Trend reversal in real estate prices: “Cooling down instead of inflating”

For ten years, the prices for houses, apartments and land in Austria have only been going in one direction: upwards. It should be over this year, although prices remained at a high level, said Remax Austria Managing Director Bernhard Reikersdorfer at an online press conference. The market is consolidating, a phase of overheating is followed by a cooldown. The basis for the forecast is traditionally a survey of 600 Remax experts.

Reikersdorfer justified the trend reversal with a mix of factors. Firstly, supply is increasing significantly (by almost eight percent), secondly, demand is falling by eleven percent. As a result, the price trend is pointing downwards.

Thirdly, the mixed situation surrounding a corona pandemic that is not yet over, the Ukraine war, energy prices and inflation are having an impact on the real estate market. And fourth, the rate hikes by the European Central Bank and the strict lending guidelines in Austria would slow things down.

While in the past few years only the question of intensity was asked, the motto now is “cool down instead of blow up”. There were first signs of this in the second half of 2022. While demand exceeded supply until the summer, the relationship reversed from around August, Reikersdorfer said.

Of the 17 real estate categories examined, 14 are expected to fall in price this year. Remax only expects a slight price increase for rental apartments in central locations and on the outskirts as well as for building plots.

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Martin Roithner

Editor Economics

m.roithner@nachrichten.at

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