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Experts See German Home Prices and Rents Rising in 2026

A persistent construction shortfall keeps pressure on a market already strained by strong demand.

Overview

  • Economists and market intermediaries forecast a moderate nationwide increase in purchase prices next year, around 3–4% overall and potentially more in major cities.
  • Rents accelerated in 2025, rising about 4% nationally and up to 8% in large urban areas, with little sign of near-term relief.
  • The IW projects roughly 235,000 housing completions this year and about 215,000 in 2026, far below estimated annual needs near 320,000 after only about 252,000 were finished in 2024.
  • Mortgage rates have stabilized near 3.7% and are expected around 3.5–4.0% in early 2026, while elevated construction costs continue to limit new building.
  • Demand is buoyed by more single-person households, sustained net migration, rising real wages, and inheritance-funded equity, with some experts urging lower property transfer taxes to ease access to ownership.