The German property market continued to see moderate price increases in the second quarter of 2025, reports the immowelt property portal. Asking prices for existing residential properties rose by an average of 0.8 per cent across Germany between April and June, somewhat more slowly than in the first quarter (+1.2 per cent). Prices for owner-occupied flats increased by 1.1 per cent to 3,193 euros per square metre, while prices for detached houses rose by 0.3 per cent to 2,780 euros. Despite the latest increases, current asking prices for residential property are still an average of 6.7 per cent below their all-time high of June 2022. These are the findings of the new edition of the immowelt Price Compass for the second quarter of 2025. It analysed how asking prices for owner-occupied flats and detached houses have changed across Germany and in the 15 largest German cities with more than 500,000 inhabitants.
“Despite the slight rise in prices, the current market environment continues to offer buyers a very good window of opportunity,” says immowelt Managing Director Dr Robert Wagner. “Competition in the market is nowhere near as strong as it was during the boom years, and sellers are more willing to negotiate. Buyers today have considerably more scope in price negotiations than they did a few years ago.”
Flat prices rise in 12 of the 15 largest cities
Asking prices for owner-occupied flats recorded predominantly moderate increases in Germany’s largest cities. The price per square metre for existing flats rose most sharply in Bremen (+4.1 per cent to 3,145 euros) and Dresden (+3.1 per cent to 2,744 euros). Thanks to their comparatively low price levels, both cities remain attractive to buyers.
In the high-priced metropolitan areas, by contrast, price rises were more subdued. Existing flats in Munich became 1.3 per cent more expensive at 8,235 euros per square metre, while those in Berlin rose by 1.6 per cent to 4,856 euros. Both cities therefore recorded slightly higher growth rates than in the previous quarter. In Hamburg (+1.2 per cent to 5,936 euros) and Frankfurt (+1.8 per cent to 5,681 euros), however, price growth slowed compared with the first quarter.
While flat prices rose in many places, they fell in some cities, a sign that the market has not yet stabilised across the board. Asking prices declined in Duisburg (-3.9 per cent), Dortmund (-1.0 per cent) and Stuttgart (-0.6 per cent).
Detached houses become more expensive in 7 of 15 cities
Overall, prices for detached houses developed more weakly in the second quarter than those for owner-occupied flats: 7 of the 15 cities recorded increases. Duisburg saw the strongest rise (+2.7 per cent to 2,698 euros), followed by Bremen (+2.5 per cent to 2,760 euros). Asking prices for existing houses in Berlin rose by 1.7 per cent to 4,532 euros per square metre after having fallen at the start of the year. In other cities, however, the market moved sideways or recorded declines: after an increase in the first quarter, Frankfurt slipped into negative territory, falling by 2.1 per cent to 4,766 euros. House prices in Munich remained virtually stable, down 0.1 per cent to 9,456 euros, following a sharp rise in the first quarter.
Lending rises despite difficult interest-rate environment
Alongside price trends, financing conditions also play a central role for property buyers. Mortgage rates have been trending upwards again this year and recently settled between 3.5 and 3.6 per cent. Despite these conditions, the market has proved surprisingly robust so far: lending has been rising again since 2024 and is currently growing at a rate similar to the previous year. If this trend continues, the volume could return to the pre-crisis level of 2021 within the next six months. Many prospective buyers have evidently adjusted to the new financing environment or have sufficient equity. In addition, the prices actually paid by buyers are often lower than the asking prices. As a result, the property market is becoming increasingly active.