German Property Prices Rise 2.2% in First Quarter, Signalling Recovery
Official data showed German property prices climbed 2.2% year-on-year in the first quarter. After years of declines, the housing market in Europe's largest economy is entering a steady recovery supported by expectations of further rate cuts.
According to data from Germany's Destatis statistics office, the residential property price index rose 2.2% year-on-year and 0.8% quarter-on-quarter in the first quarter of 2026. Apartment prices in major cities are leading the rebound, while recovery in rural regions is more gradual.
The figures show that the European Central Bank's easing cycle, launched in 2025, is supporting housing demand and lifting mortgage applications. At its latest meeting, ECB President Christine Lagarde said further moves remain on the table provided inflation continues to ease.
The construction sector, meanwhile, still faces elevated material costs and squeezed margins. The federal government's new building incentive package is intended to provide additional support to the industry from mid-year. Analysts say the steady rise in prices could become a clear contributor to German GDP growth in the second half of 2026.
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