Speculation scandal in Favoriten: Apartments fall into disrepair, tenants flee!

Speculation scandal in Favoriten: Apartments fall into disrepair, tenants flee!

In Vienna, two suspected objects of speculation are the focus of attention: the buildings onReumannplatz 2andBuchengasse 88–90. Both properties are in questionable condition, leading residents to look for more suitable housing options. This reports meinkreis.at.

The building at Reumannplatz 2 is owned by theMauerwerk Reumannplatz 2 Development GmbHoperated, which belongs to the masonry network. This company is criticized for using real estate for speculative purposes and for not maintaining it adequately, which leads to the substance of the buildings falling into disrepair. professorGunther Maierfrom the real estate industry points out that it is economically more advantageous to demolish buildings without long-term tenants and build new ones. The Mauerwerk management has not yet commented on the allegations.

The condition of the properties

TheBuchengasse 88–90is also affected. Here there are windowless holes and an eroded roof, while much of the building stands empty. Only part of the ground floor is used as a warehouse; the operator reported water damage, which repeatedly causes problems. Here, too, there are police operations because of homeless people who use the building as a place of refuge. The owner,Cakmak Umut, has plans for a renovation, but these are on hold due to the tense economic situation.

The general conditions on the real estate market are currently anything but rosy. Loud DIW Berlin The market conditions for developers, buyers and tenants have deteriorated significantly in 2022. With the end of the European Central Bank's purchase programs and the first interest rate increase in over a decade, financing for construction and purchase projects has become more expensive. The inflation rate has greatly reduced the purchasing power of many households.

A difficult market

Across Austria, especially in urban areas, there is a trend towards purchase prices falling more sharply while rents rise. According to current analyses, the prices for building plots, homes and condominiums in over 150 cities have fallen by around two percent, but overall they remain at a higher level than before the market upswing in 2010. Rents, on the other hand, have risen by an impressive 53 percent in the same period, and by three percent in 2023 alone.

The current real estate market shows that there is a lack of affordable housing in many cities. Vacancy rates are at historically low levels, indicating a tight housing market. Some experts warn that this development points to speculative price exaggeration - a reality that is becoming apparent not only in Vienna, but also in other major European cities.

Real estate speculation is a topic that not only interests investors, but also has social and economic effects. It refers to speculation in real estate with the aim of making profits, whether through undeveloped land or existing properties. This form of speculation is often characterized by market distortions. Even historical examples, such as the Roman Senate resolution of 47 BC. BC, which banned the speculative acquisition of real estate, show how this phenomenon occurs again and again. How Wikipedia emphasizes, the location of a property is decisive for its price, and especially in metropolitan areas the demand is significantly greater than the supply.

The current developments in Favoriten make it clear how strong the imbalance on the real estate market also has local effects. If solutions are found here, it will become clear whether the deterioration of these urban buildings will continue or whether renovation measures can be fruitful.