Savills examined the German residential investment market in the fourth quarter of 2025 and came to the following conclusion:
According to Savills, the transaction volume in residential real estate* amounted to just under €8.1 billion in 2025, a decline of 23% compared to the same period last year. In the last twelve months, Savills has registered just over 150 transactions, an increase of 13% compared to the previous 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, commented on the market as follows: "As expected, the residential investment market gained momentum in the final quarter. However, the transaction volume fell short of expectations and the previous year, as numerous processes are still dragging on into the new year. In addition, large portfolio transactions were less frequent and some sales processes did not complete due to different price expectations between buyers and sellers. The market has become more fragmented overall – but by no means less active. It is striking how broad the spectrum of functioning transactions has become. We have seen transactions in 2025 ranging from new construction projects to value-add properties, which have worked in both A-cities, second- and third-tier cities, as well as in the suburbs. Solid existing properties and new buildings are particularly easy to place. In terms of price, we expect values to remain largely stable for the time being. This is supported by the slower growth momentum in many cities and slower rising rents, as well as the fact that interest rates have even risen slightly again. On the positive side, more and more investors are accepting the new price level. This contributed to the increasing number of sales processes over the course of the year. In addition, more and more attractive products are coming onto the market again that fit the purchasing profiles of many buyers. Despite the positive signals, the market is only gradually gaining momentum, as less equity has been available for new real estate investments since the interest rate turnaround. Another point is that many transactions are dragging on because equity and debt investors continue to act cautiously. Accordingly, some of the sales processes started in 2025 will not be finalized until 2026, which, however, speaks for a dynamic start to the new year."
