In the second quarter of 2026, the German residential property market presents a constellation that supports the position of prospective buyers. Asking prices for condominiums, as well as for single and two-family homes, show stability on average. In parallel, the available market supply is increasing, as owners are now realising previously deferred sales. A rise of 10.8 per cent in existing homes advertised online was registered in the second quarter of 2026 compared to the same quarter last year. The average asking price for condominiums was EUR 4,034 per square metre, representing an increase of 1.5 per cent year-on-year. For single and two-family homes, the median asking price was EUR 395,000, a plus of 2.6 per cent. Adjusted for inflation, real asking prices in both segments remain almost unchanged, primarily due to continued low construction activity, which prevents an easing of the shortage situation in the new-build sector. This is according to the latest "Market Report Residential Properties in Germany 2026/27" from Engel & Völkers, which provides a detailed analysis of nationwide developments as well as 55 selected cities.
This development creates a calm market environment, distinguishing itself from the high dynamics of previous years, as Till-Fabian Zalewski, Group Co-CEO of Engel & Völkers, noted. He remarked that the moderate purchase price development, combined with simultaneous increases in the rental market, makes acquiring a property a particularly sensible option. Over the last five years, a cumulative increase of 24.3 per cent in asking rents for flats has been observed.
Regional Price Differences and Energy Factors
Despite general price stability, significant regional differences are apparent. The highest asking prices for condominiums were recorded, as in the previous year, in Munich at EUR 9,061/m², Hamburg at EUR 6,569/m², and Frankfurt am Main at EUR 6,358/m². For single and two-family homes, Munich leads the ranking with EUR 1,254,000, Bad Homburg with EUR 1,090,000, and Konstanz with EUR 985,000.
Another increasingly decisive factor for price development is a property's energy quality. Buyers are placing greater emphasis on the condition of refurbishment. This is particularly evident with heating types: homes with modern heating systems such as district heating or electric heat pumps have seen an increase in asking price of over 5 per cent in the last three years. In contrast, homes with oil or gas heating developed slightly negatively, with -2.0 per cent and -0.9 per cent respectively. The overall condition of a property is also subject to more precise scrutiny. Condominiums in energy efficiency classes A+, A, and B achieved a price increase of 1.2 per cent when comparing the first halves of 2025 and 2026. In classes C and D, a slightly positive development of 0.3 per cent was discernible. From class E, this trend reverses: for classes E and F, there was an average price reduction of 1.4 per cent, and from class G, a reduction of 2.1 per cent.
Forecast and Value Retention
For the coming months, Engel & Völkers forecasts a continuously stable development in the private residential property market. Constant transaction activity and slight price increases within the current inflation rate are expected. Significant price jumps are therefore not anticipated. Asking rents are projected to increase by around two per cent annually.
Till-Fabian Zalewski summarised that market analyses clearly demonstrate the value retention of residential properties and the resilience of the market. He emphasised that energy quality is becoming an independent price factor. An investment in refurbishment secures a significant long-term value advantage over unrefurbished properties.
