Investment property in Cologne: what the figures say in 2026

Moe Afonso · 2026-10-13

You are considering buying a tenanted apartment in Cologne. The idea makes sense: a city of over a million people, a university, the cathedral, media companies and insurers. And hardly any apartments stand empty.

The other side becomes apparent as soon as you compare purchase prices and rents. In 2025, a tenanted existing apartment cost, on average, just over 28 times its annual rent. Add to that 6,5 % property transfer tax, a rent brake and a rent increase cap of 15 %.

Here you will find official figures with sources, a comparison of eight neighbourhoods, the rules for landlords and an honest worked example.

01Cologne in figures

The following table summarises the data on which this page is based. Each row gives its source and reference date.

02Population and demand

Cologne is the largest city in North Rhine-Westphalia and the fourth-largest in Germany. At the end of 2025, it had 1.100.076 residents, 2.557 more than a year earlier. Growth comes from inward migration: in 2025, 3.041 more people moved to Cologne than left, and among 18- to 29-year-olds the figure was as high as 9.449. At the same time, deaths exceeded births by 1.064.

For landlords, household structure is almost more important than population size. Of Cologne's 575.992 households, 298.905 consist of one person, or 51,9 %. These households mainly seek small and medium-sized apartments. The number of one-person households has risen every year since 2021.

The picture for new construction is mixed. In 2025, 4.623 homes were completed, the highest figure in ten years. Building permits, however, fell by 21 % to 2.323 homes, while the number of approved but unfinished homes shrank to 7.821. This suggests that completions will decline again in the coming years.

Over the longer term, the city is planning several new urban quarters. More than 3.000 homes and around 6.000 jobs are planned for Deutzer Hafen; according to the project website, the planning framework for the first section (A) has been in force since the end of August 2026. In Kreuzfeld in northern Cologne, more than 3.500 homes are planned across 80 hectares, while Parkstadt Süd covers 115 hectares. These projects will expand supply over a period of years and may increase competition for existing apartments.

One qualification is necessary. The city's population forecast dates from 2018 and projected around 1.120.400 residents with a primary residence by 2030. At the end of 2025, the figure was 1.092.607. Cologne is therefore growing, but more slowly than was assumed at the time. Growth since 2016 has been 1,7 %, with a dip during the pandemic.

03Economy and labour market

Exactly 631.907 people were employed in jobs subject to social security contributions in Cologne in mid-2025, more than in any previous June. 88 % work in the service sector. The largest sectors are health and social care with 86.982 employees, information and communication with 56.706, transport and logistics with 47.059, and banking and insurance with 39.858.

Cologne also provides employment for the surrounding region. In mid-2025, 322.224 people commuted into Cologne and 140.003 commuted out. Around half of those employed in the city therefore live outside it.

The counterargument is found in the same figures. Manufacturing lost around 1.900 jobs by mid-2025 (−3,8 %). At the end of September 2025, employment was below the previous year's level for the first time since 2020. The regional forecast by the Institute for Employment Research expects a decline of 1,0 % in 2026. The unemployment rate was 9,0 % in September 2026, compared with 9,1 % a year earlier.

Cologne is a major higher education centre. The city cites approximately 100.000 students at 30 higher education institutions. The University of Cologne alone had around 43.250 students in the 2025/26 winter semester, while TH Köln reports more than 21.000. Students and people starting their careers mainly seek small apartments. This is precisely where rents per square metre are highest.

04Rents, purchase prices and rental yields

There are three rent figures investors need to distinguish in Cologne, and they differ significantly. Confusing them makes yields look better than they are.

Cologne's rent index is a simple rent index under § 558c BGB, not a qualified one. It is compiled by Rheinische Immobilienbörse together with tenant and owner associations and is substantially below advertised rents. Asking rents rose by around 5 % in 2025; small apartments under 30 m² were advertised at 23,60 € per m², and apartments of 60 to 79 m² at 13,30 €.

For purchase prices, the Property Valuation Committee's Property Market Report is the best source because it analyses all notarised purchase contracts. Across all individually owned apartments, the average in 2025 was 4.709 €/m², an increase of 4,2 % on the previous year. New-build apartments cost an average of around 7.100 €/m², and resale apartments around 4.320 €/m². We calculated the last two figures from the report's neighbourhood tables, weighted by the number of sales.

Two indicators can be derived from this. The purchase price multiple shows how many years' rent the purchase price represents. The gross rental yield is its reciprocal expressed as a percentage: annual rent divided by purchase price, before costs.

