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Prices for residential real estate in Germany rose significantly in the first quarter of 2025, particularly in several major cities. Despite ongoing economic and monetary policy uncertainties, the market for apartments, single-family homes, and multi-family homes is gaining momentum.
These insights are based on the latest update of the German Real Estate Index (GREIX), a joint project of the local expert committees (Gutachterausschüsse für Grundstückswerte (GAAs)), ECONtribute, and the Kiel Institute for the World Economy. The transaction databases of the GAAs, which contain notarized sales prices, are analyzed according to the latest scientific standards. All data for currently 21 cities and regions including their neighborhoods are freely available at www.greix.de. The Kreis Mettmann is a new addition.
Compared to the previous quarter (Q1 2025 to Q4 2024), apartment prices increased by 1.0 percent. Prices for single-family homes stagnated, with a minimal increase of 0.1 percent. Multi-family homes are 1.1 percent more expensive. However, due to the low number of transactions in this segment, there is a high degree of volatility, which limits the informational value.
Adjusted for inflation, the price changes deviate only minimally downwards because the inflation rate in the first quarter of 2025 was very low.
A comparison with the same quarter of the previous year (Q1 2025 to Q1 2024) clearly shows the strength of the recent price growth—despite the rise in mortgage rates at the start of the year and concerns about a global recession. Apartment prices increased by 3.2 percent year-over-year. The increase for single-family homes was as high as 4.7 percent, while multi-family homes rose by 8.7 percent. These year-over-year figures represent the highest price growth since mid-2022. The number of transactions is also almost a third higher than in the same period last year.
“The wait-and-see approach has come to an end,” says Jonas Zdrzalek, real estate market expert at the Kiel Institute for the World Economy (Kiel Institute)/https://www.ifw-kiel.de/experts/jonas-zdrzalek/. “Those who want to buy have obviously come to terms with the new circumstances—and are speculating that the real estate market has bottomed out for the time being.”
Significant price increases in almost all cities
Property prices rose across the board in Germany's eight largest cities. Compared to the previous quarter (Q1 2025 to Q4 2024), apartment prices rose the most in Cologne (+3.4 percent). In Stuttgart (+2.1 percent) and Berlin (+1.7 percent), apartments also became noticeably more expensive. The housing markets in Düsseldorf (+1.3 percent), Frankfurt (+0.7 percent), and Leipzig (+0.6 percent) recorded moderate increases in sales prices. No transaction data is yet available for Hamburg and Munich for the first quarter of 2025.
Outside of the top 8 cities, prices also rose almost everywhere compared to the previous quarter. This was particularly evident in Karlsruhe with an increase of 3.8 percent and in Duisburg with an increase of 3.2 percent. There was a slight fall in prices in Dresden (minus 0.9 percent)—although prices there had already risen sharply in the previous quarters.
Recovery strongest in major cities
Compared to their lowest levels, the recovery is strongest in the major cities. In Leipzig, apartment prices were already about 9 percent higher in the first quarter; in Cologne, around 8 percent higher. Almost all other major cities also experienced a stronger recovery than the average of the 21 cities and regions included in GREIX.
Overall, apartment prices were, on average, only about 10 percent below their all-time highs. “Whether the price increases will continue at the same pace depends on the economic and monetary policy environment,” says Zdrzalek. “But for buyers, the current market situation may feel like a good opportunity to enter the market.”
Read full report now: "Despite uncertain times: House prices are rising significantly" (https://www.ifw-kiel.de/publications/greix-q1-2025-despite-uncertain-times-house...)
Methodological note
The GREIX is a price index based on a hedonic regression method. This method mitigates price distortions that often arise when using average price per square meter. For instance, if a high number of large apartments in a prime location are sold in a given year, this can inflate average prices per square meter. However, such fluctuations may not reflect a general increase in real estate values. Using hedonic regression methods, specific property characteristics do not cause upward or downward distortions in the price trend.
About the GREIX:
What is the GREIX?
The GREIX is a real estate price index for Germany based on the sales price collection of the local expert committees, which contains notarized sales prices. It tracks the price development of individual cities and neighborhoods back to 1960 and is based on more than two million transaction data. The dataset can be used to analyze long-term trends in the real estate markets and to place current developments in a historical context.
What data and methods are used to create the indices?
The data collection and evaluation take place in cooperation with the local expert committees. All real estate transactions are recorded in full. The price development is calculated according to the latest scientific standards and statistical methods (hedonic regression method). The GREIX thus stands for the highest scientific data quality.
Who finances the GREIX?
GREIX is financed by public funding and is a project of the Bonn-Cologne Cluster of Excellence ECONtribute, which is funded by the DFG, and the Kiel Institute for the World Economy, in cooperation with the local expert committees. Its aim is to increase price transparency in the real estate market. Different price indices for 20 cities and regions are freely accessible at www.greix.de. Additional cities will gradually be added to the data set.
Media Contact:
Mathias Rauck
Chief Communications Officer
T +49 431 8814-411
mathias.rauck@ifw-kiel.de
Kiel Institute for the World Economy
Kiellinie 66 | 24105 Kiel | Germany
Chausseestraße 111 | 10115 Berlin | Germany
T +49 431 8814-1
E info@ifw-kiel.de
www.ifw-kiel.de
Jonas Zdrzalek
Kiel Institute Researcher
T +49 160 982 72 770
jonas.zdrzalek@ifw-kiel.de
Price development major cities and GREIX
Kiel Institute for the World Economy
Price development market segments
Kiel Institute for the World Economy
Price increase in major cities since bottom
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