Frankfurt. There is currently no all-clear for those looking for accommodation in Germany. Rents for newly concluded rental agreements rose nationwide by 3.5 percent in the third quarter of 2026 compared to the same period last year. This emerges from the current real estate price index of the Association of German Pfandbrief Banks (VDP), which the association presented on Tuesday.
This means that the upward trend on the German rental apartment market is continuing. Particularly noteworthy: While tenants have to dig deeper and deeper into their pockets for new apartments, the purchase prices for residential properties are now largely stagnating.
Compared to the third quarter of 2025, residential real estate prices nationwide only increased by one percent. Compared to the previous quarter, prices even fell slightly by 0.1 percent.
The development shows how much the rental and purchase markets have now become decoupled from each other. While higher financing costs are slowing demand for home ownership, pressure on the rental housing market remains high. According to the VDP, this is primarily due to the significant lack of available apartments.
“Residential property prices are supported by the ongoing excess demand for living space,” says VDP Managing Director Jens Tolckmitt. This excess demand is even more noticeable on the rental market.
Hamburg tops the list of rent increases
The situation on the German housing market, especially in the metropolises, is getting worse, says Tolckmitt. But rent increases can no longer be easily enforced, especially in already expensive cities.
In Berlin, Düsseldorf, Frankfurt, Hamburg, Cologne, Munich and Stuttgart, new contract rents increased by an average of three percent in the third quarter compared to the same quarter of the previous year - and thus lower than the national average.
But development varies significantly regionally. The increase was strongest in Hamburg.
There, rents for new contracts rose by 4.1 percent within a year. At the other end of the scale is Stuttgart with an increase of just 1.4 percent.
However, the fact that rents in major cities are rising somewhat more slowly on average than nationwide does not mean that the market is easing. The rent level in many large cities is already well above the national average.
The figures refer to newly concluded rental agreements. Existing tenants are not directly affected by the increases reported.
Several reasons lead to a decoupling of the rental and purchase markets
According to experts, the different developments in rents and purchase prices have several causes. In their opinion, the decisive factor is the ongoing housing shortage. Particularly in economically strong metropolitan areas, demand significantly exceeds the available supply.
At the same time, the increased financing costs are making it more difficult to build new properties and purchase them. Many households who originally wanted to buy a condominium or house are therefore staying on the rental market for longer. According to estimates, this is likely to further intensify competition for available apartments.
However, the increased building interest rates significantly slowed price dynamics on the purchase market, even in the seven largest German real estate metropolises. Residential real estate in Berlin, Düsseldorf, Frankfurt, Hamburg, Cologne, Munich and Stuttgart rose in price by an average of 1.4 percent in the third quarter of 2026 compared to the same period last year, slightly more than the national average.
But there are significant differences between the cities: Hamburg recorded the strongest price increase at 2.4 percent, followed by Frankfurt at 1.6 percent and Cologne at 1.4 percent. In Stuttgart, however, purchase prices were already 0.5 percent below the previous year's level.
A trend reversal becomes even clearer when looking at short-term developments. Compared to the second quarter of 2026, purchase prices have fallen in all seven metropolises. The declines ranged from 0.4 percent in Düsseldorf to 0.9 percent in Stuttgart. This means that the interim recovery in real estate prices has stalled for the time being.
The development could open up new negotiating scope for prospective buyers. However, given the continued positive annual rates of change, there can be no talk of a sustained trend reversal towards significantly falling property prices.
