The first quarter of 2025 confirms the high attractiveness of the German residential property market for national and international capital and shows that the market is stabilising. However, as the largest rental market in the EU, it is subject to strict regulation, which is also linked to political objectives. Certain changes had already become apparent before the early federal elections in February 2025 – for example, tighter regulations were expected with regard to the so-called rent cap and the temporary letting of residential space.
This report, produced in collaboration with CMS, provides an overview of market developments in the first quarter of 2025 and guides players in the German residential investment market in detail through the most important legal changes from the coalition agreement between the CDU/CSU and SPD for the 21st legislative period:
- Tenancy law – changes to the rent cap, index-linked rent and furnished and temporary lettings
- Extension and amendments to the so-called conversion ban
- Changes to the municipal right of first refusal
- Plans for subsidisation measures
- Reform of the German Buildings Energy Act
