Colliers' new Housing Market Report 2026/2027 brings together the key developments in the German housing market, from demand and supply to the investment market, in an analysis. A key finding is that while residential construction continues to decline, demand pressure continues, especially in the large cities. Last year, only 206,600 apartments were completed, and Colliers expects a further decline of 10 percent to around 185,000 apartments in 2026. At the same time, the number of households in the 50 largest cities is expected to grow by around 408,400 by 2040. In the residential investment market, the transaction volume rose by 6 percent to 44.6 billion euros in 2025. In 2026, there will still be enough capital available for residential investments, but the price expectations of buyers and sellers are still divergent in many cases.
Demand remains high, residential construction continues to decline
At the end of 2025, around 83.5 million people lived in Germany, 0.1 percent less than in the previous year. The main reason was the significantly lower net immigration. However, this does little to change the long-term demand trends, especially in the metropolises. By 2040, an increase of around 408,400 households is expected for the 50 largest German cities. In the top 7 cities alone, around 291,900 households are to be added. The number of small one- and two-person households is growing at an above-average rate.
Francesca Boucard, Managing Director, Head of Market Intelligence & Foresight at Colliers, says: "The slight decline in population last year should not obscure the fact that the demand for housing in the big cities will remain high in the long term. The development of households is decisive. The growing number of small households in particular is encountering a continuing shortage of housing in the metropolises."
New construction activity continued to decline in 2025. At 206,600 completed apartments, the completion volume was 18 percent below the previous year's figure and at the lowest level in 13 years. A further decline of 10 percent to around 185,000 apartments is expected for 2026. A first positive signal comes from building permits, the number of which rose by 10 percent to 238,500 in 2025 for the first time in years. However, due to the long period between approval and completion, this is likely to be reflected in supply only with a significant delay.
