According to Colliers International’s October 2025 report, transaction volume in Germany’s residential real estate market reached €42.5 billion in 2024, marking a 29 % increase year-on-year. The rise in investment activity occurred despite a decline in new housing construction, as the number of completed units fell 14 % compared with the previous year. 

Colliers estimates a housing shortage of approximately 955,000 units in Germany by 2030, primarily in the affordable and public housing segments. The imbalance stems from high construction costs, elevated interest rates, and lengthy permitting procedures. The most affected regions are Bavaria, Baden-Württemberg, and North Rhine-Westphalia. 

In 2024, institutional investors accounted for 63 % of total transaction volume, with foreign capital representing around 40 % of this amount. The most active international investors came from Switzerland, the United Kingdom, and Canada. The average deal size declined by 8 % year-on-year to €56 million, reflecting a shift toward smaller transactions. 

The rental housing sector remained dominant, attracting €14.8 billion, or 35 % of total investment volume. Average rental prices increased 3.1 % year-on-year, reaching €13.6/m² in Berlin, €14.8/m² in Munich, and €12.2/m² in Frankfurt. 

The number of newly built housing units dropped to 245,000 in 2024, concentrated mainly in cities with populations above 500,000. In the affordable housing segment (rents below €8/m²), new completions accounted for less than 8 % of total construction. 

Colliers notes that credit availability and state housing support measures will remain the key drivers of investment activity in 2025. The firm forecasts a gradual rise in transaction volumes during 2025–2026, alongside a persistent shortage of new supply. The total market volume could reach €46–48 billion by the end of 2026. 

Commentary from M24 Investment Division: 

The Colliers report highlights a steady recovery in Germany’s residential investment market. With transaction volume rising to €42.5 billion in 2024, the sector faces a structural supply deficit driven by declining construction output and higher building costs. The 2025–2026 outlook anticipates continued investment growth, but sustained housing shortages, particularly in major urban centers.