Rent cap in Austria: billions in savings for tenants in 2025!

Rent cap in Austria: billions in savings for tenants in 2025!

What is happening in terms of affordable housing in Vienna? On June 2, 2025, a press conference with the new SPÖ housing spokeswoman Elke Hanel-Torsch and Vice Chancellor Andreas Babler caused a stir. The urgent focus was on the issue of rent increases in the regulated area, which, according to Hanel-Torsch, have now been “intercepted”. The official line calls for a rent cap to keep an eye on rising costs. Since 2010, rents in Austria have risen by a whopping 70.3 percent, including 25 percent in the last two years alone. This puts many tenants in a precarious position, which is why Babler has decided: the next rent increase of 3.16 percent should be prevented.

A look at the numbers shows that tenants in Austria saved a total of 138 million euros in 2023 as a result of the government's measures. In concrete terms, this means that a tenant in an old building with a monthly rent of 700 euros can achieve almost 1,000 euros in savings by 2027. However, not all rental areas benefit equally; the free housing market has not yet benefited from these measures. Rents in old buildings, municipal and cooperative apartments will have to wait until 2024 until they are valued.

Planned measures to regulate rent prices

The government's current plans not only include a rent cap for the coming years, but also an extension of the minimum term of rental contracts to five years. Previously, the minimum period was three years, which, according to Hanel-Torsch, puts pressure on tenants. A rent freeze would be good news for tenants, as over 70 percent of them could benefit from it. In Vienna in particular, 77 percent of tenants benefit from these measures, while in Vorarlberg it is only 49 percent.

The reform plans also stipulate that rents may increase by a maximum of 2 percent over the next two years. Another important point is the harmonization of tenancy law, which also targets commercial rents in order to keep them affordable. However, critics complain that tenancy law in Austria is too fragmented, which does not make the situation any easier for many tenants.

Criticism and challenges

However, the new regulation is not only met with approval. The Austrian Association of the Real Estate Industry (ÖVI) expressed sharp criticism of the press conference and questioned the figures presented. It is emphasized that the benchmarks have been frozen since 2023, which could shake up the plans somewhat. Questions about heating systems, legal certainty and the supply of apartments remain unanswered.

An additional point annoys many tenants and experts: the new regulations on rent controls only apply to all category and benchmark rents as well as to cooperative and municipal apartments. New buildings are left out here - a fact emphasized by NEOS MPs. This development is also reflected in the current housing costs, which for many households take up a significant portion of their income and which are additionally burdened by high inflation. According to an analysis by Statistics Austria, this area includes all financial aspects of living, from operating costs to energy costs.

While the government is trying to stabilize the housing market and get rents under control, it remains to be seen whether the planned measures will actually have the desired results. The reforms initiated by Babler and Hanel-Torsch are the first step on a long path to more affordable housing in Austria.

Developments in the living sector are clearly a hot topic. The tenants' association is already offering free checks of rental contracts and rental prices in order to offer those affected support in this tense situation. The coming weeks and months will show whether the measures taken are sufficient to actually curb rising housing costs. One thing is clear: there is still a lot to do!