to follow.

Sources: The Mayor, Smart Cities Dive, Adventure.com

5) Leipzig’s Plagwitz is booming as a trendy area with rising property values after its industrial transformation

Plagwitz in Leipzig is booming, transforming from an industrial hub to a trendy hotspot.

Old factories are now chic apartments and offices, blending historical charm with modern living. This makeover has made Plagwitz a magnet for diverse crowds, pushing property values up. Top asking prices have hit around €4,140/m², showing it's outpacing other areas.

Urban development has been a game-changer here. Projects like the Heinrich-Heine-Canal revamp and new bike lanes have boosted the area's appeal. These changes make Plagwitz not just livable but desirable for both locals and businesses.

Media buzz has also played a part, painting Plagwitz as the place to be. This coverage has caught the eye of homebuyers and investors, adding to the district's allure.

Locals love the mix of old and new, with cafes and art spaces popping up in revamped buildings. This blend of culture and convenience is a big draw for young professionals and families alike.

Investors are keen on Plagwitz, seeing it as a smart bet. The district's ongoing transformation promises more growth, making it a hot spot in Leipzig's real estate scene.

Sources: JLL Germany, Nationale Stadtentwicklungspolitik, OpenPR

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6) Erfurt is gaining interest for its central location and expanding infrastructure projects

Erfurt is quickly becoming a real estate hot spot thanks to its prime location and booming infrastructure.

Right in the heart of Germany, Erfurt's central location makes it incredibly convenient for both people and businesses. This connectivity is a major attraction for those wanting easy access to other parts of the country.

The city has been investing heavily in its infrastructure, with projects like the VDE 8.1 rail upgrade. This allows trains to zip through at speeds of up to 300 kilometers per hour, making trips to Berlin, Frankfurt, and Munich a breeze. Such rapid transit options are a big plus for potential residents and investors.

Erfurt is also buzzing with new development projects. Take the Altonaer Höfe project, for instance, which is adding fresh residential and commercial spaces. This surge in development indicates a strong demand for housing and business opportunities, drawing in homebuyers and companies alike.

With these developments, Erfurt is not just a place to live but a thriving hub for business. The city's growth is a magnet for those looking to invest in a promising area. New projects are reshaping the city, making it an exciting place to be.

As Erfurt continues to evolve, its appeal only grows stronger. The combination of location, infrastructure, and development makes it a prime choice for anyone considering a move. Erfurt's transformation is well underway, and it's catching the eye of many.

Sources: DB Engineering & Consulting, DVI Group, Knight Frank

7) Dresden's Neustadt is gaining attention for its vibrant culture and rising rental demand

Dresden's Neustadt is a magnet for investors, thanks to its vibrant cultural scene and rising rental demand.

Property prices in Neustadt have climbed, with rentals now between €7 and €8 per square meter, making it one of Dresden's pricier spots. This surge is fueled by the area's cultural attractions and the growing interest from renters, especially young professionals and students. They are drawn to Neustadt's lively atmosphere, which has led to increased competition in the rental market.

Rental yields are climbing as demand remains high, with the median asking rent in Neustadt now outpacing other parts of Dresden. This reflects the area's popularity, particularly among a younger crowd. The influx of this demographic has pushed rents higher, making it a competitive market for those looking to rent.

Dresden's cultural scene is buzzing, with attendance at events comparable to the 76% engagement seen in Scotland in 2023. This lively cultural vibe, along with the growth of new businesses and startups, is boosting the local economy and driving rental demand. The development of infrastructure and public transport in Dresden further enhances its appeal.

Neustadt's charm lies in its mix of old-world charm and modern amenities, making it a desirable place to live and invest. The area's cultural offerings, from art galleries to music festivals, are a big draw for both residents and visitors. This cultural richness is a key factor in the rising property values and rental demand.

