Germany Residential Real Estate Market Size (2024 - 2029)

The market size of the Germany Residential Real Estate sector is projected to grow significantly in the near future, despite a pause in its expansion in 2022 due to various factors such as rising interest rates and high levels of uncertainty. The market had seen a decade of consistent growth in rental and purchase prices, but geopolitical factors and economic impacts began to slow it down. The market also faced challenges such as high energy costs, building expenses, and supply constraints. Government regulations and initiatives, such as the "rent brake" and the promotion of energy-efficient homes, are also shaping the market's future trajectory. Despite these hurdles, the sector is expected to continue its growth, albeit at a potentially slower pace.

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Market Size of Germany Residential Real Estate Industry

Germany Residential Real Estate Market Summary
Study Period 2020 - 2029
Base Year For Estimation 2023
Market Size (2024) USD 372.77 Billion
Market Size (2029) USD 499.84 Billion
CAGR (2024 - 2029) > 3.06 %
Market Concentration Medium

Major Players

Germany Residential Real Estate Market Major Players

*Disclaimer: Major Players sorted in no particular order
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Germany Residential Real Estate Market Analysis

The Germany Residential Real Estate Market size is estimated at USD 372.77 billion in 2024, and is expected to reach USD 499.84 billion by 2029, growing at a CAGR of greater than 3.06% during the forecast period (2024-2029).

The sale of residential property in Germany amounted to around EUR 3.7 billion (USD 4 billion) in the first half of 2023. This represented a decrease of 53% compared to the same period of the previous year and, at the same time, the lowest turnover in the first half of the year since 2011. In the year so far, there have been four transactions with volumes of more than a quarter of a billion euros each. These transactions accounted for 62% of the volume. However, according to the experts, about three-quarters of the sales were below EUR 50 million (USD 54 million).

However, several new building sales have been made public over the last few weeks and months, with multipliers exceeding 25 to 27 times annual rentals. Due to such benchmark transactions, the players have more certainty about the potential first yields in buying or selling.

The vacancy rate is already low in many cities and may worsen. Experts indicate that the number of completed units will be around 200,000 in a few years. The federal government has set a new construction target of only half that amount.

The timing may be suitable for owners willing to sell, while a favorable window of opportunity opens for long-term investors wanting to enter the market. The presence of equity investors in the market who stabilize prices, particularly for smaller and medium-sized properties, may favor early sales instead of waiting and observing. However, prices could fall again when this capital is used.

Germany Residential Real Estate Industry Segmentation

Residential real estate refers to land and any buildings for residential purposes. The most common type of residential real estate is single-family dwellings. A complete background analysis of the German residential real estate market, including the assessment of the economy and contribution of sectors in the economy, market overview, market size estimation for key segments, and emerging trends in the market segments, market dynamics, and geographical trends, and COVID-19 impact, is covered in the report.

The German residential real estate market is segmented by type (villas, landed houses, condominiums, and apartments) and key cities (Berlin, Hamburg, Cologne, Munich, and the Rest of Germany). The report offers market size and forecasts for all the above segments in value (USD).

By Type
Villas and Landed Houses
Condominiums and Apartments
By Key Cities
Berlin
Hamburg
Cologne
Munich
Rest of Germany

Germany Residential Real Estate Market Size Summary

The German Residential Real Estate Market is projected to experience significant growth in the coming years. This growth is attributed to a variety of factors, including the continuous increase in rental and purchase prices, strong demand, and rising construction activities. However, the market has faced some challenges, such as high energy costs, energy supply constraints, increasing building expenses, and future uncertainty, which have restrained progress. The market has also been impacted by geopolitical factors, including the Ukraine War and inflation. Despite these challenges, the market is expected to continue expanding due to the government's efforts to promote the construction of new, energy-efficient structures. The market is characterized by strong demand and rising construction activities, despite a decrease in the number of new residential permits issued. The high costs of construction materials and poor financing circumstances are anticipated to remain the primary factors in the fall of building projects. However, structural changes, such as demographic effects, are also perceived as important drivers of demand. The non-residential segment's performance has remained modest due to decreasing business investment in commercial, retail, and office buildings. Despite these challenges, the prognosis for profit margins is stable now, and price wars are being avoided. However, persistent material shortages and unstable input prices continue to be problems.

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Germany Residential Real Estate Market Size - Table of Contents

  1. 1. MARKET SEGMENTATION

    1. 1.1 By Type

      1. 1.1.1 Villas and Landed Houses

      2. 1.1.2 Condominiums and Apartments

    2. 1.2 By Key Cities

      1. 1.2.1 Berlin

      2. 1.2.2 Hamburg

      3. 1.2.3 Cologne

      4. 1.2.4 Munich

      5. 1.2.5 Rest of Germany

Germany Residential Real Estate Market Size FAQs

The Germany Residential Real Estate Market size is expected to reach USD 372.77 billion in 2024 and grow at a CAGR of greater than 3.06% to reach USD 499.84 billion by 2029.

In 2024, the Germany Residential Real Estate Market size is expected to reach USD 372.77 billion.

Residential Real Estate Market in Germany Report Snapshots

Residential Real Estate Market in Germany Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)