Real estate market 2026: The middle is coming under pressure, luxury and smaller tickets remain in demand

However, this does not mean that price expectations can be enforced regardless of the market. Buyers have also become more selective in the premium segment. Inflated asking prices lead to longer marketing times, while realistically priced properties find buyers. "The stock normalizes as soon as the property is correctly priced," says Peters. "The decisive factor today is to determine the actual market value very precisely. In some cases, sellers are still guided by the maximum prices of previous years. Those days are over in many segments."

The energetic condition of a property has a particularly strong impact on the purchase decision. Today, buyers no longer calculate with the purchase price alone, but take into account necessary investments in heating, insulation, windows and other energy-related measures when financing. Accordingly, these costs are directly included in the price negotiation. "A house with a considerable need to catch up in terms of energy is valued completely differently today than it was a few years ago," explains Schulze. "Buyers calculate very precisely. If high six-figure sums have to be invested after the purchase, this must be reflected in the purchase price."

For owners who want to sell in the foreseeable future and whose property is not in the upper luxury segment, it can therefore make sense to adjust their price expectations to the changed market conditions at an early stage. Waiting for a quick return to previous price levels is associated with risks.

In addition, there is the further development of financing costs. Schulze does not expect buyers to be relieved in the short term by significantly more favourable financing conditions. On the contrary: "We have to expect that interest rates can rise again. Anyone who is counting on the situation to be resolved solely through cheaper financing should be careful." Especially in the mid-price segment, the monthly burden is now more decisive for which property a buyer can afford. Rising financing costs thus also limit the scope for purchase prices.

Even the recent increase in the number of building permits is not yet a signal for a fundamental easing of the housing market, according to Sotheby's International Realty. "Of course, every additional building permit is initially positive. But you must not forget what level we are coming from," Schulze explains. "If the starting point is close to zero, percentage increases quickly look impressive. The decisive factor is how many apartments are actually built and completed." High construction costs, financing costs and numerous insolvencies continue to weigh on the industry. Germany therefore needs not only more permits, but above all more housing construction that has actually been realized.

At the same time, the more demanding market situation is changing the requirements for marketing. The more special and high-quality a property is, the more important it is to have a realistic valuation, to specifically address suitable buyers and to have access to a supra-regional or international network. "A lot can be sold in a rising market. In a differentiated market, on the other hand, it becomes clear how important specialisation is," says Peters. "Sellers of high-quality real estate today are very consciously looking for partners who know their segment, reach the right buyers and also have international access to potential buyers. A strong and globally known brand like Sotheby's International Realty creates additional trust."

Schulze and Peters therefore do not expect a uniform development of the German residential real estate market in the coming months. Rather, the spread is likely to continue. Existing properties with weak energy efficiency and properties with excessively high asking prices remain under pressure. Lower purchase prices and high-quality properties in very good locations, on the other hand, can continue to develop comparatively stably. "There is no single real estate market at the moment," the two summarize. "Location, quality, energetic condition and, above all, the price are decisive. If these factors fit together, real estate will also find its buyers in this market."