Investors are taking note of Neustadt's potential, as the area's vibrant lifestyle and economic growth make it an attractive option. The combination of cultural attractions and a strong rental market is a winning formula for those looking to invest in property. With its unique blend of culture and commerce, Neustadt is a standout in Dresden's real estate landscape.

Sources: BNP Paribas Real Estate, Saxowert, Scottish Government, Press Service

8) Potsdam is booming with its historical charm and closeness to Berlin

Potsdam is experiencing a real estate boom due to its historical significance and proximity to Berlin.

In November 2024, home prices in Potsdam saw a remarkable increase, rising by 172.7% compared to the previous year, with a median price of $240K. This surge in property value highlights the growing demand for real estate in the area. The city's charm and strategic location make it a hot spot for both homebuyers and investors.

Potsdam's proximity to Berlin is a major draw. Being close to a major city like Berlin offers the best of both worlds: the tranquility of a smaller, historic town and the convenience of a bustling metropolis. This unique blend attracts those who want easy access to Berlin's amenities while enjoying Potsdam's serene environment.

The city's rich history and cultural attractions add to its appeal. As a former royal seat and a hub for scientific innovation, Potsdam is not just a place to live but a destination to experience. The influx of tourists and new residents eager to explore its vibrant culture further fuels the real estate market.

Investors are particularly interested in Potsdam due to its potential for growth. The city's development is supported by its historical significance, making it a stable and promising investment. Historical sites and cultural landmarks continue to draw attention, ensuring a steady stream of interest in the real estate sector.

For those considering a move or investment, Potsdam offers a unique opportunity. Its blend of history, culture, and proximity to Berlin makes it a compelling choice. The city's ongoing development promises continued growth and potential for future returns.

Sources: Engel & Völkers Brandenburg, Hochtief, Redfin

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) Regensburg's Old Town is booming with its UNESCO status and limited housing supply

Regensburg's Old Town is seeing a real estate boom, thanks to its UNESCO World Heritage status.

This prestigious recognition adds a layer of cultural allure, making the area highly desirable for those who cherish history. Buyers are drawn to the unique charm and historical significance that the Old Town offers, which is a rare find in today's market.

Adding to the appeal is the limited housing supply. Strict regulations on new construction help maintain the area's historical integrity, but they also mean fewer new homes are available. This scarcity, paired with high demand, naturally pushes property prices upward.

There's also a noticeable trend of international buyers eyeing properties in UNESCO sites. These buyers often pay a premium for the privilege of owning a piece of history, further fueling demand in Regensburg's Old Town.

Local insiders note that the area's unique blend of history and modern living is a significant draw. The Old Town offers not just a home, but a lifestyle steeped in culture and tradition.

With its cobblestone streets and medieval architecture, Regensburg's Old Town offers a living experience like no other, making it a hot spot for real estate investment.

Sources: Tranio, Nova School of Business and Economics, DZ HYP

10) Jena is emerging as a real estate hotspot with its growing tech industry and student-driven rental demand

Jena is quickly becoming a real estate hotspot thanks to its booming tech industry and vibrant student life.

With more tech companies setting up shop, Jena is transforming into a thriving tech hub. This influx of businesses is drawing in professionals who need places to live, pushing up housing demand.

Friedrich Schiller University of Jena is also seeing a surge in student numbers, with over 17,000 students enrolled in 2024. These students are on the hunt for rental properties, adding to the already high demand.

Media buzz and government support are shining a spotlight on Jena's potential, making it even more appealing for businesses and new residents. This attention is leading to low vacancy rates and boosting rental yields, which is music to the ears of real estate investors.

For those looking to invest, Jena offers a unique blend of tech-driven growth and a bustling student scene. The combination of these factors is creating a dynamic rental market that's hard to ignore.

As Jena continues to grow, it's becoming a prime location for anyone interested in real estate, whether you're looking to rent or invest. The city's expanding tech industry and student population are key drivers of this trend.

Sources: DZHYP Residential Market Report, EduRank, ASEAN UP

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.