According to analyses by DIP partner Aengevelt Immobilien, the house price index of the Federal Statistical Office has now risen for six quarters in a row. Previously, prices for residential real estate were still on a downward trajectory between the fourth quarter of 2022 and the second quarter of 2024. However, the year-on-year increase of 1.4% in the first quarter of 2026 was relatively moderate. In addition, prices for single-family houses and condominiums vary from region to region.
According to analyses by Aengevelt, the recent price increase is not solely due to the development of interest rates for mortgage loans. This is because interest rate increases usually have a dampening effect on real estate prices because investors demand higher yields and numerous owner-occupiers are confronted with financing bottlenecks. At the end of 2022, the price declines for residential real estate could still be explained by the fact that interest rates for construction loans rose from around 1.3% to around 4.0% over the course of the year. The decline in interest rates to around 3.4% at the end of 2023 was only reflected in house prices with a time lag of around twelve months. The price increase that has been observed since the fourth quarter of 2022, on the other hand, took place even though interest rates have since risen again from around 3.3% to around 3.9%.
Aengevelt draws the conclusion that the connection between interest rates and real estate prices has loosened. Due to the markedly longer decision-making, planning and implementation processes, the observed time delays between interest rate and price changes occur. In addition, prices depend on the respective local supply and competition situation.
This is confirmed by the regionally different developments in the house price index:
- In the first quarter of 2026, the highest year-on-year price increase of 3.6% was recorded for condominiums in sparsely populated rural districts, where supply is relatively scarce and manageable.
- In the more densely populated rural districts, on the other hand, prices fell slightly by 0.4%.
- In the Big Seven, the price increase was lower at 0.3%, while prices rose by 2.9% in the other cities not attached to an administrative district.
- The price trend for detached and semi-detached houses was also mixed: in the sparsely populated rural districts, which recorded the highest price increase for condominiums, prices for detached and semi-detached houses fell by 0.8%, while they rose by 1.4% in the TOP 7 metropolises and by 1.2% in the other large cities not attached to an administrative district.
Dr. Wulff Aengevelt, Managing Partner Aengevelt Immobilien: “Although we have observed that prices for residential real estate have been rising continuously nationwide for one and a half years, it can also be said that the regional supply situation is becoming more important for price formation compared to the development of interest rates for mortgage loans. This also means that local politics clearly has the opportunity and public welfare obligation to have a dampening effect on the house price level and thus also on rent levels by even more consistently designating needs-based building land and also by waiving additional cost-driving requirements. In addition, the public sector at all hierarchical levels is also in a position and socially obligated to increase the correspondingly (too) scarce supply from its holdings in a socially acceptable manner in a socially acceptable manner, especially in regions with chronic housing shortages, by selling land and buildings that are no longer needed in the medium term.”
