German House Prices Rose Just 0.6% in the Second Quarter as City and Country Pulled Apart

German home prices rose 0.6% year on year in the second quarter of 2026. Flats in large cities gained 2.0% while flats in rural districts fell 1.8%.

German residential property prices rose 0.6% in the second quarter of 2026 against the same quarter a year earlier, and 0.3% against the first quarter, the federal statistics office said in a release dated 24 September. The national average hides a market pulling apart: flats in large cities outside the seven biggest metropolises gained 2.0% over the year, while flats in densely settled rural districts lost 1.8%.

The seven biggest cities have stopped leading

Across Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart and Duesseldorf, flat prices stood 0.4% below their level of a year earlier and 0.5% below the previous quarter. One- and two-family houses in the same seven cities were 0.7% higher over the year but 0.6% lower over the quarter. That combination describes a market where the annual gain was banked early and has since been handed back month by month.

The gains moved to the second tier

Large cities outside the top seven produced the strongest annual result in the release: flats up 2.0% and houses up 0.7%, with both segments positive over the quarter as well, at 0.5% and 0.9%. Densely settled rural districts delivered the single largest quarterly move of any category, houses up 2.5%, alongside the largest annual gain for houses at 1.0%. Flats in those same districts went the other way, down 1.8% over the year and 1.3% over the quarter. In sparsely settled rural districts both segments were negative over twelve months, flats by 0.6% and houses by 0.4%, yet the quarter split them sharply: flats fell 1.4% while houses rose 1.9%.

A revision that halves the recovery

The office also revised the first quarter of 2026 down by 0.2 percentage points, from 1.4% to 1.2% year on year. Measured against the corrected figure, the annual rate has halved in a single quarter, from 1.2% to 0.6%. The index is built from purchase prices actually recorded by the local valuation committees, which is why it appears about twelve weeks after the quarter it describes, and why it can diverge from the asking-price series that listing portals publish within days.

What the market looks like underneath

Asking prices for existing flats across Germany average about 3,066 dollars per square metre, against asking rents of roughly 10.40 dollars per square metre a month. That is a gross rental yield near 4.07%, or 3.08% once a standardised 24.35% effective tax on non-resident rental income is applied. The ten-year record remains clearly positive at 42.7%, but the five-year figure is negative at 0.8%, leaving the market marginally below where it stood five years ago. Buying costs are among the heaviest in Europe at roughly 12.3% of the purchase price, which a 0.6% annual gain takes twenty years to cover.

Sources: Statistisches Bundesamt (Destatis), Preise fuer Wohnimmobilien im 2. Quartal 2026, Pressemitteilung Nr. 336, 24 September 2026 https://www.destatis.de/DE/Presse/Pressemitteilungen/2026/09/PD26_336_61262.html; Statistisches Bundesamt (Destatis), Prices of residential property in the second quarter of 2026, English press release PE26_336_61262, 24 September 2026 https://www.destatis.de/EN/Press/2026/09/PE26_336_61262.html

Market data: Germany