- Residential property transaction volume in H1 2025 at €3.86 billion
- 26 per cent above the previous year's figure
- 3.80 per cent prime yield – slightly down on the previous quarter
Cushman & Wakefield, a global real estate consultancy, recorded a transaction volume of €3.86 billion on the German residential real estate market in the first half of 2025, representing an increase of 26 per cent compared to the same period last year. Although the transaction volume in the second quarter of 2025 fell by 20 per cent to €1.7 billion compared to the previous quarter, the slowdown in market momentum has not dampened enthusiasm. Investor interest is growing and many market participants are becoming increasingly active.
Jan-Bastian Knod, Head of Residential Investment Germany at Cushman & Wakefield, comments: ‘The strong start to the year and the significant increase in the first half of the year compared with the previous two years confirm the market stabilisation signalled by a further 10 basis point decline in prime yields. Demand for residential investments continues to grow, both from foreign and domestic capital.’
Focus on portfolio transactions, individual transactions also strong
In the second quarter of 2025, portfolio transactions totalling €1.04 billion were concluded, accounting for 61 per cent of the total transaction volume of €1.7 billion in the second quarter. The focus was particularly on supra-regional portfolios, which accounted for around €991 million.
Domestic investors remain dominant in the German residential market, although their share of transaction volume declined slightly in the first half of 2025 compared with the previous year (from 71 per cent to 67 per cent).
However, a separate analysis of the second quarter of 2025 shows that international investors, with €828 million, have almost matched the €880 million (51.3%) invested by German investors. ‘This confirms the trend of continued high allocations by national investors, but at the same time shows that more and more international capital is finding its way into the market,’ comments Knod.
Price stabilisation largely complete
At the beginning of the year, there was talk of a presumed market stabilisation. Cushman & Wakefield is now seeing signs of slightly falling yields in the commercial residential investment market. This confirms that the market has stabilised, the transaction market is gaining momentum and prices are picking up again. For this reason, Cushman & Wakefield expects yields to continue to fall slightly in the coming months.
Student residences and micro-living: high demand with low transaction volume
At around €40 million, the transaction volume for student housing and micro-apartments remains very low. In the first half of the year, the total volume amounted to €83 million. Restrained construction activity and the associated low product availability are slowing down this still promising market. ‘Demand for alternative forms of living is higher than ever, and existing properties and project development in structurally strong cities and regions are increasingly in demand,’ emphasises Knod.
Jan-Bastian Knod concludes: ‘The strong first half of the year confirms the positive mood and the continuing upward trend in the transaction market. The sustained market stability is fuelling the high level of interest in residential properties, including from institutional investors. With the decline in prime yields, the market is sending a clear signal about where the journey will take us. Large-volume transactions in particular will continue to dominate the market in the second half of the year.’