Market Outlook: Is 2025/2026 a Good Time to Buy Property in Germany?

After years of overheating, the German property market cooled down significantly in 2023 and 2024. Now, as we look at 2025/2026, the question on everyone's mind is: Have we reached the bottom, and is now the perfect window to enter the market?

1. Interest Rates vs. Prices

While the era of 1% interest rates is gone, rates have stabilized around 3.5% - 4%. In response, property prices in major cities have corrected downwards by 5-10% from their peak. This correction seems to be slowing down, suggesting that waiting for further massive drops might be a gamble.

2. The Supply Shortage

The fundamental driver remains: Germany has a massive housing shortage. New construction has stalled due to high material costs. This lack of supply ensures that property values—especially in B-locations and commuter belts—will likely rise again in the medium term. Buying now allows you to negotiate prices that were non-negotiable two years ago.