European Cities: Berlin and Germany's Seven Largest Cities, Property Prices to Q4 2028

Key figures (as of October 2026)

What the Berlin measure is

This study resolves on the official price index for owner-occupied flats in Germany's seven largest cities, one of which is Berlin. It covers the seven cities together, Berlin included; no official price index is published for Berlin alone. The federal statistics office publishes the national index each quarter, broken down by type of district, and the seven largest cities form one of those types. The index is quality-adjusted: it uses statistical models to price flats of constant characteristics, so a change in the mix of flats sold does not move it. Results from the first quarter of 2026 are provisional, and the office revises recent quarters as late sales are reported. It rebased the index to 2025 = 100 in June 2026.

Berlin's own valuation committee, which collects every notarised sale in the city, publishes average prices per square metre. They are simple averages, not quality-adjusted, and the full-year figures appear in the summer of the following year, too late to settle a forecast for the end of 2028. They are shown here for scale.

Prices are flat after the 2023 fall

The seven-city flats index peaked at 109.9 in the second quarter of 2022 and fell to 96.1 by the first quarter of 2024. It recovered during 2025, with annual rates between 2.2% and 3.7%, but has stalled in 2026. In Berlin, the valuation committee described flat prices in the first quarter of 2026 as nearly unchanged and found average prices in the first half about 1% above a year earlier. Average prices for new-build flats fell 8% in the same period, which the committee put down to fewer sales of very small flats; excluding those, they rose about 2%.

Two-year changes since 2019

On the Centre's own calculation from the published index levels, the change in the seven-city flats index from one fourth quarter to the fourth quarter two years later was 23.0% (2019 to 2021), 13.5% (2020 to 2022), -7.6% (2021 to 2023), -5.9% (2022 to 2024) and 3.4% (2023 to 2025). Taking every quarter since the series began in late 2015, two-year changes have ranged from -11.2% (second quarter of 2022 to second quarter of 2024) to 27.6% (fourth quarter of 2015 to fourth quarter of 2017).

Rents and yields

Berlin's official rent table for 2026, in force since 28 May 2026, puts the median rent at 7.71 euros per square metre a month, net of heating and service charges. It is based on about 17,000 surveyed rent records and covers about 1.6 million dwellings whose rents are not set by public subsidy rules. No gross yield is given, because the official rent figure is a median and the official sale price is an average, and the Centre computes a yield only from two measures of the same kind.

Credit, demand and policy

The average rate on new home loans in Germany was 4.00% in August 2026, against 3.71% a year earlier and 3.72% in March 2026. The euro area's central bank raised its deposit rate to 2.50% in September, saying financing conditions had tightened and energy prices kept rising, and held it on 29 October. Sales have slowed: the valuation committee counted about 5% fewer property sales of all kinds in Berlin in the first half of 2026 than a year earlier, after a rise of 10% in 2025.

On policy, a federal law of July 2025 allowed the states to keep caps on rents for new leases until the end of 2029. Berlin renewed its cap for the whole city from 1 January 2026 to 31 December 2029, so rents on most new leases may not be set more than 10% above the local comparative rent. A federal law in force since 30 October 2025 lets local authorities approve some new housing faster.

What forecasters expect

A major credit rating agency's July 2026 outlook expected national house prices to rise 1.2% in 2026, 2.8% in 2027 and 2.5% in 2028. Together, the 2027 and 2028 figures imply about 5.4% over two years on the Centre's own calculation. They are national figures for calendar years, not the seven-city flats index, and the large cities have grown more slowly than the country in 2026.

What it means

Flat prices in Germany's largest cities are about a tenth below their 2022 peak and have stopped rising in 2026 after a modest recovery in 2025. In Berlin, average prices are steady, sales are slowing and mortgage rates are close to 4%. The central case is little change or slow growth over 2027 and 2028, with a fall almost as likely as a firm rise.

Scenarios: the change in the seven-city flats price index from Q4 2026 to Q4 2028

These probabilities are the Centre's analytical estimates, reasoned from the figures above. Because the bands are ordered, the forecast is scored with both the multi-category Brier score and the ranked probability score.

The variable is the nominal change in the official quarterly price index for owner-occupied flats in Germany's seven largest cities taken together, Berlin included, and not in Berlin on its own, published by the federal statistics office as part of the national house price index, from the fourth quarter of 2026 to the fourth quarter of 2028. If the statistics office publishes this two-year change directly, that figure is used. Otherwise the Centre computes it from the two index levels as published in the first release that contains the fourth quarter of 2028, normally about three months after the quarter ends. If the index has been rebased by then, both levels are taken on the same base from that release. Later revisions are ignored. The figure is read in percent, so a fall of 0.5% counts as -0.5%. A figure with more than one decimal place is rounded half up to one decimal place, once, before it is placed in a band, so 3.95% counts as 4.0%. A figure stated as "more than", "over", "about", "around", "nearly" or "almost" a number counts as that number. A figure reported as a range counts at its midpoint. The bands cover every possible value, and each edge falls in the higher band: exactly -4.0% falls in band 2, exactly 0.0% in band 3, exactly 4.0% in band 4 and exactly 8.0% in band 5. If no figure for the fourth quarter of 2028 is published by 30 June 2029, the forecast is withdrawn.

What to watch

1. Quarterly index: the seven-city flats readings for the third and fourth quarters of 2026, which set the starting point for this forecast.
2. Mortgage rates: the average rate on new home loans, which reached 4.00% in August 2026.
3. Berlin sales: the valuation committee's quarterly reports on the number of flats sold and the direction of prices.
4. Rents: rents on new leases under the city-wide cap that runs to the end of 2029.
5. Building: permits and completions under the federal law to speed up housing approvals.

Figures as of late October 2026. Probabilities are analytical estimates by the Ghaf Centre for Studies & Research.