Real Estate Market Report Germany Q2 2026

7.8.2026

Germany’s real estate market shows early signs of gradual stabilization in Q2 2026 while financing conditions remain demanding. After a brief easing on capital markets, rate uncertainty persists; investors act selectively, prioritizing transparent cash flows and executable business plans. Residential activity broadens, whereas office leasing polarizes: modern ESG‑compliant space in prime locations remains scarce while older stock is under pressure. Early indicators such as rising building permits signal movement but not yet a broad‑based recovery.

Key findings at a glance

Germany’s property market stabilised cautiously in Q2 2026 but remains shaped by interest rate uncertainty and geopolitical risk.

  • Residential investment: Around €3.6–4.4bn was invested in German residential property in H1 2026, slightly below the previous year. The number of deals rose by 20–30%, driven by mid-sized transactions of €15–50m.
  • Yields: Prime residential yields in the Top 7 cities are stable at 3.4–3.6%. Commercial yields are rising for the first time since late 2023, to around 4.5% for offices and 4.6% for logistics.
  • Financing: Ten-year mortgage rates ranged between 3.55% and 3.98% in H1. Financing conditions remain demanding but functional.
  • Building permits: From January to April 2026, 83,700 homes were approved, up 13.2% year on year. This is an early indicator, not yet a broad recovery in new construction.
  • Policy: The EH-55 subsidy has been extended to the end of 2026, and the reform of the Federal Building Code is due to take effect on 1 January 2027.
  • Top 7 office market: Take-up of 1.3m sqm was around 6–7% below the previous year, and vacancy reached 9.2%, the highest level since 2007. Berlin and Munich grew strongly, while Frankfurt fell by 57%.
  • Berlin: Office take-up rose by around 49–63%, with prime rents reaching up to €50/sqm. Commercial investment volume, by contrast, fell to around €633m.

Which segments offer resilient entry points now?

How will rents, yields and approvals evolve next?

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