German residential investment market remains subdued

The German residential real estate investment market continued its slowdown in Q3 2025, according to Lübke Kelber Research.

Residential - Lübke Kelbe

Transaction volume again fell below €1.5 bn, settling at around €1.3 bn for properties with over 20 units. 
Like in the past, only a few large transactions exceeded €100 mln in volume. The volume was similar to Q2 2025 (€1.2 bn) but a 25% drop compared to the previous year. Year-to-date (Q1-Q3), the total volume reached €4.9 bn, representing 6,769 residential units sold at an average of €24.1 mln per transaction.
Core properties continued to be in demand, mainly from institutional investors and family offices, while domestic and international private equity investors and specialized providers focused on value-add and "manage-to-green" strategies.
Despite the current market pause, Lübke Kelber anticipates an upturn in investment activity over the next 6-12 months. This is attributed to an attractive market environment, a growing number of available portfolios, and increasing market rents that are expected to drive up capital values and positively influence investment demand.
Looking ahead, continued global geopolitical and economic uncertainty is likely to strengthen the German residential real estate market. Its transparency, liquidity, and strong rental demand backlog make it an attractive and relatively safe investment, drawing both national and international capital in the medium term, even amidst Germany's current economic challenges.
Mark Holz, head of Strategy and Research, explained: “At present, there are a lot of residential real estate portfolios, including some very large ones, on the market. We can expect to see significantly higher transaction volumes again as early as the 4th quarter. But even over the long term, the pipeline indicates that the transaction environment will pick up pace significantly.” 
Lübke Kelber’s analysis of transaction volume focused exclusively on residential properties with 20 or more units, where commercial elements are minor. It does not include minority investments, M&A, or entity-level deals, nor does it cover specialized housing like student or senior living facilities.