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Residential real estate prices in major German cities are diverging once again. After prices in central locations declined more sharply in previous years, they increased more significantly in 2025 than prices in the outskirts. These insights are based on the latest update of the German Real Estate Index (GREIX) which provides property price data at the neighborhood level. The GREIX is a joint project of the local expert committees for property values (Gutachterausschüsse für Grundstückswerte (GAAs)) and the Kiel Institute for the World Economy.
The 2025 data indicate a return to the patterns of the previous market cycle (2006–2022). During periods of price increases, downtown areas experience more rapid price growth than peripheral neighborhoods. This reverses the trend of the recent correction phase, when urban centers experienced above-average losses.
"We are observing a trend reversal in 2025. After prices in downtown neighborhoods declined disproportionately during the period of rising interest rates, a counter-movement has emerged. One hypothesis is that residential real estate in central locations is more sensitive to changes in interest rates because of its lower risk profile," says Jonas Zdrzalek, project leader of GREIX at the Kiel Institute for the World Economy.
The price ratio between the city center and the outskirts dropped to approximately 1.25 in 2024 but climbed to 1.27 in 2025. This means that, on average, apartments in central neighborhoods are around 27 percent more expensive than those in non-central areas. For comparison, in 1990, this premium was only five percent, increasing more than fivefold since then.
Stronger growth in downtown neighborhoods—Berlin as an outlier
In cities such as Düsseldorf and Munich, prices in the city centers rose nearly four and over three percentage points higher, respectively, than in the outskirts. However, Berlin is an exception; in 2025, price growth in the outlying neighborhoods was just over one percentage point higher than in the city center.
Significant price differences within cities
The price differences within the "Top 7" cities are substantial, with Berlin leading the list. In the capital, a square meter in central neighborhoods such as Mitte costs more than twice as much as in the most affordable city district, Spandau.
Insights into the major cities
– Cologne & Frankfurt: In Cologne, buyers in the downtown area pay nearly double at approximately EUR 6,000/m² compared to Porz (approx. EUR 3,200/m²). The difference is similarly high in Frankfurt, with a premium of around 85 percent between Westend/Innenstadt (EUR 7,300/m²) and Frankfurt West (EUR 4,000/m²).
– Munich: The Bavarian capital remains in a league of its own when it comes to price. While the price in the most affordable neighborhood, Moosach-Milbertshofen, is approximately EUR 7,500/m², even that is higher than the prices in the most expensive neighborhoods of all other major German cities. Meanwhile, the price in the most expensive neighborhood, Altstadt-Maxvorstadt, is EUR 11,900/m².
– Stuttgart: This city has the most homogeneous price structure. However, the price difference between the most expensive neighborhood, Mitte-Nord (EUR 5,500/m²), and the cheapest, Neckar-Ost (EUR 3,600/m²), is still over 50 percent.
Read complete report now: GREIX Sales Price Index Neighborhoods 2025: Price gaps between central and peripheral neighborhoods are widening again/https://www.kielinstitut.de/publications/greix-sales-price-index-neighborhoods-2...
Methodological note
The GREIX sales price index (https://www.greix.de/) is based on a hedonic regression method. This method mitigates the price distortions that often arise when using the average price per square meter. For example, if a large number of expensive apartments in a desirable location are sold in a given year, this can inflate the average price per square meter. However, these fluctuations may not reflect an overall increase in real estate values. Hedonic regression methods mitigate the impact of specific property characteristics on price trends.
About the GREIX Sales Price Index
What is the German Real Estate Index (GREIX)?
The German Real Estate Index (GREIX) is a publicly funded research project hosted at the Kiel Institute for the World Economy that aims to increase transparency in the German real estate market. To this end, GREIX regularly publishes updates on the development of sales prices (GREIX sales price index) as well as on the development of asking rents (GREIX rental price index). In addition to these price developments, GREIX publishes special analyses, for example on affordability or on price-determining factors such as location or energy efficiency.
What is the GREIX sales price index?
The GREIX sales price index is a real estate price index for Germany based on the sales price collections of the local expert committees, which contain 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. On https://www.greix.de/, sales price indices for various market segments in currently 24 cities are freely available. The dataset will gradually be expanded to include additional cities.
What data and methods are used to create the indices?
Data collection is carried out by the local expert committees, which record all property transactions in full. Sales price analysis is conducted using state-of-the-art scientific methods and statistical techniques (hedonic regression method). The GREIX sales price index therefore represents the highest standard of scientific data quality.
Media Contact:
Friederike McKeague
Communications GREIX
T +49 151 41437895
friederike.mckeague@kielinstitut.de
Kiel Institute for the World Economy
Kiel Office
Kiellinie 66
24105 Kiel
Germany
Berlin Office
Chausseestraße 111
10115 Berlin
Germany
Contact
+49 431 8814-1
www.kielinstitut.de
Dr. Jonas Zdrzalek
Kiel Institute Researcher
jonas.zdrzalek@kielinstitut.de
Steffen Zetzmann
Kiel Institute Researcher
steffen.zetzmann@kielinstitut.de
Dr. Francisco Osswald do Amaral
Kiel Institute Fellow
francisco.amaral@kielinstitut.de
Ratio central/non-central neighborhoods
Copyright: Kiel Institute for the World Economy
Ratio most expensive/cheapest neighborhood
Copyright: Kiel Institute for the World Economy
Neighborhoods Munich vs. Frankfurt a.M.
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Ratio central/non-central neighborhoods
Copyright: Kiel Institute for the World Economy
Ratio most expensive/cheapest neighborhood
Copyright: Kiel Institute for the World Economy
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