BNP Paribas Real Estate publishes figures on the housing market in over 100 cities
In 2025, the increase in asking rents continued in almost all independent cities in Germany, in some cases with double-digit growth rates. The high rent dynamics are therefore not only reflected in the top ‑locations, but increasingly also in the breadth of the market. The main reasons for this are the continued insufficient supply of housing, the continuing weakness of new residential construction activity and continued high demand. Against this background, it can be assumed that the upward pressure on rents will also be short. ‑ and will remain in place in the medium term. The analysis of BNP Paribas Real Estate combines a well-founded classification of the rental housing markets with an up-to-date evaluation of the markets for condominiums (condominiums) in the top cities. It offers institutional investors reliable guidance on the development of the investment and rental markets nationwide and in eleven top cities – supplemented by key market figures and fact sheets for over 100 cities.
The German rental housing market remained highly dynamic in 2025. In almost all city categories and market segments, asking rents have once again risen significantly. The drivers of this development are a continuing shortage of supply, persistently high demand as well as structural conditions such as high construction costs and, as a consequence, a continued low level of construction completions. In the existing segment, asking rents rose compared to 2024 in the A cities as well as in university and medium-sized cities by around 4% each, while large cities showed above-average dynamism at 6%. A-cities remain the most expensive housing markets with an average asking rent of €15.75/m², followed by university towns with €12.30/m². The short-term development is particularly striking in cities in the second and third tiers, which have recently recorded strong growth rates due to their lower rent levels to date.
In the new construction segment, too, the high rent momentum continued across the board in 2025. While rents for new buildings in Class A cities rose by an average of 6%, university cities showed the strongest momentum with a plus of 9%. In the seven largest German cities, the median asking rent for new buildings is currently €20.90/m² on average. Munich remains the most expensive new construction location at €24.85/m², followed by Hamburg and Düsseldorf. In Düsseldorf, Hamburg and Stuttgart, rents have recently been particularly dynamic: average rents for new buildings rose between 10% and 20% compared to 2024. “For investors, the current market phase offers a rare combination of high rental price visibility and supply shortages. Those who secure high-quality assets in good micro-locations today are positioning their portfolio for resilient cash flow and sustainable earnings growth,” says Christoph Meszelinsky, Managing Director and Head of Residential Investment at BNP Paribas Real Estate GmbH.
ETW market: Comparison of supply and transaction data shows growing price differences
In addition to the rental housing market, the condominium market is also increasingly being monitored via online supply portals. For a long time, the prices called up there (especially for new-build condominiums) were considered a reliable indicator of actual market activity. However, the current analysis by BNP Paribas Real Estate shows that since the interest rate turnaround, asking prices have been less reliable in reflecting the purchase prices actually achieved – especially in markets where the pricing phase has not yet been completed. The analysis is based on a systematic comparison of offer and transaction data from the appraisal committees in Berlin, Düsseldorf, Frankfurt, Hamburg, Cologne and Stuttgart. Up to and including 2021, offer and transaction prices were almost identical. The deviations were mostly between minus 1 and plus 1% – an expression of the strong sellers’ market and the high demand pressure. With the rise in interest rates, this picture changed fundamentally. Since 2022, the actual purchase prices have been on average 3% to 5% below the asking prices. Buyers are more rigorous and account for higher financing costs, while sellers are gradually adjusting their price expectations. “Negotiations are back and again an integral part of the purchase process,” says Christoph Meszelinsky. “We are seeing a normalization after an extraordinary boom phase. Today, the market is less driven by speed and more by calculation, comparability and negotiation.”
Regionally, the differences between offer and transaction prices are currently considerable in some cases. The gap is particularly pronounced in Berlin, where asking prices were around 18% higher than transaction prices in 2025. In the capital, pricing has not yet been completed. The gap between asking price and conclusion is larger here than in any other A-city. At locations such as Frankfurt, Hamburg and Cologne, the deviations are significantly smaller. Along with the interest rate turnaround, the number of sales has plummeted. Between 2021 and 2023, the number of new apartments sold fell by 69%. Although the market has stabilized recently, it remains below the long-term average. The analysis also shows that the recovery in sales prices is proceeding at different speeds: While transaction prices in Berlin and Frankfurt are still below their previous highs, Düsseldorf, Cologne and Stuttgart have already set new price records in 2025. “The recent price stabilization is not only demand-driven, but also the result of significantly increased construction costs,” says Christoph Meszelinsky.
Prospects
“Despite an expected but delayed recovery in construction activity, the gap in new construction remains in view of rising population figures and structurally high demand. The upward pressure on rents is thus continuing, especially in new construction. Supply shortages are meeting robust demand and stable demographic trends. In this environment, high-quality rental apartment investments offer reliable, predictable cash flows. For investors, this underlines the attractiveness of the segment. Low fluctuation, limited new supply and a stable demand foundation support earnings even in a more volatile macroeconomic environment,” says Christoph Meszelinsky, summarizing the outlook.
