Rents in Germany continued to increase in all seven major cities in 2024. The average rent per square meter in Munich was approximately **** euros — the highest in the country. Conversely, Düsseldorf had the most affordable rent, at approximately **** euros per square meter. But how does renting compare to buying? According to the house price to rent ratio, house prices in Germany have risen faster than rents, making renting more affordable than buying. Affordability of housing in Germany In 2023, Germany was among the European countries with a relatively high house price to income ratio in Europe. The indicator compares the affordability of housing across OECD countries and is calculated as the nominal house prices divided by nominal disposable income per head, with 2015 chosen as a base year. Between 2012 and 2022, property prices in the country rose much faster than income, with the house price to income index peaking at *** index points at the beginning of 2022. Slower house price growth in the following years has led to the index declining, as incomes catch up. Nevertheless, homebuyers in 2024 faced significantly higher mortgage interest rates, contributing to a higher final cost. How much does buying a property in Germany cost? Just as with renting, Munich was the most expensive city for newly built apartments. In 2024, the cost per square meter in Munich was almost ***** euros pricier than in the runner-up city, Frankfurt. Detached and semi-detached houses are usually more expensive. The price gap between Munich and the second most expensive city, Stuttgart, was nearly ***** euros per square meter.

This statistic shows the average rent for apartments in Munich districts in Germany as of September 2017, by apartment size. Schwabing West apartments were the most expensive to rent in general with apartments over *** square meters costing on average 3166 euros per month. The only exception was apartments that were 100 square meters with Alstadt - Lehel costing on average 2701 euros per month as of September 2017.

The prime rent for office real estate in Munich, Germany, significantly increased between 2013 and 2024. The prime rent reached *** euros per square meter per year at the end of 2024, the highest value recorded for this period. While not the most expensive European office market, Munich was the city with one of the lowest office vacancy rates.

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In 2024, the rental index in Germany reached 107.5 index points. The index was set to 100 in 2020, which means that compared to then, rent in Germany increased by 7.5 percent. Munich saw the highest average rent price among the larger German cities.

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The Germany Office Real Estate Market is poised for robust expansion, with an estimated market size of approximately €150,000 million in 2025. This dynamic sector is projected to grow at a Compound Annual Growth Rate (CAGR) of 5.60% through 2033, indicating sustained momentum and significant investment opportunities. Key drivers underpinning this growth include a burgeoning tech and startup ecosystem, particularly in major hubs like Berlin and Munich, which are attracting global talent and necessitating modern, flexible office spaces. Furthermore, the increasing demand for sustainable and ESG-compliant buildings is reshaping development strategies, with a focus on energy efficiency, smart technologies, and occupant well-being. The German economy's overall stability and its central role in the European Union continue to foster investor confidence, making its office real estate a sought-after asset class. The market is also witnessing a trend towards hybrid work models, influencing office design and the demand for amenity-rich, collaborative spaces that enhance employee productivity and engagement. The competitive landscape features a mix of established global players and strong domestic entities, including Cushman & Wakefield, JLL, CBRE, Knight Frank, STRABAG, and BAUER Group, all actively involved in transactions, development, and asset management across Germany's key cities. While the major metropolitan areas like Berlin, Hamburg, Munich, and Cologne represent core demand centers, a growing secondary market is emerging in other cities, driven by decentralization efforts and competitive rental rates. However, the market is not without its restraints. Rising construction costs, evolving regulatory frameworks concerning sustainability, and potential economic headwinds or shifts in global investment patterns could pose challenges. Nevertheless, the inherent resilience of the German economy, coupled with strategic investments in innovation and infrastructure, is expected to largely mitigate these risks, ensuring a positive trajectory for the office real estate sector in the coming years. Key drivers for this market are: Increasing geriatric population, Growing cases of chronic disease among senior citizens. Potential restraints include: High cost of elderly care services, Lack of skilled staff. Notable trends are: Prime Rents Continue to Rise Due to Rental Adjustment Clauses in Leases.

This statistic shows the average rent for apartments in Berlin, Frankfurt, and Munich in Germany as of 2016, by apartment size. It showed that an apartment of *** square meters was priced at ***** euros per month in Munich, which was significantly more than the same sized apartment costing ***** euros per month in Berlin.

The average rent price of residential real estate in Germany was approximately two euros higher for newly built properties than existing ones in 2023. Rents have increased steadily since 2004 and in the fourth quarter of 2023, the average square meter rent for a newly constructed property reached **** euros. The rent for existing housing was slightly lower at *** euros per square meter. Among the major cities in Germany, Munich had the highest rents.

In 2023, Frankfurt and Munich were the German cities with the highest prime rents for office real estate, but Berlin had the highest average rent. In Munich, the prime office rent amounted to ** euros per square meter, while the average rent was twice lower, at ***** euros per square meter. Prime rents refer to the top price segment in the market, usually buildings in the most desired locations and of the highest specifications.

One of the main factors driving high rents across European cities is the same as any other consumer-driven business. If demand outweighs supply, prices will inflate. The drive for high paid professionals to be located centrally in prime locations, mixed with the low levels of available space, high land, and construction costs, all keep rental prices increasing. Renting in European cities In 2025, Munich was the most expensive city to rent a furnished studio among the 23 cities surveyed. At ***** euros per month, renting a studio in Munich cost nearly twice the price of a studio in Athens. For one-bedroom apartments or a furnished private room, the most expensive city was Amsterdam. Homeownership in Europe In many European countries owning your home is more commonplace than renting – for instance, in Romania, the homeownership rate is over ** percent. In the UK, affordability of housing is one of the leading housing concerns, with the majority of adults agreeing that first-time buyers getting on a property ladder is a very or somewhat serious problem.

