Real estate prices in Germany increased by only 2.2 percent in the first quarter of 2026 compared to the previous year, as reported by the Association of German Pfandbrief Banks (VDP) on Monday. In the previous year, the price increase was 3.3 percent, while it stood at 4.0 percent in the fourth quarter of 2025. This development is attributed to rising interest rates, high construction costs, and economic uncertainty.
The VDP has also changed its calculation method and is now using a methodology developed in collaboration with the Bundesbank. This adjustment complicates comparisons with previous data and may influence the interpretation of the current figures. The new index is based on transaction data from more than 700 German banks, including major institutions like Deutsche Bank and Commerzbank.
However, demand for real estate remains, particularly in certain cities where rents and purchase prices are rising more slowly. The VDP's new index provides a comprehensive overview of the current market situation, categorized by residential properties, metropolitan areas, rents, and commercial real estate.
