Is now a good time to sell my Dresden investment property?
If you bought your let flat in Dresden many years ago — perhaps with the special depreciation (Sonder-AfA) of the time — this is not a “now-or-never” sales pitch. It is a sober look at the cycle: what actually happened, where we stand, and for whom an exit now makes sense.
Do property prices rise forever? The interest-rate turn was the reality check
No. The market moves in cycles — and the last few years showed that in fast-forward. Two number-worlds sit side by side here: your property's large realised long-term gain, and the short, sharp correction that showed the curve can also fall.
×2–3
Dresden condominiums: ~€1,578/m² (2011) → ~€3,100/m² (2026); around +5 to +7 %/year in 2010–2020, top locations tripled over 20 years — that is your realised long-term gain.
−9 to −12 %
Nationwide after the interest-rate turn: condominiums around −9 %, houses down to −12 %. ECB's first hike 27 July 2022, key rate 4.0 % from September 2023, trough Q3/2023 to early 2024 — proof of the cyclicality.
+2–4 %
Expected for Dresden in 2026 (a forecast) — in the plus for the first time since the correction. The recovery has run since Q4/2024, but at a level no one can guarantee as a peak.
I have described the mechanism behind the correction — why rising interest rates feed straight into the achievable price via the buyer's monthly payment — in detail under Sale price & interest rates 2026. In short: the gain is made, and the across-the-board price jumps of the boom years are over.
Why Dresden stands firmer than the national trend
Dresden is not just any market that merely follows the interest curve. Beneath the city lies a structural demand engine found in few places in Germany in this form — the Silicon Saxony semiconductor cluster. It made the market here turn earlier and more steadily than elsewhere.
ESMC semiconductor plant
Around €10 billion in investment, roughly 2,000 new jobs by the end of 2027 — well-paid specialists who demand housing.
Silicon Saxony cluster
From around 82,500 to more than 100,000 jobs as the target — Europe's largest microelectronics location keeps growing into the region.
What this means for your property
Structural demand overhang
Through 2030, Dresden is short around 2,300 flats a year. This supply shortage acts as a price cushion — it supports valuations from below, independent of the interest-rate cycle.
Recovery already under way
Since Q4/2024 the market has turned upward again. So you are not selling into a falling movement, but at a level that has stabilised.
How deep the Silicon Saxony effect runs is covered in detail under TSMC & Silicon Saxony: the Dresden property market. The location-specific value basis of your plot is shown by the Dresden standard land-value trend.
The rational moment — for whom it matters
The rational moment — for whom it matters
“Selling now” is not a market forecast but a portfolio decision. For a long-term owner who wants to realise a large book gain, unwind a concentration risk, or gain liquidity and peace of mind in later life, the recovered level is a rational window — precisely because no one can guarantee the next peak.
Conversely, just as honestly: anyone who holds the flat as a solid running income, draws no tax advantage from the period and has no diversification problem need not rush anything. The market does not force you. This page only helps you anchor the decision to the right variables: your portfolio, your age, your tax position.
Exiting tax-free: the ten-year rule (§ 23 EStG)
The often decisive lever lies in tax law. Under § 23 of the German Income Tax Act, the capital gain on a privately held property is tax-free once more than ten years lie between purchase and sale. Many owners who bought 10 to 25 years ago fall exactly into this situation — the entire increase in value then remains tax-free.
Two points many overlook
Inheritance: the period continues
For inherited properties, the testator's ten-year period continues to run — you do not start from zero. The deadline has often passed closer than heirs think.
Calculate before instinct
Whether the gain is really tax-free depends on the exact date and the use. Check it with the calculator and have it confirmed by a tax adviser before you act.
Check whether your gain is tax-free after the period in the ten-year rule calculator (tax-free sale). In practice this also works with a running tenancy — how to sell a let property without losing the tenant is explained in its own guide.
Tax note: Non-binding guidance, without warranty – not a substitute for tax advice.
Three questions that matter — not the market
Once you have answered these three questions for yourself, the sale decision is usually clear — without trying to catch the perfect day.
Portfolio: how big is the concentration risk?
Is a large share of your wealth tied up in a single Dresden property? Profit-taking turns a book gain into real, spreadable liquidity — noticeably lowering your single-asset risk.
Age & life stage: do you still want to manage?
Letting means effort: tenant changes, renovation, administration. Anyone seeking calm, predictability or liquidity for retirement often chooses to exit deliberately at the upper end of the cycle.
Tax & yield: what remains net?
Once the ten-year period has elapsed, the gain stays tax-free. Weigh the running net rental yield against the return the freed-up capital could earn elsewhere.
What your Dresden investment property is really worth today
Before you decide to hold or sell, you need a reliable figure — not the gut feeling from the purchase and not the online average. I determine the achievable value on the basis of current Dresden market data, free of charge and without sales pressure.
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