Current price indices and interest rate data from the official statistics of the Deutsche Bundesbank and the Federal Statistical Office – updated automatically. The time series provide an overview of the key market movements and serve as a reference basis for expert real estate valuations.
Commercial property prices
The commercial property price index of the Deutsche Bundesbank (BBDR1) reflects price developments for office, retail, and multi-family residential properties in Germany. The base year is 2022; a value below 100 indicates that prices are below the level of the base year. The indices are shown smoothed in order to eliminate short-term transaction outliers.
Office and retail properties are under structural pressure: hybrid working models are reducing the space required per employee, while growing online retail is placing lasting strain on brick-and-mortar retail space. Multi-family residential buildings are developing more stably due to sustained housing demand.
Financing Environment and Price Development
The effective interest rate for new residential building loans with a 10-year fixed interest period is a key determinant of the affordability of property purchases. This indicator, published monthly by the Bundesbank, reacts directly to ECB key interest rate decisions and thereby influences purchase demand and price levels.
The Consumer Price Index (CPI) shows the general inflation rate and provides insight into the extent to which purchasing power and construction cost trends affect the investment environment. The separate consideration of rent price development for residential space – expressed as a year-on-year rate of change – illustrates whether rental income is keeping pace with the general price level.
Residential Property Prices in Regional Comparison – Condominiums
The Bundesbank index is based on actual transaction prices and differentiates between three regional groups: the seven largest German cities (A-cities: Berlin, Hamburg, Munich, Cologne, Frankfurt am Main, Stuttgart, Düsseldorf), 127 other cities, and rural districts and independent cities. It covers newly built apartments upon first occupancy; the time series dates back to the year 2000.
Source: Deutsche Bundesbank
Regional differentiation is essential for valuation practice: market adjustment factors can vary considerably depending on location. A nationwide average figure is generally not suitable for expert purposes – what matters is always the specific sub-market segment.
Residential property prices in regional comparison – houses
For houses (single- and two-family houses, terraced houses) upon re-occupancy, the Deutsche Bundesbank records a separate time series using the same three-part regional scheme. Existing properties depend more heavily on individual location factors and renovation status than first-occupancy properties – the index trend therefore reflects the average market development.
Source: Residential Property Price Index, Deutsche Bundesbank
Residential property price index according to the Federal Statistical Office
The Federal Statistical Office (Statistisches Bundesamt) records price changes for residential real estate on a quarterly basis and distinguishes between new-build and existing properties. The methodology is hedonic: quality changes in the properties are statistically adjusted so that the index reflects actual price changes under otherwise comparable conditions (base year: 2015). As a second, independent data source, this index supplements the Bundesbank time series.
Source: Federal Statistical Office
New-build and existing-property prices often react differently to market changes – persistently high construction costs are slowing the price decline in the new-build segment, while existing properties react more sensitively to interest rate changes. For valuation practice, separate market observation of both segments is therefore recommended.
Commercial property price index: office and retail
The BBDR1 time series shows the price development for office and retail properties in Germany. The smoothed quarterly values enable a trend assessment without distortions caused by individual large-scale transactions – an advantage over market reports based on asking prices.
Source: Deutsche Bundesbank
In the income approach, the price development of commercial real estate must be taken into account when selecting the property yield rate and when applying the sustainable rent. Phases of persistent price correction signal that the market is pricing in structural risks – these cannot be absorbed solely through rent adjustment clauses.
Mortgage interest rates: effective interest rate for residential construction loans
The Deutsche Bundesbank publishes monthly the effective annual interest rates for residential building loans to private households. The effective interest rate for new business with an initial fixed interest period of over 10 years is the most closely observed reference value for long-term real estate financing.
Deutsche Bundesbank
The interest rate level directly influences the capitalization rates (Liegenschaftszinssätze) in the income approach and the discount rates in the discounted cash flow method. The historical overview illustrates how quickly and significantly the financing environment can change – and why the valuation date is decisive for selecting the valuation parameters.
Relevance for expert real estate valuation
The time series presented here feed into the valuation work in the following way:
- Market adjustment in the sales comparison approach: Comparable transactions from past periods must be indexed to the valuation date. Price indices such as the Bundesbank's residential property price index provide the empirical basis for this.
- Capitalization rate (Liegenschaftszinssatz) in the income approach: The interest rate environment influences the return expectations of capital investors and thus indirectly the property interest rates used to capitalise sustainable net income.
- Sustainable rent: The current rent price trend supports the plausibility review of the assumed rental income and provides indications of the expected rent development over the observation period.
- Market adjustment factor in the cost approach: In order to convert the calculated cost approach value into a market-adjusted market value, a market adjustment factor is applied – derived from the general market activity reflected in the indices.