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German Home Prices Rebound as Berlin Extends Rent Brake and Minister Seeks Tougher Rules

New transaction data point to a 2025 upturn concentrated in major cities.

Overview

  • Transaction-based figures from the Pfandbriefbanken association show Q3 residential prices up 3.8% year over year, with a 4.6% rise in the top cities; new-contract rents climbed 3.7% nationally and 3.8% in metropolitan areas.
  • Berlin extended its rent brake through 2029 and prolonged the conversion ban to 2030, and will deploy 12 trainee government inspectors to bolster enforcement via the Senate’s rent-check office.
  • Mecklenburg-Vorpommern renewed the rent brake in Rostock and Greifswald to September 2028 and advanced a plan to designate eight coastal tourist towns as tight markets, with a state ordinance expected to take effect in 2026.
  • Federal Building Minister Verena Hubertz signaled action against rent gouging, proposing tougher rules for furnished rentals and index-linked leases as a rental-law expert commission develops recommendations.
  • Hubertz endorsed a surcharge on higher earners living in social housing, based on Hesse’s Fehlbelegungsabgabe, and cited roughly €50 billion in combined federal–state funding for social housing through 2029.