Amsterdam is set to maintain its position as Europe's most expensive city for apartment rentals in 2025, with median costs reaching 2,500 euros per month for a furnished unit. This figure is double the rent in Prague and significantly higher than other major European capitals like Paris, Berlin, and Madrid. The stark difference in rental costs across European cities reflects broader economic trends, housing policies, and the complex interplay between supply and demand in urban centers. Factors driving rental costs across Europe The disparity in rental prices across European cities can be attributed to various factors. In countries like Switzerland, Germany, and Austria, a higher proportion of the population lives in rental housing. This trend contributes to increased demand and potentially higher living costs in these nations. Conversely, many Eastern and Southern European countries have homeownership rates exceeding 90 percent, which may help keep rental prices lower in those regions. Housing affordability and market dynamics The relationship between housing prices and rental rates varies significantly across Europe. As of 2024, countries like Turkey, Iceland, Portugal, and Hungary had the highest house price to rent ratio indices. This indicates a widening gap between property values and rental costs since 2015. The affordability of homeownership versus renting differs greatly among European nations, with some countries experiencing rapid increases in property values that outpace rental growth. These market dynamics influence rental costs and contribute to the diverse rental landscape observed across European cities.

The overall average cost of logistic space per square meter per month increased slightly across Germany between 2014 and 2023. Munich had the highest overall rent, amounting to *** euros per square meter.

The monthly rent per square meter on the primary shopping streets in Munich measured between *** and *** euros in the first half of 2023. On Neuhauser Str., retailers had to pay on average *** euros per square meter for a new letting of 100 square meters on a ground level with a six-meter shopfront. In 2023, Munich was the most expensive city for prime high street retail real estate in Germany.

The cost of prime logistic space in increased between 2014 and 2023. Munich had the most expensive prime rent in 2023, at *** euros per square meter. On the other hand, rent in Leipzig cost *** euros per square meter - the lowest from all markets surveyed.

The annual primary rent costs for warehouses over ***** square meters in the occupier logistics market in Germany increased in recent years. Headline rents refer to the rent payable after rent-free periods or incentives, excluding taxes and charges. In the first quarter of 2025, the square meter rent for prime properties in Munich, or warehouses of highest quality in the best location, amounted to *** euros annually. In Europe, the most expensive markets for large warehouses were in London and Oslo.

In Germany, apartments were most expensive in Munich, with the average square meter price as high as ***** euros. In Cologne, on the other hand, the average square meter price was about ***** euros. According to the house price index in Germany, house prices in the country have seen an increase since the beginning of 2024, after declining from a peak in 2022.

The rental prices of prime office spaces per square meter varied greatly across different European cities in 2023, ranging from over ***** euros in London to *** euros in Riga. Prime office properties typically meet specific criteria, including a good location in major commercial centers, public transport accessibility, and energy efficiency. Where in Europe are offices most expensive? London, England, had the most expensive prime office spaces with the West End, Marylebone, and Knightsbridge/Chelsea submarkets commanding the highest prices. Other European cities with high-end office rents included Paris, Milan, and Dublin. Where is the most office space leased? Larger cities with flourishing economies tend to attract most businesses despite higher office space costs. Therefore, it is unsurprising that Germany's big Four (Berlin, Munich, Frankfurt, and Hamburg), Paris, and London had the highest take-up rates for office spaces across Europe. In Berlin and Luxembourg, the share of vacant office space was less than **** percent.

Prime rents in the major office markets in German cities are expected to grow year-on-year between 2025 and 2029, according to a May 2025 forecast. The Bavarian state capital Munich is expected to achieve the highest rental growth by 2029, at *** percent per annum-*** percentage points above the average rental growth forecast for the major European markets. In Europe, central city offices had better investment and development prospects than suburban offices.

Geneva stands out as Europe's most expensive city for apartment purchases in early 2025, with prices reaching a staggering 15,720 euros per square meter. This Swiss city's real estate market dwarfs even high-cost locations like Zurich and London, highlighting the extreme disparities in housing affordability across the continent. The stark contrast between Geneva and more affordable cities like Nantes, France, where the price was 3,700 euros per square meter, underscores the complex factors influencing urban property markets in Europe. Rental market dynamics and affordability challenges While purchase prices vary widely, rental markets across Europe also show significant differences. London maintained its position as the continent's priciest city for apartment rentals in 2023, with the average monthly costs for a rental apartment amounting to 36.1 euros per square meter. This figure is double the rent in Lisbon, Portugal or Madrid, Spain, and substantially higher than in other major capitals like Paris and Berlin. The disparity in rental costs reflects broader economic trends, housing policies, and the intricate balance of supply and demand in urban centers. Economic factors influencing housing costs The European housing market is influenced by various economic factors, including inflation and energy costs. As of April 2025, the European Union's inflation rate stood at 2.4 percent, with significant variations among member states. Romania experienced the highest inflation at 4.9 percent, while France and Cyprus maintained lower rates. These economic pressures, coupled with rising energy costs, contribute to the overall cost of living and housing affordability across Europe. The volatility in electricity prices, particularly in countries like Italy where rates are projected to reach 153.83 euros per megawatt hour by February 2025, further impacts housing-related expenses for both homeowners and renters.