Press Release
Market activity on Germany’s residential investment market accelerates in the third quarter
October 8, 2026
Media Contact
Bettina Bierhalter
Ass. Director|Communications
- Transaction volumes in the first three quarters at just under €5.9 billion, down four percent year on year but 17 percent higher quarter on quarter
- Portfolio transactions and international capital determine market activity
- Yields expected to rise further
Germany’s residential investment market recorded a transaction volume just shy of €5.9 billion in the first three quarters of 2026, down four percent compared to the year-earlier period. Of this volume, around €2.3 billion was generated in the third quarter, making it the strongest of the year so far. Larger transactions of existing portfolios and international capital determined market activity. These are the conclusions drawn in a current analysis prepared by the global commercial real estate services company CBRE.
“The third quarter brought a significant increase in the investment volume. Compared to the previous quarter, the transaction volume rose by 17 percent. Factors determining this performance included larger portfolio transactions that underpinned market activity.”
Stefan Wilke, Head of Residential Investment Deutschland at CBRE
Having captured a share of around 25 percent in the overall German real estate investment volume, residential held its place the strongest asset class in the first three quarters of 2026. Brisker market activity in the third quarter was supported by a handful of major portfolio transactions: More than half of the volume in the quarter was accounted for by these deals. Portfolio transactions captured a share of approximately 75 percent in the third quarter, while existing stock accounted for some 89 percent. At the same time, the number of transactions fell as against the previous quarter, from 51 to 44. In this environment, CBRE acted in an advisory capacity also in the sale of two Berlin-based residential portfolios comprising around 800 units in total.
Investments in existing stock as well as in completed new builds continued to determine market activity. Conversely, forward purchases and forward fundings remained lackluster.
“One of the main reasons for this is the depleted project pipeline in the multifamily housing segment. Fewer projects are being initiated as exit prices are only partly feasible, while the insolvency risk for developers remains high.”
Michael Schlatterer, Managing Director Residential Valuation Deutschland at CBRE
International capital bolstering market liquidity
International buyers who focused mainly on larger portfolio transaction generated around three quarters of the investment volume in the third quarter. This trend serves to underscore the ongoing appeal of German residential property for international investors. The result was driven mainly by larger core plus, value-add, and opportunistic transactions. Taken together, value-add and opportunistic strategies made up a share of approximately 58 percent while core and core plus strategies accounted for some 42 percent. “Investors with discretionary capital and an active asset management approach are currently more able to play a role. Conventional core investors are becoming increasingly selective in the face of higher financing costs and the growing requirements for return,” Wilke comments.
Top 7 markets clearly on the investor radar
Germany’s Top 7 housing markets remain important targets for institutional and international capital. At the same time, there is a stronger differentiation in investment decisions depending on the region.
“Location analyses, opportunities and risk analysis drilldowns in commercial due diligence and/or detailed consultations in the context of acquisition mandates are becoming increasingly important. Alongside the Top 7 locations, regional markets where investors have identified attractive risk-return profiles and scaling potential are increasingly coming into focus.”
Jirka Stachen, Head of Research Consulting Continental Europe at CBRE
“Berlin remains Germany’s largest residential investment market. The debate on socialization and ongoing discussions about rent regulation are making the need for due diligence more pressing, particularly in the eyes of risk-adverse investors. In cities such as Stuttgart the possible consequences of structural change in the automotive industry for employment, immigration and long-term tenant demand are undergoing more stringent, critical review. Attractive incentive schemes nevertheless improve the investment case and partly offset the risks,” Stachen adds.
Price discovery remains challenging
Price discovery continued to present a challenge in the third quarter. Many sales processes are renegotiated before signing, prices adjusted, or the deal put on hold. Average prime yield for multifamily housing in the Top 7 locations rose by 0.2 percentage points to 3.59 percent quarter on quarter. The drivers included changed capital market conditions, higher financing costs and greater requirements for returns.
“The increase in prime yields and the associated price adjustments open up more attractive entry possibilities for many investors than in recent quarters. In this context, yield adjustment is mainly driven by the capital market and not an expression of an underlying deterioration in the residential market’s fundamentals. However, whether investments, especially in developments and in energetic measures, can be realized in a financially viable manner largely depends on favorable financing terms and attractive funding opportunities,” Schlatterer comments.
“Capital is basically available but is being deployed more selectively and specifically depending on the property. The stronger reaction in the prime segment stems in particular from the higher sensitivity of core capital vis-à-vis the yield gap in relation to risk-free fixed-income investments,” Wilke adds.
Outlook for the full year
“A transaction volume of around eight billion euros, so a repeat of the year-earlier level, appears realistic for the full year,” Wilke states. “Achieving this level hinges on larger portfolio transactions being brought over the line in the final quarter.” Given the changed capital market environment, a moderate uptick in prime yields can be expected.
