Property 2026: Is the comeback of peak prices coming? Interest rates, new builds, energy efficiency - what owners and investors need to know now

Property prices are rising again – could 2026 see a major return to record highs?

After two years of correction, the signs are becoming increasingly clear: the property market is stabilising, and prices in sought-after locations are already rising again. For owners, investors and owner-occupiers, the key question is: will we see a return to record highs by 2026 – or merely a technical recovery? A look at interest rates, new-build supply, energy requirements and purchasing power reveals a nuanced picture with clear areas for action.

Key drivers include falling financing costs (assumption: a moderate decline in construction loan interest rates against a backdrop of falling inflation), insufficient new-build volume and continued high demand in economically strong metropolitan areas. At the same time, households’ willingness to pay remains limited, which means a smooth return to the record prices seen in 2021 is unlikely everywhere.

The drivers of the economic upturn – and their limitations

Financing: Even small changes in interest rates have a noticeable effect. If mortgage rates fall by 0.5–1.0 percentage points, affordability improves and more buyers return to the market. Banks, however, remain cautious: household budgets, equity ratios and repayment plans are scrutinised closely.

New-build properties: High construction costs, limited capacity and stricter energy efficiency requirements are holding back new-build projects. This is supporting prices for existing properties, provided their location and energy efficiency are favourable.

Shift in demand: Prime A-grade locations, well-connected medium-sized towns and energy-efficient properties are benefiting more than average. Weaker B/C-grade locations with structural vacancy rates remain a selective investment.

What do the figures tell us – and what do they mean for 2026?

Following the peak in 2021/22, a correction of 10–20 per cent occurred in many areas, particularly for poorly refurbished properties. In 2024/25, purchase prices stabilised, with slight increases in some sought-after micro-locations. There are strong indications that 2026 will see a two-tiered scenario: in prime locations and for energy-efficient flats and houses, a return to record highs is plausible; in areas with high supply or a backlog of refurbishment work, the trend is more likely to be sideways, with a gentle recovery.

Is 2026 set to see a major return to record highs?

Yes – but selectively. In prime locations where supply is tight (city centres, waterfront neighbourhoods, areas with top schools) and for energy-efficient properties (e.g. meeting KfW standards, good insulation, modern heating systems), new record prices are a realistic prospect. This is where scarcity, lifestyle factors and institutional demand converge.

Not really – across the board. Where incomes are growing more slowly, vacancy rates are rising or major refurbishments are due, the price divide continues. Buyers are being more cautious in their calculations, banks are demanding higher levels of equity, and investors are scrutinising returns more critically.

Strategic tips for 2025/26

• Secure your funding early: Negotiate the fixed interest rate and terms (forward loans, unscheduled repayments) in good time. An update from your bank can significantly increase your room for manoeuvre.
• Optimise your energy score: Small measures (hydraulic balancing, insulating the cellar ceiling, reviewing PV quotes) can improve the energy performance certificate and boost the property’s market value.
• Data-driven pricing strategy: Make targeted use of micro-location comparisons, real-world demand (viewing rates, properties returned to the market) and bidding processes – don’t simply test an „aspirational price“, but manage the process intelligently.
• Complete property documentation: Energy performance certificate, declaration of division, minutes, planning conditions, maintenance records. Well-organised files speed up the sale and make the offer more binding.
• Calculating returns accurately: When investing in property, factor in the net basic rent, the risk of vacancy, maintenance costs (at least 1–1.5 % per annum) and a modernisation buffer.

What does this mean in practical terms for property owners and investors?

Property owners in prime locations: Check the market window now. A professional valuation based on actual sales in the immediate vicinity will show whether a sale close to the peak price is possible in 2025/26. Energy-efficient refurbishment boosts your negotiating position.

Properties in need of refurbishment: Realistic costing is key. Carrying out partial refurbishment before selling can deliver a good return on investment – for example, replacing the heating system or giving the bathroom a makeover – if this significantly broadens the pool of potential buyers.

Investor It’s the net return that counts. Solid ‘B’ locations with good infrastructure often outperform the returns of more expensive ‘A’ locations – provided the tenant mix is stable and capital expenditure is factored in. Check the potential for index-linked rent increases, rent scales and the owners’ association reserves.

Conclusion: 2026 could be a strong year – but only if you’re selective. Those who professionally manage their financing, energy efficiency and pricing strategy will maximise their scope for manoeuvre. What matters is not the headline about „record highs“, but making the right decision for your property in your specific micro-location.

Are you looking to sell, refinance or invest? Talk to us about your options. We provide clear figures, a well-structured marketing strategy and negotiate on equal terms.

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