House prices in 2026: up in euros, down in real terms
Prices for houses and flats in Germany are barely rising, and after inflation they're falling. More flats are being sold, fewer houses – and new homes are still in short supply. The market in autumn 2026.
· 3 minutes read
After the price slide of 2022/23 and the recovery of 2024/25, Germany's property market is treading water in 2026. Prices are only rising a little in euros – more slowly than inflation. For buyers that means a home has become somewhat cheaper relative to everything else, even if interest rates eat that up again.
The figures
Three big indices, three slightly different methods, one shared picture:
- Federal Statistical Office (Destatis): residential property cost only 0.6% more on average in the second quarter of 2026 than a year earlier, and 0.3% more than in the first quarter.
- GREIX (Kiel Institute with the local valuation boards, based on actual purchase contracts): flats +0.4%, single-family houses +1.9%, apartment buildings −3.5% year on year.
- vdp (Pfandbrief banks, based on financings): residential property +1.9%, flats +2.6%.
Inflation was recently around 3%. Adjusted for inflation, flats were 2.1% cheaper in the second quarter than a year earlier according to GREIX, single-family houses 0.7%. "Sellers get higher prices in nominal terms, but can afford less with that amount than a year ago," the Kiel researchers write.
Houses or flats: who buys what?
The difference between the segments is telling:
- Flats are selling more. In the first quarter of 2026, 9.3% more flats changed hands than a year earlier, according to GREIX. Prices are barely moving – in the seven largest cities they were even 0.4% below the previous year according to Destatis, and 1.8% lower in urban districts.
- Houses are selling a little less (−3.2%) but have become slightly dearer. That fits a market in which fewer people can afford a house while the supply of good houses stays tight.
A simple explanation for the shift towards flats: with rates around 4%, they're the only affordable way into ownership for many.
For the full year, the research institute GEWOS expects about 612,000 residential sales, 4.4% fewer than in 2025 – and more than 5% fewer for single-family homes.
Why the momentum is missing
- Interest rates: home loans fixed for 5 to 10 years cost 3.81% on average in August, the most since late 2023 – and government bond yields rose further in September. More in our article on mortgage rates.
- Inflation and energy: with 3.3% inflation in September and rising energy prices, less money is left for loan payments.
- Room to negotiate: according to GREIX, asking prices in listings are being cut more often again – a sign of fading momentum.
New homes are still missing
On the other side there's a supply problem: only 206,600 homes were completed in 2025, the fewest since 2012. Building permits are rising again – up 13.5% for new-build flats from January to July 2026 – but it takes years for permits to become homes. So asking rents keep climbing, by 3.0% in a year according to GREIX.
The Bundesbank, which warned of overpriced cities for years, now sees the overvaluation as largely gone.
What this means for buyers
- No rush, no crisis: prices are barely rising, but no crash is in sight either. Waiting saves little on the price – but may mean higher rates.
- Negotiating pays: especially for properties listed for a while, and those needing renovation.
- The monthly payment decides: what a home costs today depends more on the interest rate than on the price. Work out what's affordable with your own numbers: Can I buy this home?
Sources: Federal Statistical Office (house price index Q2 2026, building permits July 2026), GREIX purchase and rent price indices Q2 2026 (Kiel Institute), vdp property price index Q2 2026, GEWOS, Deutsche Bundesbank.