Following a 1.8 % rise in 2024, German property prices increased by 4.0 % in 2025, according to the real‑estate‑price index of the Association of German Mortgage Credit Banks (VDP). The index reached 185.6 points by the end of 2025, showing price gains in every quarter-most recently 1.0 % from Q3 to Q4.
The stronger jump in the index was driven primarily by residential prices rather than commercial ones. Compared with the final quarter of 2024, residential property prices gained 4.2 %, while commercial property prices-comprised of office and retail locations-rose 3.5 %. In Q4 2025, both residential and commercial prices increased at roughly the same pace (1.0 % and 0.9 %, respectively).
Since 2010, quarterly data are collected on the entire German market for residential, office and retail properties, based on actual financing transactions from over 700 banks. The data show a clear trend: the 4.2 % jump in residential prices is largely due to multipurpose apartment buildings, which rose 5.3 % compared with the same period last year. New‑home ownership (single‑family houses and condominiums) grew at a slower 3.0 %.
A persistent shortage of housing also saw rents for new leases in apartment buildings climb 3.5 % from Q4 2024. However, rental growth lagged behind price increases, causing yields-measured by the property‑interest‑rate index-to fall by 1.7 % on an annual basis.
In the “Top 7” cities (Berlin, Düsseldorf, Frankfurt, Hamburg, Cologne, Munich, and Stuttgart), residential prices grew 4.7 % on average in Q4 2025, slightly above the national average. Berlin and Hamburg had the lowest increases at 2.2 %, while Frankfurt experienced the strongest growth at 5.7 %. Rent increases in these cities averaged 3.5 %, matching the national pace. Rent rises varied from +2.0 % in Stuttgart to +5.0 % in Frankfurt. Yields in the metropolitan regions fell by an average of 1.4 % compared with the same period last year.
Commercial properties financed by banks rose 3.5 % over the year and 0.9 % quarterly, largely due to office price gains. Office prices increased 3.9 % from Q4 2024 and 1.1 % from the preceding quarter. Retail prices grew more modestly, 2.3 % and 0.6 % respectively.
New‑lease rents for office properties grew 3.3 % from Q4 2024, outpacing those for retail locations, which rose 1.8 %. Yield movements were similar across sectors: office rents experienced a 0.6 % decline in yields, while retail properties saw a 0.5 % reduction.