Joint press release by vdp and vdpResearch: Real estate prices to rise at the beginning of 2026

In the first quarter of 2026, real estate prices in Germany rose by 2.2% compared with the same period a year earlier. This is shown by the real estate price index of the Association of German Pfandbrief Banks (vdp). As in previous quarters, residential real estate recorded a slightly stronger price increase of 2.3% than office and retail properties (1.9% and 1.5% respectively).

Jens Tolckmitt, Chief Executive Officer of the vdp, classified the current developments as follows: “Real estate prices in Germany have once again started 2026 with a moderate tailwind, underpinning the upward trend of the previous year.” However, it remains to be seen whether the current development will continue in the further course of the year. In particular, it is unclear how the Iran war will affect the real estate market. He still finds little reflection in the figures for the 1st quarter.

Adapted index methodology

For the first time, the vdp index development was determined in part on the basis of an adapted methodology that has been developed by the Deutsche Bundesbank together with the vdp subsidiary vdpResearch since 2020. Both organisations are publishing new, comprehensive indices on commercial real estate prices in Germany in parallel today. These new indices are based on the market fluctuation database that already exists for regulatory purposes and draw on vdpResearch’s comprehensive transaction database, which includes real sales cases from more than 700 banks quarter after quarter, as well as on the Central Real Estate Market Database of the Savings Banks Finance Group.

For the Bundesbank’s new commercial real estate price indices, the price developments for multi-family houses, office and retail properties are calculated for various regional definitions and aggregated into a Germany index – which shows an increase of 2.1% for the first quarter of 2026 compared with the same period a year earlier. For apartment buildings, a separate price index for the top 7 cities is also determined. Looking back, the start date is the first quarter of 2013.

“We are pleased that after many years of cooperation with the Deutsche Bundesbank, a new commercial real estate price index has now been created. This index reflects fluctuations quickly and precisely, especially in the more volatile commercial markets,” explained Reiner Lux, Managing Director of vdpResearch.

Residential real estate: Owner-occupied residential property prices up 2.5%

The 2.3% increase in residential property prices in the first quarter of this year was mainly due to the development of owner-occupied residential property: prices for single-family houses and condominiums rose by 2.5% overall. The price of multi-family dwellings rose by 2.2% from January to March of this year compared with the same period a year earlier, which was weaker than in the previous quarters.

Measured by the vdp index for real estate interest rates, yields in rental housing construction increased by 0.8% on an annual basis, which is due to the fact that the price increase for multi-family dwellings was lower than the increase in new contract rents, which increased by 3.0% from the first quarter of 2025 to the first quarter of 2026.

“Even though the momentum of rent growth has currently slowed down somewhat, the situation on the housing market remains very tense. The continuing shortage of housing is causing prices and rents to continue to rise, especially in the metropolises,” says Tolckmitt. He appealed to politicians to consistently implement the regulatory reforms to stimulate the housing market. This would be much more expedient and faster to implement than the considerations for the creation of a new federal housing association.   Especially since the “Alliance for Affordable Housing” and the associations united in the Federal Association of the Real Estate Industry Germany (BID), such as the vdp, have long since submitted corresponding proposals. As an example in the financing sector, he cited the state guarantees for large-scale loans for housing creation anchored in the coalition agreement.

Housing Top 7*: Rents rise less than the national average

In the top 7 cities, residential property price growth averaged 3.6% year-on-year. Among the seven metropolises, the highest price increases for residential properties were recorded in Hamburg (+4.9%). The growth rates were slightly lower in Düsseldorf (+4.1%), Frankfurt am Main and Cologne (+4.0% each) and Munich (+3.5%). This was followed by Berlin (+2.9%) and Stuttgart (+1.7%).

In terms of new contract rents, the top 7 cities recorded a lower growth rate than Germany as a whole (+3.0%) with an average of 2.4%. The range ranged from +3.9% (Hamburg) to +1.3% (Berlin). As in previous quarters, new contract rents in the capital thus rose again at a below-average rate. Measured by the vdp property interest index, yields in the conurbations fell by 1.3% compared with the same quarter a year earlier.

Offices with stronger price increases than retail properties

In the first quarter of this year, the prices of office and retail properties financed by banks also rose year-on-year. For office properties, the price increase was 1.9% compared with the first quarter of 2025. Prices for retail properties rose somewhat less – by 1.5%.

New contract rents for financed office properties also showed a higher increase of 2.8% than for financed retail properties (1.5%) – in each case compared to the same period of the previous year. As a result, office yields, as measured by the vdp property interest rate index, rose by 0.8% year-on-year, while yields on retail properties stagnated in the reporting quarter (0.0%) as price and rent increases ran in parallel.

All index data on the individual vdp real estate price indices are available on both www.pfandbrief.de/vdp-immobilienpreisindex/ and www.vdpresearch.de/leistungen/preisindizes/ , including raw data.

*The rates of change mentioned here in the “Top 7” section were calculated on the basis of the previous vdp index methodology. They thus temporarily differ from the values shown in the Deutsche Bundesbank’s Top 7 Index.