New construction in Austria: Housing shortage continues to grow despite subsidies!

New construction in Austria: Housing shortage continues to grow despite subsidies!

In Vienna, housing construction shows mixed numbers. New building subsidies experienced an upswing in 2024, shining a ray of light into the already tense housing situation. According to Trend, there were a total of around 19,200 funding commitments, which corresponds to a pleasing increase of 13 percent compared to the previous year. Expenditure on housing subsidies also climbed by 14 percent to 2.51 billion euros, returning to the level of the early 2010s.

Particularly noteworthy are the large-volume new building subsidies, which have increased by 27 percent. Association chairman Robert Schmid is optimistic and emphasizes that this upward trend could help eliminate the housing shortage. But he also warns: In order to stabilize construction production and create affordable living space, innovative approaches must be taken and construction costs kept under control.

Renovation statistics and loan interest rates

The situation is completely different in the area of ​​renovation funding. The statistics show a relaxation here, but this cannot be seen as positive. Expenditure on renovations fell by 6 percent to just 650 million euros and a total of 2.15 billion euros flowed into renovation projects, including state funding. The decline in this area raises questions, especially in view of the high loan interest rates and the increased construction prices due to the KIM regulation, which are severely depressing building permits.

With 51,500 building permits in 2024, the number is around a third below the ten-year average. The housing construction rate – the number of residential building permits per 1,000 inhabitants – was 3.5 nationwide, with Vienna taking a leading position with 4.5. This makes it clear that the capital is doing a lot right in terms of housing policy, while Carinthia (2.7) as well as Salzburg and Styria (2.9 each) are lagging behind, as OTS reports.

Outlook into the future

The course for the coming years is therefore in jeopardy. Schmid warns that a technology-open approach should be taken to assess CO2 emissions over the entire life cycle of living space. If politics shifts towards more sustainable building materials, emissions could be reduced, but the associated costs for the construction industry would have to be viewed with caution. This balance could be crucial to avoid market restrictions and sustainably combat the housing crisis.

Given these key data, it is clear that Vienna and the rest of Austria are facing enormous challenges. But with a good hand in politics and the construction industry, it could be possible to set the course in the right direction. So it remains exciting to see how the housing market will develop in the coming year.