The real estate year 2025 had a few surprises in store. Time for a look back: How have prices, sales figures and demand developed – and what economic or political influences have shaped the market?
Following the slump in 2023, property prices recovered slightly in 2025. Nationwide, average residential property prices rose by a few percent. In many places, values are still a long way from the highs of 2022, but the fall in prices has stopped for the time being. Although demand remained high, high interest rates and economic uncertainties led to purchase decisions being made much more cautiously.
The gap between the regions widened further in 2025: prices in sought-after cities continued to rise slightly, while structurally weak areas and overheated surrounding regions recorded stagnation or slight declines. The number of property sales remained below the level of the boom years. Many owners were reluctant to sell as the top prices of previous years could no longer be achieved. Buyers, on the other hand, took more time and negotiated more confidently.
Interest rates, construction crisis, regulation – the influencing factors in 2025
The rise in interest rates in previous years put the brakes on many prospective buyers in 2025. It was not until the middle of the year that the European Central Bank began to lower key interest rates again, which eased financing conditions somewhat. Nevertheless, at around 3 percent, real estate loans were significantly higher than in the previous years of zero interest rates – an upheaval that private buyers and small investors first had to get used to.
The German government extended the rent freeze, but once again missed its target of 400,000 new apartments. High construction costs and uncertain funding conditions led to a halt in construction in some places – the “construction crisis” made headlines. At the same time, the population grew due to immigration, which kept the demand for housing high in many cities. Some small investors thought twice about their purchase plans out of concern about stricter rent regulation and falling returns.
Outlook 2026: What lies ahead for buyers and sellers
The real estate market is likely to continue its consolidation course in 2026. Slight increases in value are possible in sought-after regions, while weaker locations are likely to remain stable or decline slightly. A construction interest rate of around three percent creates planning security again and could slightly stimulate demand – provided the economic situation remains stable and there are no new burdens.
Sellers should not hope for a quick return to the previous peak prices, but should calculate with realistic offer prices. Overall, buyers and sellers will face a balanced market in 2026. Solid preparation and precise knowledge of regional market conditions will be crucial for both sides.
Would you like to find out what the developments of 2025 will mean for your planned real estate sale or purchase? Our experts will analyze your location and your personal situation based on current market data. Contact us – we will prepare you for the coming year and support you with your real estate plans.
Notes
The generic masculine is used in this text to improve readability. Female and other gender identities are explicitly included where this is necessary for the statement.
Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific individual case.
Photo: © Wordliner/Image created with OpenAI’s Sora
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