Apartment and house prices continue to rise: 3.8% in the first quarter of 2025!

Apartment and house prices continue to rise: 3.8% in the first quarter of 2025!

In the first quarter of 2025, the price of apartments and houses in Germany rose again. According to data from the Federal Statistical Office The cost of residential real estate rose by a whopping 3.8 percent compared to the same quarter last year. This development can be seen in most regions of Germany, with sparsely populated rural districts being an exception. Some price reductions could be observed here.

In the seven largest cities in Germany, including Berlin, Hamburg and Munich, the price increase was also recorded at 3.8 percent. In other major cities the increase was even higher, at 6.1 percent. In contrast, more rural regions reported an increase in housing prices of 4.1 percent, while single- and two-family houses in these areas only became more expensive by 2.5 percent. For apartments in rural, less densely populated districts, however, there was a decline of 0.8 percent.

Price indices as indicators

The construction price index, often erroneously referred to as the construction cost index, is a central indicator of price developments in the construction industry. The differences between these indices should not be underestimated the Federal Statistical Office emphasized. While the construction price index reflects the producer sales prices, the construction cost index shows the development of prices without sales tax for production factors for new buildings.

In recent years, official statistics have greatly expanded the range of price indices for residential properties. Various indicators are used to paint a comprehensive picture of the market. Collaboration with the Deutsche Bundesbank, which publishes data on price developments, plays a crucial role here. These price indices are important not only for general market observation, but also for macroeconomic analyzes and the evaluation of financial stability in Germany, such as Bundesbank explained.

Construction prices as a driver

The prices for construction services on residential buildings and the associated indices are no less significant. These indices help to analyze and evaluate the price development for new buildings and maintenance measures. The Federal Statistical Office also offers a fine breakdown into specific construction services, which makes the development of construction costs more transparent for investors and builders.

Despite the ongoing price increases in urban locations and the mixed developments in rural areas, it remains to be seen how the real estate market in Germany will develop in the coming quarters. Many future buyers and investors are keeping a close eye on these trends because they could make a good deal or discover one or two attractive bargain prices.

The real estate industry will remain interesting in the future because the demand for living space remains high. Real estate valuation and sales will continue to be a central part of the economy, and interest in price indices to help make the right decisions is likely to increase.