The price of property rose on a nationwide average of between 3.7 percent (terraced houses) and 4.6 percent (used condominiums) compared to 2019; Building land was 7.5 percent more expensive, free rents rose by only 1.7 percent, but in Vienna by 6 percent.
“In spite of many prophecies of doom, the real estate industry was a big, strong supporter of the economy and made a significant contribution to the gross domestic product – the Austrian real estate market is a very stable one, compared to other OECD countries the one with the most stability”, said the chairman of the professional association Real estate and wealth trustee in the Austrian Chamber of Commerce (WKÖ), Georg Edlauer, in a press conference on Monday afternoon.
The number of real estate transactions rose year-on-year by over 3 percent to around 120,000, of which around 52,000 were for the sale of new and used condominiums and 20,000 for building plots. Overall, the income remained the same in the previous year and the savings have increased – “a substantial part of this money goes into real estate, with at the same time generous lending by the banks”, said the Viennese group chairman Michael Pisecky. The demand is strong. At the same time there is the possibility of getting cheap financing.
Larger apartments in demand
“It was a special year – a year of the pandemic, the home office, the exit restrictions. Accordingly, the desire to live was subject to change,” emphasized the chairman of the association, Edlauer. “Everyone has a home, but very few are designed to run an office there.” They were looking for larger apartments with an extra room “so that you don’t have to clear the dining table in the evening”. The desire for open spaces such as a balcony, terrace or private garden has also increased. “What was also to be noted in the vicinity of the metropolitan areas: This radius has grown again compared to the previous year.” This is probably due on the one hand to the lower prices if you drive another 15 minutes, and on the other hand to the assumption that home office will continue to be important. “The pandemic has made housing much more important,” affirmed Pisecky.
Increased demand in the Waldviertel
Even the Waldviertel – once a dreamy peripheral location for the weekend retreats of stress-ridden city dwellers – experienced a real boom, according to the information. “Up until a year ago it was unthinkable to sell a property there as a broker,” said Lower Austrian professional group chairman Johannes Wild. “There is huge development, of course starting from a low level,” the real estate expert put into perspective. 80 percent are actually main residences there. “Twenty years ago it was exactly the opposite.” Before the pandemic, you could still taste and have a large selection.
In Austria-wide average, a used condominium cost 1,831.22 euros per square meter in the first Corona year 2020 – that was 4.6 percent more than in 2019. First-time apartments cost 2,888.54 euros per square meter and thus 4.2 percent more . The price for row houses went up by 3.7 percent to 1,873.06 euros, that for single-family houses by 4.5 percent to 2,042.94 euros per square meter.
Land cost an average of 303 euros per square meter
In Vienna, first-time owner-occupied apartments rose by 4.7 percent to an average of EUR 4,237.09, used apartments by 4.4 percent to EUR 2,930.20, terraced houses by 2.3 percent to EUR 2,476.14 and single-family houses by 4.2 percent to 2,775.64 euros per square meter. As a “dampening factor”, Pisecky cited the fact that in Vienna, two thirds of new buildings have to be subsidized based on the dedication, and also “the price dynamics in terms of building costs”, i.e. the rising building prices. Furthermore, “the affordability of the apartments will certainly become an issue”.
In 2020, building plots were available for an average of 303 euros per square meter in Austria, compared to just 281.97 euros in the previous year. There is “a wide spread” in terms of prices – in St. Pölten an average of 140 euros was to be paid, in Innsbruck and Salzburg, on the other hand, the square meter prices were over 1,000 euros. There are also big differences between the federal states – with an average of 90 euros in Styria and 730 euros in Vienna. Even within a federal state there is a range of, for example, 34 euros in Gänserndorf and 400 euros in Mödling. In general, it was observed: “The cheaper locations have become more expensive, the more expensive have tended to move sideways,” reported Edlauer.
Salzburg overtaken by Innsbruck
Across all of the provincial capitals, however, there were large increases in land prices between 6.3 percent (Bregenz) and 10.6 percent (Innsbruck). The previous leader Salzburg with 1,002.4 euros (plus 6.4 percent) was overtaken by Innsbruck with 1,012.2 euros. Vienna is “only” in third place with an average of 728.5 euros (plus 9.7 percent). “That arose from the district mix,” explained the WKÖ real estate expert, referring to prices of 2,200 euros per square meter for properties in the 19th district (Döbling). The plots of land in the state capitals in St. Pölten were the cheapest at 138.5 euros, but with a very significant increase of 9 percent. This is “also an effect of moving to the country, where infrastructure is also sought”.
“Houses and land away very quickly”
For rented apartments that are as good as new that are not subject to the upper rent limit according to the Tenancy Law (MRG), a nationwide average of 8.51 euros net per square meter (plus 1.74 percent) had to be paid in 2020; in Vienna, however, it was 10.22 euros (plus 6 Percent). Rents are unlikely to increase significantly in the future: “We are expecting real price pressure in the rental market,” said Pisecky. “Students stay at home, large shared flats are being returned and there are hardly any ‘expats’ due to the pandemic – apartments are coming back within the existing stock,” explained the chairman of the Viennese group. “The rental market is on the move.”
“You will find very few properties and houses to buy, they are gone very quickly – but you will find a lot of rental apartments,” says the real estate market expert with a view to supply and demand. “There are not many who are selling their property and there are particularly many who want to improve their living conditions now.”
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