In Germany, there are signs of a trend reversal in the German real estate market. This opens up new opportunities for prospective buyers - although this depends on the respective region.
Frankfurt. Bad news for sellers, good news for interested parties: hopes for a sustainable recovery in the German real estate market have been set back. For the first time in more than two years, condominium prices have fallen below the previous year's level. At the same time, fewer properties are being brokered and apartments and houses are for sale longer.
This emerges from the Greix purchase price index published on Thursday by the Kiel Institute for the World Economy (IfW), which the Kiel-based company created together with the expert committees. The index is based on sales that have actually been notarized and is therefore considered a particularly reliable indicator of developments in the real estate market.
Accordingly, condominium prices fell by 0.2 percent in the third quarter of 2026 compared to the same period last year. It is the first year-on-year decline since the second quarter of 2024. In one city in particular, prices are now coming under significant pressure.
The real estate market develops very differently from region to region. According to the data, the weakness is particularly clear in Berlin. In the capital, condominium prices fell by 0.9 percent in the third quarter compared to the previous quarter. In a year-on-year comparison, the decline was even 2.9 percent. It was the third quarter in a row with prices falling compared to the previous year.
In other large cities, however, a different picture emerges. In Cologne, condominiums rose in price compared to the previous quarter by 2.8 percent, in Frankfurt am Main by 2.4 percent and in Düsseldorf by 0.8 percent. Prices almost stagnated in Stuttgart, as did Leipzig.
The development in Cologne is particularly striking. Prices there in the third quarter were 4.6 percent above the previous year's level. In Leipzig, on the other hand, the annual price increase fell significantly from 3.9 to just 0.6 percent.
Overall, prices rose slightly by 0.5 percent in the third quarter compared to the previous quarter. But developments show that the upswing in the real estate market has largely come to a standstill. At the beginning of 2025, condominiums had increased in price by 3.3 percent within a year. In the second quarter of 2026 the increase was only 0.1 percent.
“The rise in prices for condominiums has practically come to a standstill,” says Jonas Zdrzalek, Greix project manager at the Kiel Institute for the World Economy. The first year-on-year decline in more than two years marks a trend reversal, even if the decline is still small.
The slowdown is also evident in other properties. Single-family houses fell by 0.5 percent compared to the previous quarter, and multi-family houses by 0.2 percent. However, compared to the previous year, prices for single-family homes were still 0.9 percent higher.
Multi-family homes, on the other hand, were 2.4 percent cheaper. However, due to the small number of sales, the results for multi-family homes are only of limited significance.
Vonovia CFO Philip Grosse also reported a difficult buying market this week. “When it comes to selling condominiums, we continue to notice that there is great reluctance from many buyers,” he said a few days ago when presenting the quarterly report.
The decline is even more pronounced in the third quarter when inflation is taken into account. In real terms, i.e. measured in terms of purchasing power, condominium prices fell by three percent within a year. The decline was two percent for single-family homes and even 5.2 percent for multi-family homes.
This is a remarkable development for prospective buyers. While nominal real estate prices are still stagnating in many places, the properties are already losing significantly in value when adjusted for inflation. The consequence: “Apartments and houses remain advertised longer and the asking prices are adjusted downwards more often,” says Zdrzalek.
However, this does not automatically mean that home ownership becomes more affordable for those interested. In addition to the purchase price, the financing costs are particularly important. The continued high building interest rates mean that many interested parties find it difficult to finance a property despite stagnating or falling prices.
