German property prices stall in Q3 as rents climb 3.5% and office prices fall 3.9%

Residential prices flat, offices losing ground

The index of the Verband deutscher Pfandbriefbanken (vdp), published on Tuesday, 10 November 2026, shows German property prices up only 0.2% in the third quarter compared with a year earlier. Measured against the spring, prices actually fell by 0.2%. The sectors moved in different directions: residential property rose 1.0% year on year, helped by owner-occupied homes at 1.4%, while office prices dropped 3.9%. Retail property prices were stable over the same period.

Overall property index0.2%

Residential property prices1%

Owner-occupied homes1.4%

Office property prices-3.9%

New rental contracts3.5%

Overall property index

0.2 %

Residential property prices

1 %

Owner-occupied homes

1.4 %

Office property prices

-3.9 %

New rental contracts

3.5 %

Data from the article text

Vdp chief executive Jens Tolckmitt linked the office slump to a difficult environment, citing higher financing costs, weak economic activity and the shift toward home working as the main drags on demand. For housing, he pointed to continued excess demand as the factor propping up prices.

“Residential property prices are being supported by the persistent excess demand for housing.”

Rents climb faster than purchase prices

Rents on new rental contracts rose 3.5% year on year in the third quarter, up from the 3.2% the vdp had recorded in the second quarter. The divergence between rents and purchase prices reflects a shortage of available flats, especially in economically strong urban areas where demand clearly exceeds supply. According to experts, higher financing costs make building and buying harder, so many households that wanted to buy stay in the rental market for longer. That adds to the competition for each available flat. The figures cover new contracts only, so existing tenants are not directly affected by the increases.

Hamburg leads, Stuttgart lags

In the seven metropolitan areas covered (Berlin, Düsseldorf, Frankfurt, Hamburg, Cologne, Munich and Stuttgart), new-contract rents rose 3% on average, below the national rate. Hamburg topped the list at 4.1%, while Stuttgart recorded the smallest increase at 1.4%. Residential prices followed a different pattern: Hamburg rose 2.4% year on year, Frankfurt 1.6% and Cologne 1.4%, while Stuttgart saw small declines. Compared with the second quarter, prices fell slightly in all seven metropolitan areas as well as across the country.

Hamburg2.4%

Frankfurt1.6%

Cologne1.4%

Hamburg

2.4 %

Frankfurt

1.6 %

Cologne

1.4 %

Data from the article text

Financing costs and the policy debate

Interest rates on ten-year property loans have moved above the 4% mark, which weighs on buyers and builders alike. Tolckmitt welcomed federal government plans, including the Bau-Turbo and the Gebäudetyp E, aimed at making construction faster and cheaper. He sharply criticised proposals discussed in Berlin coalition talks between Die Linke, the Greens and the SPD to socialise housing stocks, calling them extremely harmful. He argued that the debate alone already holds back investment and property financing. Estimates put the shortfall of homes in Germany at more than one million flats.

“Germany needs more housing, reliable financing conditions and investment security, not ideological experiments at the expense of people looking for homes.”