Residential investment market remains stable, but investors are becoming more cautious – tightening of tenancy law is the biggest risk

"The index shows that market participants have become more cautious, but they are not losing confidence in the residential investment market," says Jürgen Michael Schick.

Around 73 percent of those surveyed rate the current investment opportunities as neutral to positive. Almost a third even classify the situation as good or very good. At the same time, the proportion of negative assessments has risen to just under 28 percent.

Expectations for price developments are also more cautious. While in autumn 2025 more than 80 percent still expected prices to remain stable or rise, the figure is currently just under 58 percent. Around 42 percent now expect purchase prices to fall slightly or sharply. Nevertheless, the results do not speak for a renewed price decline, but rather for a more conservative market valuation in the face of increasing uncertainties.

Long-term portfolio management remains the preferred strategy of investors. Around 71 percent of those surveyed continue to rely on the long-term preservation of their properties. At the same time, around 42 percent are planning new acquisitions in the next twelve months, while about one in five market participants is considering sales.

The results show a market without selling pressure. Many owners concentrate on the management and further development of their portfolios and almost every second person is considering new purchases. "Investors are thinking long-term. Residential real estate remains a value investment that offers stability even in challenging market phases," says Jürgen Michael Schick.

From the investors' point of view, politics remains the biggest factor of uncertainty. Around 82 percent of those surveyed cite possible further tightening of tenancy law as the greatest risk for the residential investment market. This means that concerns about regulatory intervention remain at a historically high level.

The importance of macroeconomic risks has risen particularly significantly. Around 64 percent of those surveyed see rising interest rates or persistently high inflation as a key risk. In the previous barometer, this figure was still around 38 percent. Concerns about further price declines, on the other hand, play only a subordinate role at around 14 percent.

"Investors are currently being challenged from two sides: political uncertainty and concerns about rising financing costs. The market itself is robust, but the framework conditions remain challenging," says Jürgen Michael Schick.

Large cities remain the most important target markets for residential investors. Around 63 percent of those surveyed would buy there in the next twelve months. The surrounding areas of the metropolises as well as B and C cities also remain in demand and are each named as attractive investment locations by around 40 percent of market participants. Despite the ongoing discussions about socialization and further regulation, Berlin continues to be one of the preferred residential investment locations. A slight majority of those surveyed nationwide rate the capital as attractive or very attractive. At the same time, the political debates are weighing on investor confidence: around 58 percent cite the political framework as a decisive factor influencing their assessment of the Berlin market, and more than half point to concerns about socialization.

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