Real estate: Rents are rising faster than construction costs – investors are returning to the real estate market

An exclusive evaluation shows that investors have the courage to return to the real estate market. In the second quarter they significantly reduced their investments.

Dusseldorf. After a cautious second quarter, according to a current study, investors have returned to the real estate market. As an analysis by the construction financing broker Hüttig & Rompf, which is available exclusively to the Handelsblatt, shows, their share of the financing brokered by the company rose from 15.7 percent in the second quarter to 21 percent, thus returning to the usual level.

The outbreak of the Iran War caused financing interest rates to rise significantly and noticeably reduced investor interest. According to the financing agent, building interest rates for loans with a ten-year fixed interest rate are on average beyond the four percent mark in the third quarter.

In contrast to owner-occupiers, capital investors benefit from the continued rise in rents while property prices are now only rising moderately, which means that the return calculation works even with higher building interest rates.

As current figures from the Association of German Pfandbrief Banks (VDP) show, due to the significant lack of living space, new contract rents for rental apartments continued to rise dynamically - by 3.5 percent compared to the third quarter of 2025. Since the increase in rents was significantly higher than the increase in prices for multi-family houses, according to vdp, returns increased noticeably in the period under review.

Nevertheless, it is also becoming more challenging for investors: “The current conditions on the real estate markets, including the significant increase in financing costs since the beginning of the year, are making real estate investments more difficult overall,” said VDP Managing Director Jens Tolckmitt.

According to Hüttig & Rompf, the required equity remains the biggest hurdle for property buyers. "In the current economic environment, many people find it difficult to save enough. Anyone who wants to buy or build should clarify early on how much equity is available and secure conditions as soon as the property and financing match," says Benjamin Papo, Managing Director of Hüttig & Rompf.

At 26.7 percent, investors are now bringing in almost as much equity as they did a year ago. At the turn of the year from 2025 to 2026, the equity ratio was now well below 25 percent. For owner-occupiers, the value is 30.7, slightly higher than the investor figures.