Traditional housing in demand: 90% of respondents are investing in major cities – rents will continue to rise faster than purchase prices
Residential property in Germany remains a preferred investment destination due to sustained high demand, strong resilience to crises and a structural housing shortage. Strategies such as Manage-to-Core and Manage-to-ESG are gaining relevance where targeted measures enable substantial increases in value. Investors anticipate rising purchase prices in the coming months – albeit at a more moderate pace than in previous years. In the rental market, investors expect growth of at least 2.5 per cent in the top seven cities as well as in secondary locations.
The results are based on Cushman & Wakefield’s 2026 Residential Real Estate Investor Survey, in which 117 market participants took part in January and early February. Around half of the respondents are from asset and investment management, with 26 per cent – significantly more than in the previous year – from project development. Private equity investors, REITs, insurance companies, fund managers and family offices also took part. 41 per cent have portfolios or development volumes of at least 2,500 units, whilst 35 per cent hold fewer than 500 units.
Jan-Bastian Knod, Head of Residential Investment Germany at Cushman & Wakefield, comments: “The residential asset class presents itself as a future-proof and promising investment opportunity. Those who take action now will benefit from a stable starting point, clear growth prospects and a wide range of strategic options.”
Growth combined with planned sales is gaining importance
The results of the latest survey show a shift in strategic focus towards growth combined with planned sales. 40 per cent of respondents cite this as their preferred strategy (up from 32 per cent last year). At the same time, both the “focus on portfolio management whilst remaining open to acquisitions and disposals” and growth-oriented strategies without planned disposals are losing ground slightly.
Jan-Bastian Knod: “Many market players are managing their portfolios more actively and exploiting market opportunities in a more targeted manner.”
Realising value creation potential: Growing interest in Core+ and Value-Add
Investors continue to target high-quality core properties; 49 per cent of respondents selected this option in response to the relevant question. However, the pure Core segment has lost slightly in appeal compared to last year: Core+ (61%) and Value-Add strategies (58%) are in significantly higher demand. “Investors increasingly wish to realise value creation potential during the holding period. Concepts such as Manage-to-Core are continuing to gain importance: existing properties of medium quality are being specifically developed into Core products through investment,” says Knod.
ESG continues to lose relevance – but remains a factor
The results of the latest survey indicate that, at least from the respondents’ perspective, ESG remains relevant in investment decisions, but its significance is declining. Whereas last year a total of 76 per cent of respondents believed that ESG was “extremely relevant” or “somewhat relevant” to investment decisions, this proportion fell to 64 per cent in the 2026 survey.
Investors’ favourites: traditional housing in the existing portfolio or new-builds
The latest survey by Cushman & Wakefield once again confirms the findings of the survey conducted in early 2025. Even though some areas of ‘New Living’ – such as micro-living, student accommodation or housing for the elderly – are in greater demand than last year, whilst others are seen as declining in popularity, traditional housing in existing stock and new-build properties remains at the very top of investors’ wish lists or portfolios. Just under 90 per cent of respondents are investing in existing properties in cities with over 500,000 inhabitants, an increase of around 20 per cent compared to the previous year. Large cities are also gaining ground in new-build developments: at 76 per cent, this is 15 percentage points higher than the previous year. Also striking is the rise in approval ratings for investments in land, which is likely due to the greater participation of project developers in this year’s survey. The three German cities with over a million inhabitants – Berlin, Hamburg and Munich – occupy the top spots in the assessment of the most attractive investment locations, with figures slightly above 50 per cent, closely followed by Frankfurt, Stuttgart and Düsseldorf at just under 50 per cent. Cologne, Leipzig, Dresden and Nuremberg follow some way behind (between 27 and 29 per cent).
Market dynamics: Moderate rise in purchase prices, significant increase in rents expected
In the top seven cities, more than three-quarters of market players expect transaction activity to rise, whilst around 70 per cent anticipate growing momentum even in secondary locations. Collaborations are coming more into focus, whilst alternative forms of housing remain in demand but are less dominant than in the previous year – an indication of a return to traditional living.
A moderate upward trend is emerging in terms of prices. For new-builds in the Top 7, around 60 per cent anticipate increases of between 0.5 and 5 per cent. In secondary cities, the picture is more mixed: around 40 per cent expect similar growth, whilst 43 per cent see little change.
The trend is much clearer when it comes to rents. In the Top 7, 71 per cent expect increases of 2.5 per cent or more for new-build properties and 68 per cent for existing stock. In secondary locations, too, more than half of those surveyed anticipate similar increases. The rental market thus remains on a growth trajectory – albeit with momentum that is increasingly normalising.
