Real Estate Market Report 2026:
Early Signs of a Region-Wide Recovery

September 30, 2026—The annual analysis of the real estate landscape is now online. Discover the trends, figures, and insights shaping the market.

The real estate market in Hanover is slowly regaining momentum. While investors are once again pouring more money into offices and hotels and demand for logistics real estate is stabilizing, the residential market remains tight due to insufficient construction. At the same time, there is a growing demand for quality, with high-end properties in prime locations that are sustainable and flexible in use being in high demand. Innovative concepts that combine living, working, and leisure are becoming increasingly important.

Office Market at Previous Year’s Level

In the first half of 2026, approximately 60,000 square meters of office space were leased in Hanover—exactly the same amount as in the previous year. A similar result is expected for the full year as well. However, demand has changed: Companies are now evaluating their space requirements much more carefully than before. They prioritize modern, easily accessible offices equipped with state-of-the-art technology and a high quality of environment. Flexibility and cost-effectiveness are playing an increasingly important role. Older, less attractive offices, on the other hand, are facing growing challenges. They must be upgraded or repurposed; otherwise, they will remain vacant.

Residential Construction Remains Under Pressure

The residential real estate market in Hanover suffers from a central problem: too little is being built. The consequences are palpable: While purchase prices for condominiums have stabilized, rents continue to rise because supply is simply insufficient. 2025 marked a low point: there were fewer building permits and completions than at any time in the past ten years—even though the region needs significantly more housing. But there is a ray of hope: In the first half of 2026, there were slightly more building permits than in 2025. The focus now is on speeding up planning and permitting processes and simplifying building standards to cut costs and build faster. The future development of the residential real estate market will depend crucially on whether we succeed in permanently increasing new construction activity and gradually adapting the housing supply to meet the high demand.

“The real estate market in Hanover is holding its own in a still challenging environment. Quality, sustainability, and flexible usage concepts will be crucial for the future.”

Sven Carstensen, Managing Director of bulwiengesa GmbH

Logistics Market Stabilizes

Demand for logistics real estate remains strong, though no longer as high as it was during the peak years of 2018 through 2022. Smaller and medium-sized spaces are in particularly high demand. However, decision-making is taking longer today—especially among companies that intend to use the properties themselves. They are hesitant because of significant economic uncertainty and high construction costs.

In the coming years, the supply of logistics space will grow, and with it, competition. The differences between properties are becoming increasingly pronounced: High-quality properties in prime locations can maintain their rental rates, while less attractive properties must contend with price discounts.

“Urban planning will change. Older office locations can be modernized and redeveloped. However, it can also be worthwhile to repurpose vacant office buildings—for example, into apartments or micro-apartments for students—as we plan to do with the techfactory in Nordstadt. Such technology parks near universities are important because they promote research and new industries—and thereby also drive demand for space and economic prospects.”

Ulf-Birger Franz, Head of the Economic Affairs Department for the Hannover Region

Hotel Market Continues to Thrive

2025 was a record year for hotels in the state capital: With 2.48 million overnight stays, a new all-time high was reached. At the same time, there are more hotels and more beds in the city. The figures show that the industry is doing well: Hotel occupancy has risen, and although the average room rate has fallen slightly, hotels are earning more overall because more rooms are occupied.

New construction, renovations, and repurposing projects are shaping the market. International hotel chains are gaining market share—a sign that Hanover is becoming an increasingly attractive location. Smaller, independent hotels, on the other hand, are struggling because competition is intensifying.

» Hannover’scity center is one of the busiest and highest-revenue downtown areas in the state. This is certainly also due to the fact that the city itself has invested heavily and will continue to do so in the coming years. When places like Steintorplatz, Raschplatz, or even the Kulturdreieck are revitalized, it’s an added bonus for everyone in the city center. «

Anja Ritschel, Head of the Department of Economic Affairs and the Environment for the State Capital of Hanover

Retail: The City Center in Transition

Retail in Hanover is changing. While neighborhood stores and specialty retail centers are performing steadily, some downtown locations are struggling. This is not due to a lack of demand, but rather to changing real estate requirements. Flexible, highly visible spaces in established locations are in demand.

Former department stores are increasingly being converted into mixed-use districts that combine retail with dining, services, education, leisure, and residential spaces. A recent example is the Region of Hanover’s lease of 18,000 square meters in the former Galeria Kaufhof building for the Cora Berliner Vocational Schools. This shows that downtown areas must reinvent themselves to remain attractive.

Retail sales of approximately 9.05 billion euros are expected in the Hannover region by 2026—300 million euros more than in the previous year.

Real Estate Market Report: All Data and Trends Online

Those seeking detailed information can find all the data, trends, and maps in the Hannover Real Estate Market Report. The report is published in collaboration with 29 partners from the real estate industry. A compact print edition summarizes the key figures.

The report will also be presented at Expo Real in Munich from October 5 to 7, 2026.