Austria's real estate market: New hope after the Ice Age!

Austria's real estate market: New hope after the Ice Age!

The cold period on the Austrian real estate market finally seems to be over. With increasing demand and stable prices, there is renewed hope for buyers and investors. How ad hoc news reports, two thirds of market participants are now optimistic about the next three years. A survey result by IMMOunited shows that 87 percent of international investors view Austria as an attractive destination - a significant increase of 26 percent compared to the previous year.

After falling since the third quarter of 2022, prices are now gradually stabilizing. Experts expect a moderate increase of 0.5 percent for 2025, which could rise to up to three percent annually from 2026. This trend is particularly clear in Vienna, where demand for condominiums increased by a whopping 23 percent in the first half of 2025. Recent price developments are also characterized by a 1.6 percent decline in residential property prices in 2023 and a further 2.1 percent decline in 2024, mainly due to falling interest rates and an exciting market environment.

Growth despite challenges

The expiry of the strict KIM regulation and cheaper interest rates, which have been available since mid-2024, improve financing options. Nevertheless, the new building is shaking. Forecasts suggest that fewer than 50,000 new residential units will be created in the coming years - a drastic decline from over 70,000 completions in 2022 and 2023. This shortage of supply could further increase price pressure in metropolitan areas, which poses major challenges for many households.

The federal government is now helping with a comprehensive housing package. This includes two billion euros, with one billion euros for 20,000 new subsidized apartments, the renovation of 5,000 existing units and the elimination of land registry fees for the first 500,000 euros of purchase price. Vienna is also introducing new building regulations that stipulate a two-thirds quota for subsidized housing, which is positive news for many potential buyers.

Price increases on the rental market

As far as rents are concerned, there is a clear trend towards increases. Particularly in Vienna, tenants have to expect above-average price increases for new contracts. While rental prices on the free market are rising, apartment prices are stagnating in some cases. Rental yields are showing an increase despite falling house prices, suggesting that investors continue to bet on the housing market.

Interestingly, there are also regional differences in the real estate market. Loud Infina For example, prices are rising significantly in Salzburg, where rental prices are also rising sharply. In Upper Austria, on the other hand, increases in condominiums can be observed in certain districts, while other regions record moderate increases in rental prices. The ongoing price dynamics in major cities are also fueled by the growing ESG criteria, which are increasingly becoming standard.

Overall, the Austrian real estate market remains exciting and promising. With political decisions designed to rapidly advance subsidized housing projects and changing market conditions, buyers and sellers can expect a lively real estate market in the next few years. For further information on price developments, we recommend taking a look at immopreise.at.