For the 50th consecutive year, bulwiengesa presents its real estate index, which analyses the development of real estate prices and rents in Germany since 1975. After difficult previous years, the index shows a recovery for 2025 with a nominal increase of 1.8%. Nevertheless, the industry remains characterised by cautious restraint: high construction costs, low completion figures and hesitant investment decisions continue to define a fragile market environment.

The results for 2025 at a glance:

• Overall index: +1.8% (previous year: +0.8%)
• Residential sub-index: +2.3% (previous year: +1.0%)
• Commercial sub-index: +0.4% (previous year: +0.2%)

After the growth phase of the housing market was interrupted in 2023, the sub-index exceeded the inflation rate again in 2025 with an increase of 2.3%. The main drivers are rents: rents for new buildings rose by 3.7% and rents for existing buildings by 2.6%. Prices for terraced houses (+2.7%) and new-build condominiums (+2.0%) also rose in tandem, while building land prices largely stagnated at +1.1%. André Adami, Head of Residential Property, estimates: "We have reached the low point in construction starts. However, we do not expect completion figures to rise again until 2027." The commercial segment presents a mixed picture. While traditional office structures are under pressure, modern spaces are benefiting from tenants' focus on quality. The logistics sector is also stabilising at a high level. Oliver Rohr, Head of Commercial and Office Real Estate: "Although space turnover in the office sector is declining slightly, we are seeing a 1.9% increase in office rents, driven by a clear 'flight to quality' in central locations. While the volume of new construction is steadily declining, conversions to commercial apartments and hotels are on the rise. In the logistics sector, we are seeing robust development with a 1.1% increase in commercial properties, fuelled by new drivers such as the defence industry and data centres."

Retail continues to lag in the commercial index, though the downward pressure isn't as severe as in previous years. Prime rents in top-tier locations declined an average of 1.5%, while secondary and neighborhood locations held relatively steady, slipping just 0.8%. Dr. Joseph Frechen, Head of Retail, explains: "The divide in brick-and-mortar retail is widening. Food-focused specialist retailers remain attractive to investors, but for large-scale urban shopping centers, it all comes down to quality and proactive vacancy management. As consumer spending stays cautious, retail locations in city centers will face continued headwinds throughout 2026." A notable focus of this year's report is real value development. Despite a slower broad market recovery, nearly all segments are showing tentative gains. Office properties are leading the way—bolstered by rising prime rents—while retail valuations, though still declining, are stabilizing. Residential properties are the real standout, benefiting from widespread rent increases and finally returning to positive value growth.

For the current year, bulwiengesa forecasts continued stabilisation of the property markets with an inflation rate of around 2%. As only around 185,000 new homes are being built, which is still too few, rents in conurbations are expected to rise further. The bulwiengesa real estate index analyses real estate market developments in Germany based on 49 western German cities since 1975 and 125 German cities since 1990. The results of the bulwiengesa real estate index are based on bulwiengesa's extensive data collection for the preparation of location and market analyses. This database is supplemented annually by targeted empirical surveys, on-site interviews and newspaper analyses and published in the RIWIS database. The bulwiengesa real estate index is calculated and updated annually on the basis of this data. The nine sub-markets are weighted equally in the calculation of the index. In addition to the overall index, a sub-index is provided for both the residential and commercial property markets.

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