Savills examined the German residential investment market in the first quarter of 2026. Enclosed you will find the results:
In the 1st quarter of 2026, the transaction volume with residential real estate amounted to around 1.6 billion euros*, according to Savills. Compared to the same period last year, the transaction volume fell by 16%. In Q1 2026, Savills registered just under 50 transactions, an increase of 9% year-on-year. Compared to the 10-year average, however, there is a decrease of 36%. The prime yield remained stable at 3.6% and thus also corresponded to the previous year's figure.
Marco Högl, Director and Head of Residential Capital Markets at Savills in Germany, comments on the market as follows:
"The residential investment market has made a stable start to 2026 and the number of transactions was above the average since the interest rate turnaround. This shows that the market is active, but currently predominantly fragmented. Sentiment among market participants has not yet deteriorated despite geopolitical uncertainties and increased financing costs. The structural undersupply of the German housing market strengthens the fundamental investment arguments and keeps the market attractive internationally.
In addition to the still dominant domestic investors, European and North American investors are increasingly getting involved. The capital base has recently broadened. Value-add investors continue to be very active, while at the same time more capital is flowing into core and core-plus products.
This supports demand for new buildings and solid portfolios. Meanwhile, the first revival effects are evident in the new construction segment: the number of permits is rising, and project developers are once again appearing more frequently as land buyers. However, further political impetus would be needed for a significant expansion of construction activity. The shortage of supply on the housing market will therefore continue in many places in the medium term, so that the prospects for sustainable value development and high demand on the user market remain. We are also seeing that more owners are opting for structured marketing processes again. For the year as a whole, we expect a transaction volume roughly at the previous year's level, provided that there is no prolonged period of high inflation. Overall, political risks – such as the expropriation debate in Berlin – are currently weighted higher by some investors than inflation and interest rate risks."
Additional graphics and data can be found in our online dashboard on the real estate investment market.
* Savills has raised the threshold of market reporting from 50 to
20 % for the first quarter.20 residential units and adjusted the market data accordingly retroactively.
