Real estate market 2025: Rising prices despite financing pressure!

Real estate market 2025: Rising prices despite financing pressure!

On November 4, 2025, many Cologne residents will be faced with the challenge of finding an attractive opportunity on the real estate market. Demand for real estate remains high and every euro counts. So it's no wonder that, despite the recent price adjustments, interested parties are actively looking for suitable offers.

Agas-Immobilien offers an example of a current property in Cologne. The website Living happiness reports that prospective buyers have a contact available for further information. For inquiries, the name, address, email and a telephone number are required, with Simon Soldanski available as the contact person. Anyone who inquires without a callback number and address will unfortunately not receive an answer. In addition, a commission of 3,570 euros including VAT is due on the purchase price, which is payable when the purchase contract is signed. The purchase price itself may vary if demand is high.

Market development in 2024 and outlook for 2025

The situation on the real estate market in Germany has changed significantly in the last year. According to information from the daily news In 2023, real estate prices experienced a historic decline that the industry has not seen in the last 60 years. However, with the slight decline in interest rates and rising rental prices, property prices are expected to rise again in 2024. The situation remains crucial, and large price differences underline the nationwide differences in the market.

A look at some price examples for single-family homes makes it clear what it costs to purchase home ownership: In Munich, a detached single-family home in a good location costs 1.6 million euros, while in Mainz the price is 750,000 euros and Magdeburg has a price of around 300,000 euros. Nevertheless, prices are still on average five percent below their highs before the real estate crisis.

Financial framework conditions

Another factor that concerns everyone at the moment is the loan interest rates. These have improved significantly since 2023, as the European Central Bank cut interest rates four times to three percent in 2024. This means that the average interest rate for a ten-year loan at the end of 2024 will be between three and three and a half percent. This provides significant savings for buyers compared to 2023 conditions.

However, new construction remains a major issue. The target of 400,000 new apartments per year was not achieved last year. Experts are calling for more incentives from the new legislature to encourage housing construction, including a reduction in property transfer tax. Little equity is often the obstacle that dissuades prospective buyers from the dream of owning their own home. Therefore, buyers should focus on properties that they want to live in or rent out for the long term.

A further increase in property prices is expected in 2025, despite the many challenges buyers face. During this time of uncertainty, it is important to be well informed and keep a close eye on the market.