Berlin Hyp and CBRE: Housing Market Report Berlin 2026: Rental price dynamics are slowing down, purchase prices for condominiums are rising slightly again - housing shortage remains

• Asking rents almost stable at an average of €15.80/m²
• Asking prices for condominiums rise slightly – prices for apartment buildings stagnate
• Large rental housing construction projects, especially outside the S-Bahn ring and in the Berlin area
• Supply of rental apartments remains at a low level

Following the enormous dynamics of asking rents (new contract rents) with double-digit rent increases in some cases in previous years - over 18 percent from 2022 to 2023 and around 16 percent from 2023 to 2024 - the Berlin housing market is stabilized at a high level in terms of asking rents in 2025. Compared to 2024, these have risen only minimally by 0.1 percent to an average of 15.80 euros per square meter. Among the seven most populous cities in Germany, the capital thus occupies fourth place behind Munich (22.60 euros), Frankfurt am Main (17.20 euros) and Stuttgart (15.87 euros). The persistently high demand for housing combined with continued insufficient new construction activity is clearly reflected in the very low rate of market-active vacancy in multi-storey residential construction. In Berlin, this was only 0.3 percent in 2024 (2025 survey) – as in the previous year – and has thus fallen by a total of 0.4 percentage points since 2018. However, a balanced housing market can only be said to exist with a vacancy rate of two to three percent. The federal capital is thus on a par with Hamburg and Stuttgart. The situation is even more tense in Munich and Frankfurt, where the market-active vacancy rate is only 0.1 percent each.

These are the key findings of the Berlin 2026 Residential Market Report, which was jointly published by the real estate financier Berlin Hyp and the global real estate service provider CBRE. For 2025, around 40,000 rental offers, around 33,900 purchase price offers for condominiums and apartment buildings and 214 new construction projects with around 44,890 apartments in Berlin were evaluated.

"After the extreme swings of previous years, we see a stabilization of asking rents in 2025, while the market for condominiums is cautiously recovering – structurally, however, the enormous housing shortage in Berlin remains," says Michael Schlatterer, Managing Director at CBRE in Germany. He continues: "In addition, we are observing more and more often that, especially in sought-after residential areas, such as Prenzlauer Berg, normal rental apartments are hardly offered on the supply portals anymore, but more and more furnished apartments or temporary housing dominate the offers."

"In order to relieve the tight housing market and limit growing social tensions, Berlin urgently needs additional apartments. Berlin's Faster Building Act, the Federal Government's construction turbo and building type E are important and correct milestones. Furthermore, it is crucial to consistently streamline over-regulated processes and reduce bureaucracy. However, it will still take some time for these measures to become noticeably accepted by the market," says Sascha Klaus, CEO of Berlin Hyp.

After the significant increases in previous years, asking rents were largely stable in 2025. While the average rent across Berlin increased only slightly, the upper market segment even declined: Here, the median fell by 2.9 percent to 28.57 euros per square meter. One reason for this is the lower number of completed new residential buildings by private developers, which usually determines the upper market segment. In the segment of privately financed new construction, there was a decline in the average asking rent of three percent to 20.73 euros per square meter. The lower market segment, which is usually publicly subsidized, was stable with a plus of 0.4 percent at 7.06 euros per square meter.

The main reason for the sharp increases in asking rents for new leases in recent years is the significant excess demand and the lack of available housing. This is clearly shown by the negative correlation between rent developments and vacancy rates (Figure 1).

The central driver of the housing shortage is the city's population growth, which is generally positive: According to the population register, the number of inhabitants has risen by more than half a million since 2010 and is now around 3.9 million people. This corresponds to an increase of almost 16 percent and thus also a considerable increase in the number of private households.

On the other hand, there is too little new residential construction: in the same period, only around 159,000 new apartments were built, and a further 27,000 units were completed or replaced in the portfolio. This construction activity is far from sufficient to keep pace with the dynamic population development.

The current population forecast for the period from 2024 to 2040, published at the end of 2025 by the Berlin Senate Department for Urban Development, Building and Housing, assumes a further population increase of 2.8 percent - this corresponds to further growth of more than 100,000 people. A year earlier, the new urban development plan Housing 2040 for the capital already stated a need for 222,000 additional apartments and the need to provide space for a further 50,000 units.

