German asking rents jump 4% in Q2, outpacing inflation as Cologne leads with 7.9% surge

Rental market accelerates

German asking rents rose 4.0% in the second quarter of 2026 compared to the same period a year earlier, according to calculations by the German Economic Institute (IW) in Cologne. The data, provided to Reuters ahead of publication, shows the increase running well ahead of the general inflation rate of around 2.6%, which itself has been pushed higher by energy prices linked to the Iran war. Quarter-on-quarter, asking rents climbed 1.3% from April to June.

The strongest momentum is concentrated in large cities outside the top seven metropolises, where rents rose 4.9% year-on-year. The surrounding areas of those cities also posted a robust 3.9% increase. In the top seven cities (Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart and Düsseldorf), the average increase was a more moderate 2.9%.

The development is currently particularly strong in the large cities outside the biggest metropolises.

City-by-city breakdown

Cologne recorded the sharpest increase among major cities at 7.9%. Hamburg followed at 5.5%, Leipzig at 5.4% and Essen at 5.0%. Dortmund saw rents rise by 4.7%, while Düsseldorf and Munich posted increases of 3.8% and 3.7% respectively. Frankfurt am Main registered a more moderate 2.9% gain. Stuttgart and Berlin lagged significantly behind the average of other cities, with increases of just 0.9% and 1.0%.

Purchase prices edge up

Residential property purchase prices also rose, but only modestly. Condominiums and single- and two-family homes each became 0.8% more expensive nationwide compared to the same quarter a year earlier. Relative to the previous quarter, prices increased by 0.2% and 1.0% respectively.

A new strong price upswing cannot yet be spoken of.

Regional differentiation is increasing. The top seven cities are showing slight price declines, while other large cities and their surrounding areas are recording moderate gains. The annual development in purchase prices ranges from a 5.0% increase in Dortmund to a 1.9% decline in Munich.

Supply dynamics diverge

The supply of properties for sale has risen markedly since the interest rate turnaround. Compared with the first quarter of 2022, nearly twice as many condominiums and around 140% more single- and two-family homes are being advertised nationwide. The IW researchers attribute this primarily to reduced demand and longer marketing times rather than a correspondingly strong increase in the housing stock.

Rental supply, by contrast, remains significantly reduced in many places. Nationwide, the number of listings is still nearly 12% below the level of early 2022, with the shortfall particularly pronounced in many large cities. Berlin is the only exception where visible rental supply exceeds the early 2022 level, though it remains well below the level seen before the market disruptions surrounding the rent cap over the longer term.

The overall picture is a housing market with two distinct bottlenecks: on the purchase market, ample supply meets demand constrained by financing costs; on the rental market, persistently high demand meets a supply that remains tight and highly variable by region.