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The value of a typical apartment has also fallen, according to a survey of land register data by the Remax real estate association. Above all, the strict lending rules would slow down the market while supply continues to increase.
In the first half of 2023, only 19,999 apartments were registered in the official land register for new owners. That is 23.8 percent less than in the same period last year, when there were 26,262 apartments. The last time fewer apartments were traded was in 2014. According to Remax, the price of a “typical condominium” has also fallen. While last year it was 257,943 euros, this year it is only 253,730 euros and therefore more than 4,000 euros less.
As a result of the lower quantities and prices, the total transaction value of all condominiums sold in the first half of 2023 also fell. The value fell from 7.55 billion euros in the same period last year to 5.60 billion euros. According to Remax, this roughly corresponds to the level of 2018/19. However, historically speaking, housing prices remain very high. Compared to five years ago, prices have still increased by 31.8 percent; in a ten-year comparison, they are up 59.2 percent.
High supply, low demand
A larger supply of condominiums is currently offset by subdued demand. The main reason for the lack of demand is the lending rules that have been tightened since last year. “Many people are currently having to postpone or completely give up their plans or dreams of owning property,” said Bernhard Reikersdorfer, Managing Director of Remax Austria. “The lending guidelines definitely need to be adjusted; the current regulations present even high earners with insurmountable hurdles in order to create property at a young age.”
Reikersdorfer is also concerned about developments in the new construction market, as it has declined sharply in recent months. “This will have a massive impact on the supply of new buildings in 2024 and beyond, because the population and their living space requirements are still growing.”
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