The figure that matters is the second-to-last one. If you buy an apartment that is already tenanted, you receive the rent stated in the contract, not the advertised rent. At a rent of 12,40 € and a purchase price of 4.239 €/m², the purchase price multiple is 28,5 and the gross rental yield is 3,5 %. The high figure for Neuehrenfeld should be treated with caution, as small and furnished apartments dominate listings there.

What is the rental yield on your apartment? Enter the purchase price, rent and costs: the calculator shows gross and net rental yields.

The property capitalisation rate (Liegenschaftszinssatz) also shows that buyers in Cologne accept low yields. The Property Valuation Committee determined a rate of 1,9 % for tenanted individually owned apartments in 2025. Investors in Cologne are therefore paying primarily for location and demand, rather than ongoing yield. This says nothing about whether an apartment will retain its value.

05Neighbourhoods at a glance

Cologne has 86 neighbourhoods across nine boroughs, and prices vary by more than a factor of two. The table shows eight neighbourhoods with numerous sales. Purchase prices are averages for resale apartments from the Property Market Report, across all construction years and sizes. An individual property may differ significantly.

The table reveals a pattern. Cheaper neighbourhoods in Cologne do not automatically offer higher yields. In Chorweiler, apartments are inexpensive, but rents are so low that the purchase price multiple is around 32. In Neustadt/Süd, apartments are expensive, but rents are high too.

06Rules for landlords in Cologne

Cologne is one of the 57 municipalities that North Rhine-Westphalia has designated as areas with a tight housing market. This has four consequences for you as a landlord.

• Rent brake (Mietpreisbremse): When granting a new tenancy, rent may be no more than 10 % above the local comparative rent. The ordinance applies until 31.12.2029. Exemptions cover apartments first used and let after 01.10.2014 and the first letting after comprehensive modernisation. You may continue charging a higher previous rent.
• Rent increase cap (Kappungsgrenze): During an existing tenancy, rent may rise by no more than 15 % within three years, rather than 20 %. Applies until 28.02.2030.
• Protected period against termination: If a rented apartment was converted into an individually owned unit after the tenant took possession, the buyer may terminate the tenancy for personal use only after eight years. Applies until 28.02.2030.
• Protection of residential housing: Cologne's housing protection by-law applies in the version effective from 01.07.2026. Short-term letting is permitted for up to 90 days a year without a permit, but only with a housing identification number. You must notify the city of vacancies lasting more than six months. Breaches can be punished with fines of up to 500.000 €.

When buying in North Rhine-Westphalia, you pay 6,5 % property transfer tax, jointly the highest rate in Germany with three other federal states. Add around 1,5 to 1,8 % for the notary and land registry and, if an estate agent is involved, usually a buyer's commission of 3,57 %. Together, these can quickly exceed 30.000 € for an apartment costing 260.000 €. Details are available on our page on property transfer tax in North Rhine-Westphalia and in the purchase costs calculator.

07Worked example: a tenanted apartment in Cologne

Take Lena. She is employed, single and has a taxable income of 70.000 €. She buys a tenanted two-room apartment of 62 m², built in 1972, for 260.000 €. That is around 4.190 €/m², close to the Cologne average for tenanted apartments. The tenant pays 12,40 €/m², or 768,80 € a month. Lena pays the purchase costs from her own funds, while the bank finances the purchase price. The name is fictional; the figures are a worked example, not a forecast.

Just over 30.000 € therefore goes towards costs that you will not recover on sale. Now for the ongoing calculation for a full year.

Lena therefore contributes around 272 € from her salary each month, after tax. Principal repayments amount to 325 €, reducing her loan. In purely mathematical terms, she is building wealth this way, provided rent, interest and costs remain unchanged. This is not a profit in the narrower sense.

Why are the figures so tight? A purchase price multiple of just over 28 leaves no room for manoeuvre at an interest rate of 3,8 %. Three levers change the picture: more equity, a lower purchase price or a higher rent. Because of the rent brake and rent increase cap, rent is the weakest of the three. For details of how rental income is taxed, read our guide to tax on rental income.

