Transaction volumes for German residential property in the first quarter of 2026 totalled approximately €1.6bn according to Savills*. This represents a decline of 16% compared with the corresponding period last year. The international real estate advisor recorded 50 transactions between January and March, representing an increase of 9% year on year. However, this total remains 36% below the 10-year average. The prime yield remained stable at 3.6%, unchanged from last year.

Marco Högl, Director and Head of Residential Capital Markets, Savills in Germany, says: "The German residential investment market has had a stable start to 2026 and the number of transactions is above the average since the reversal in interest rate policy. The geopolitical uncertainties and increased financing costs have not dampened the mood among investors to date.” 

According to Savills, the chronic undersupply of housing in Germany supports the fundamental investment arguments and the attractiveness of the market internationally. Besides domestic investors, who remain dominant, European and North American investors are increasingly active. Therefore, the capital base has recently expanded, with value-add investors remaining highly active while, at the same time, more capital is once again flowing into core and core-plus product. This is sustaining demand for new build and good quality existing stock.

Marco adds:  “There are first signs of revitalisation in the new build segment: building permits are on the rise and developers are buying sites again. However, further political impetus is necessary before there can be a significant increase in construction activity. Hence, the supply shortage in the residential market will continue in the medium term, underpinning sustainable capital growth prospects and high demand in the occupier market.” 


* From the first quarter, Savills has lowered the threshold for market reporting from the previous 50 to 20 residential units and adjusted market data retrospectively accordingly.

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