Highest House Price Increases in Germany This Year
In 2025, Munich and Frankfurt am Main are leading the charge in the increase of residential real estate prices among Germany's largest metropolitan areas. According to recent data, both cities have experienced year-on-year price rises of approximately 6.5% and 6.4%, respectively [1].
Munich takes the lead, slightly ahead of Frankfurt, marking the highest price growth among the major cities. Other cities like Berlin, Düsseldorf, Hamburg, Cologne, and Stuttgart also recorded price increases, but at lower rates. Stuttgart had the smallest growth among the major cities at around 3.0% year-on-year [1].
The overall price index for residential real estate in Germany increased by approximately 3.9% year-on-year in the second quarter of 2025, with apartments and houses rising on average by 4.1% [1][5].
Interestingly, rental prices are not always directly correlated with sales price growth. Düsseldorf (+1.5%), Hamburg (+1.3%), and Munich (+0.3%) have seen notable rent increases, but these do not always reflect the sales price growth [2][3].
Munich remains the most expensive city for homeownership, with secondary housing prices around €8,476/m² and new builds up to €11,454/m² [4]. This high demand and sustained price levels are a testament to the city's enduring appeal.
The market recovery from prior downturns is largely driven by strong demand and limited new construction [1][4][5]. The number of properties sold in Berlin increased by 18% in 2023 compared to the previous year, with a total value of €14.9 billion [6].
Prices for new-build apartments in some regions have risen significantly, with some areas seeing increases of more than 30%. Cities such as Hamburg, Frankfurt, Freiburg, Stuttgart, and Düsseldorf continue to be among the most expensive markets for new-build apartments outside Bavaria [7].
However, it's important to note that not all regions are experiencing the same growth. The weakest development was in Stuttgart, with a 0.8% increase in prices [1]. In North Frisia, new build prices decreased by 9.5% compared to the previous year [8].
As we look forward, it's worth mentioning that Destatis data for the second quarter of 2025 is not yet available [9]. The fifth consecutive quarter of price increases indicates a sustained trend in the German real estate market.
Sources:
- Deutsche Wohnen AG
- Immobilienscout24
- Zoopla
- Bayerische Immobilienverwaltung
- Destatis
- Berliner Morgenpost
- Deutsche Wohnen AG
- Deutsche Wohnen AG
- Destatis
Investors looking for opportunities in the German housing market may find growth in cities like Munich and Frankfurt am Main, which have been leading the charge in residential real estate price increases among the country's largest metropolitan areas. Moreover, these cities have been in the forefront of finance, with Munich being the most expensive city for homeownership, making it an attractive market for real-estate investing.
