German Housing Prices Rise Slightly as Market Stabilizes

Following a period of decline, home and apartment prices in Germany increased modestly in 2024, while rental costs surged significantly.

Residential property prices in Germany rose by an average of 1.2% for houses and 1.3% for apartments in 2024, reversing a prior downward trend.
Demand for real estate has grown, partly due to slightly lower interest rates, with banks reporting a 40% year-over-year increase in new mortgage lending in December 2024.
Rental prices climbed sharply, with new contracts for apartments increasing by 4.6% nationwide and 3.9% in major cities, reflecting a tight housing supply.
Prices for multifamily buildings saw the highest growth at 2.9%, driven by renewed interest from large investors.
Experts highlight the urgent need for increased housing construction, including affordable and social housing, as Germany faces a shortfall of approximately 550,000 units.