The large gap between existing and new contract rents affects not only new tenants but also young households and families with offspring, but the search for a small and barrier-free apartment is also difficult for older people, which also explains the very low willingness to move ("lock-in effect") and the associated extremely low fluctuation. A change of apartment is often associated with a significant increase in the monthly absolute rent burden, even if there is a desire to reduce the living space. As a result, apartments come back on the market even less frequently and the supply continues to become scarcer.

After slight declines due to the rise in interest rates and the associated reluctance on the part of buyers in previous years, asking prices for condominiums rose moderately again in 2025. Across all market segments, prices rose by two percent to an average of 5,813 euros per square meter. Price increases were recorded in both the upper and lower market segments. While the upper segment grew by 0.3 percent, the increase in the lower segment was more significant at 2.9 percent. Nevertheless, prices have not yet quite returned to pre-crisis levels and the previous high of 2022.

In contrast to the market for condominiums, asking prices for apartment buildings fell again in 2025 – by 2.4 percent compared to 2024 to an average of 2,967 euros per square meter.

One of the decisive factors for this was the fact that an increasing number of properties of lower quality were offered to the public in the portfolio and at the same time very few new-build properties came onto the market. It can be observed that although the private buyers' market has found its way back on track, there is still a certain reluctance to buy on the part of institutional investors.

The cautious optimism of institutional investors from 2024 received a slight damper last year. In 2025, portfolio transactions with a volume of around 2 billion euros were traded in Berlin. In the case of existing portfolios as well as in project developments and property development measures, the institutional transaction volume was around a third lower than in the previous year. In contrast, private buyers continue to be in the best buying mood when it comes to small-scale purchases – predominantly individual rental residential or apartment buildings with a low proportion of commercial use.

Once again, almost half of the transactions in terms of volume are forward deals (approx. 0.9 billion euros), mostly associated with forward funding. Joint venture constellations with a regional property developer and an international investor are becoming more and more common. The state-owned housing associations continue to be by far the most important buyers of residential construction projects.

For 2026, the question remains as to whether and when institutional investors' interest in the crisis-proof and profitable residential real estate asset class will increasingly materialise again in transactions.

According to its own research, 214 construction projects with around 44,890 apartments were in concrete planning, development or already in the construction phase in 2025 – a slight increase compared to the previous year with 43,530 units recorded and thus reaching the level of 2022, after a significant cut in new construction activity became visible, especially in 2024.

In the meantime, only 12.7 percent of new apartments are being built within the S-Bahn ring, and construction activity is increasingly shifting to the outskirts of the city. "The proportion has been declining for years, as greater new construction potential in inner-city locations has largely been exhausted," says Schlatterer. Despite challenging conditions, the number of projects involving the seven state-owned housing associations rose slightly to 84 (2024: 68). On average, each project comprises around 210 apartments.

"Above all, the state-owned housing associations make an important contribution to the necessary new construction, increasingly also through the purchase of projects by private developers or through cooperation with them. In order to ease the housing market, every new apartment counts," Sascha Klaus welcomes the initiatives.

In the Berlin area, too, the demand for housing remains high due to continuing population growth and migration gains due to pressure from the capital. For the sixth time in a row, the report therefore analyzes the individual surrounding districts in detail. Prices for detached and semi-detached houses developed inconsistently: in many municipalities they fell again in view of the economic uncertainties, in others they have already risen again.

The "Faster Building Act" in Berlin, the "construction turbo" of the federal government and building type E are important measures to speed up the construction process and reduce costs. In the medium to long term, these measures can increase supply, but in the short term the relief remains limited.

At the same time, the political risks are increasing: With the discontent about the housing shortage and rising rents, the discussion about a possible socialization of housing stocks in an election year is becoming more acute and relevant. In order to shed light on the topic from its legal side, Dr. Christian Schede has his say as an interview partner in this year's Housing Market Report.

Fig. 1: Correlation between rising rents and falling vacancy rate

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