Rental Market in Transition: WohnBarometer Q4 2025 Shows Rising Rents Amid Falling Demand

Germany’s rental market is entering an intriguing phase at the end of 2025: while asking rents continue to rise, the demand for rental apartments is clearly declining. The latest ImmoScout24 WohnBarometer for the fourth quarter of 2025 provides key insights into the dynamics of supply and demand and highlights which regions are most affected.

Demand Drops – Especially Outside the Metropolises

• Compared to the previous quarter, demand for rental apartments fell across all regions:

  • Metropolises: -16%

  • Independent cities: -23%

  • Metropolitan suburbs: -17%

  • Rural areas: -20%

• Year-on-year, demand is also down: in the metropolises, it is 14% lower than at the end of 2024.

• Lower-income households are particularly affected: among those with net incomes up to €2,000, search activity is 7% lower than last year. Higher-income households, by contrast, are searching more actively (+6%).

Asking Rents Continue to Rise

Despite falling demand, rents remain on an upward trajectory:

• Existing apartments: +1.0% in the quarter, +3.7% year-on-year → Average €8.89/m²

• New-build apartments: +0.5% in the quarter, +3.7% year-on-year → Average €13.11/m²

Metropolises in Detail

• Munich: Most expensive city with €19.92/m² (existing) and €26.53/m² (new-build).

• Berlin: New-build rents surpass €21/m² for the first time after a +1.7% quarterly increase.

• Stuttgart: Strongest annual increase in existing rents (+5.4%).

• Cologne: Leads in the new-build segment with +6.8% year-on-year growth.

Causes and Outlook

According to ImmoScout24 Managing Director Dr. Gesa Crockford, the drop in demand is a short-term “good news story,” but it mainly affects lower-income households. The reasons include steadily rising rents, the uncertain economic situation, and lower immigration. Experts such as Prof. Dr. Tobias Just emphasize: housing demand remains high and the solution lies in accelerating the construction of affordable rental housing.

Conclusion

The WohnBarometer Q4 2025 reveals a paradox: fewer people are actively searching for rental apartments, yet prices continue to climb. For tenants, this means increasing financial pressure, while investors and developers face the challenge of creating affordable housing. Policymakers are called upon to establish conditions that make building rental housing easier and faster.

In short: Demand is falling, prices are rising, and Germany’s rental market remains under strain. Anyone planning to move or invest now should pay close attention to regional differences.