- Portfolio transactions and international capital determine market activity
- Yields expected to rise further
Germany’s residential investment market recorded a transaction volume just shy of €5.9 billion in the first three quarters of 2026, down four percent compared to the year-earlier period. Of this volume, around €2.3 billion was generated in the third quarter, making it the strongest of the year so far. Larger transactions of existing portfolios and international capital determined market activity. These are the conclusions drawn in a current analysis prepared by the global commercial real estate services company CBRE.
“The third quarter brought a significant increase in the investment volume. Compared to the previous quarter, the transaction volume rose by 17 percent. Factors determining this performance included larger portfolio transactions that underpinned market activity.”
Stefan Wilke, Head of Residential Investment Deutschland at CBRE
Having captured a share of around 25 percent in the overall German real estate investment volume, residential held its place the strongest asset class in the first three quarters of 2026. Brisker market activity in the third quarter was supported by a handful of major portfolio transactions: More than half of the volume in the quarter was accounted for by these deals. Portfolio transactions captured a share of approximately 75 percent in the third quarter, while existing stock accounted for some 89 percent. At the same time, the number of transactions fell as against the previous quarter, from 51 to 44. In this environment, CBRE acted in an advisory capacity also in the sale of two Berlin-based residential portfolios comprising around 800 units in total.
Investments in existing stock as well as in completed new builds continued to determine market activity. Conversely, forward purchases and forward fundings remained lackluster.
“One of the main reasons for this is the depleted project pipeline in the multifamily housing segment. Fewer projects are being initiated as exit prices are only partly feasible, while the insolvency risk for developers remains high.”
Michael Schlatterer, Managing Director Residential Valuation Deutschland at CBRE
International capital bolstering market liquidity
International buyers who focused mainly on larger portfolio transaction generated around three quarters of the investment volume in the third quarter. This trend serves to underscore the ongoing appeal of German residential property for international investors. The result was driven mainly by larger core plus, value-add, and opportunistic transactions. Taken together, value-add and opportunistic strategies made up a share of approximately 58 percent while core and core plus strategies accounted for some 42 percent. “Investors with discretionary capital and an active asset management approach are currently more able to play a role. Conventional core investors are becoming increasingly selective in the face of higher financing costs and the growing requirements for return,” Wilke comments.
Top 7 markets clearly on the investor radar
Germany’s Top 7 housing markets remain important targets for institutional and international capital. At the same time, there is a stronger differentiation in investment decisions depending on the region.
“Location analyses, opportunities and risk analysis drilldowns in commercial due diligence and/or detailed consultations in the context of acquisition mandates are becoming increasingly important. Alongside the Top 7 locations, regional markets where investors have identified attractive risk-return profiles and scaling potential are increasingly coming into focus.”
Jirka Stachen, Head of Research Consulting Continental Europe at CBRE
“Berlin remains Germany’s largest residential investment market. The debate on socialization and ongoing discussions about rent regulation are making the need for due diligence more pressing, particularly in the eyes of risk-adverse investors. In cities such as Stuttgart the possible consequences of structural change in the automotive industry for employment, immigration and long-term tenant demand are undergoing more stringent, critical review. Attractive incentive schemes nevertheless improve the investment case and partly offset the risks,” Stachen adds.
Price discovery remains challenging
Price discovery continued to present a challenge in the third quarter. Many sales processes are renegotiated before signing, prices adjusted, or the deal put on hold. Average prime yield for multifamily housing in the Top 7 locations rose by 0.2 percentage points to 3.59 percent quarter on quarter. The drivers included changed capital market conditions, higher financing costs and greater requirements for returns.
“The increase in prime yields and the associated price adjustments open up more attractive entry possibilities for many investors than in recent quarters. In this context, yield adjustment is mainly driven by the capital market and not an expression of an underlying deterioration in the residential market’s fundamentals. However, whether investments, especially in developments and in energetic measures, can be realized in a financially viable manner largely depends on favorable financing terms and attractive funding opportunities,” Schlatterer comments.
“Capital is basically available but is being deployed more selectively and specifically depending on the property. The stronger reaction in the prime segment stems in particular from the higher sensitivity of core capital vis-à-vis the yield gap in relation to risk-free fixed-income investments,” Wilke adds.
Outlook for the full year
“A transaction volume of around eight billion euros, so a repeat of the year-earlier level, appears realistic for the full year,” Wilke states. “Achieving this level hinges on larger portfolio transactions being brought over the line in the final quarter.” Given the changed capital market environment, a moderate uptick in prime yields can be expected.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE: CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm and a premier provider of critical infrastructure services. The company has more than 155,000 employees serving clients in more than 100 countries. CBRE serves clients through four business segments: Advisory (leasing, sales, debt origination, mortgage servicing, valuations); Building Operations & Experience (facilities management, property management, flex space & experience, critical infrastructure); Project Management (program management, project management, cost consulting); Real Estate Investments (investment management, development). Please visit our website at www.cbre.com.