For comparison: a new-build apartment in Cologne

What would Lena's calculation look like with a newly built apartment? Let us take a 45 m² apartment for first occupation costing 319.680 €, or 7.104 €/m² without a parking space. This is the average for first sales of new-build apartments in 2025 from the 2026 Property Market Report, weighted by us according to sales numbers in the neighbourhood tables. We assume rent of 18,00 €/m², the median asking rent for new-build apartments in Cologne in 2024 according to NRW.BANK. Property transfer tax, notary and land registry fees total around 25.740 €; we assume no estate agent's commission when buying from the developer. Income, interest and principal repayment remain as above.

What changes: at 13.754 €, depreciation is a little over three times as high as for the existing apartment, and maintenance usually costs less in the first few years. In return, each square metre costs around 70 % more, the gross rental yield of 3,0 % is below the existing apartment's 3,5 %, and the tax saving depends heavily on your own tax rate. The rent brake does not apply to the first letting (§ 556f BGB), but subsequent rent increases are still restricted by the rent increase cap.

08Opportunities and risks of investing in Cologne

Cologne has characteristics that favour letting property. Each, however, has a downside you should be aware of.

There are also risks that are not specific to Cologne: higher interest rates when refinancing, special assessments in older buildings and lost rent until the next letting. Nobody can predict how the value of a Cologne apartment will develop. Between 2022 and 2023, prices for resale apartments fell by around 8 % according to the Property Valuation Committee.

Read more about the general advantages and disadvantages of a tenanted apartment in our guide to buying an apartment as an investment.

09Other locations

Other cities in North Rhine-Westphalia: Overview of North Rhine-Westphalia · Aachen · Bielefeld · Bochum · Bonn · Dortmund · Duisburg · Düsseldorf · Essen · Gelsenkirchen · Münster · Siegen · Troisdorf · Wuppertal

All locations compared: Where is investment property worthwhile? Cities compared in 2026 · Which federal state is suitable? All 16 compared

10Further reading

• Buying an apartment as an investment: advantages and disadvantages
• Tax on rental income
• Notary fees when buying property
• Rental yield calculator
• Purchase costs calculator
• Property transfer tax in North Rhine-Westphalia

11Sources

All sources accessed on 13.10.2026.

• Property Valuation Committee for the City of Cologne, Property Market Report 2026, reporting year 2025 (pp. 12–14, 30, 126–144, 150, 152)
• Cologne Property Valuation Committee, Press release on the Property Market Report 2024 (price decline in 2023)
• City of Cologne, Cologne Statistical Bulletin 3/2026: Cologne's population in 2025
• City of Cologne, Cologne Statistical Bulletin 13/2025: Housing vacancies in Cologne, results of the 2022 Census
• City of Cologne, Cologne Statistical Bulletin 9/2026: Rental housing supply in Cologne in 2025
• City of Cologne, Cologne Statistical Bulletin 6/2026: Cologne labour market
• City of Cologne, Press release of 23.04.2026 on housing construction in 2025
• City of Cologne, Population forecast for Cologne, 2018 to 2040, notice dated 12.12.2018
• Cologne Employment Agency, Press information No. 20 of 30.09.2026
• Rheinische Immobilienbörse e. V., Cologne rent index, April 2025
• NRW Tenant Protection Ordinance (MietSchVO NRW), GV. NRW. 2025 S. 111, amended GV. NRW. 2025 S. 848; Haufe, NRW extends the rent brake, 24.11.2025
• Deutzer Hafen Köln, Project website (planning figures as at 23.09.2026); KölnBusiness, MIPIM 2026: Major projects in the City of Cologne, 25.02.2026
• City of Cologne, Housing protection and prohibition of unauthorised changes of use
• City of Cologne, Studying in Cologne; University of Cologne, Announcement on the 2025/26 winter semester; TH Köln, Key facts at a glance
• Act setting the property transfer tax rate in NRW
• § 32a EStG, § 7 EStG, §§ 556d, 556e, 558, 558c, 577a BGB
• NRW.BANK, Cologne housing market profile 2025 (new-build rent 2024, median asking rents; data: empirica price database, based on VALUE market data)
• First sales of new-build apartments in 2025: Cologne Property Market Report 2026 (see above), pp. 30, 116 and 126–144, own weighting
• § 7 Abs. 5a EStG (declining-balance depreciation), § 7b EStG (special depreciation for new rental housing), § 556f BGB
• All purchase price multiples, yields and the worked example: own calculation, as at 13.10.2026

Note: This page provides general information and does not replace investment, tax or legal advice. All yield and cash flow figures are illustrative calculations with disclosed assumptions, not forecasts, as at 13.10.2026.