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New residential construction in Vienna is collapsing dramatically - rents continue to rise!
Vienna will experience a sharp decline in new housing construction in 2025, while rental prices will rise. Forecasts point to ongoing challenges.
New residential construction in Vienna is collapsing dramatically - rents continue to rise!
In Vienna, the development of the housing market is anything but rosy. Current reports from ad hoc news According to this, we will see a dramatic decline in new residential construction in 2025. Only 8,800 new units were completed this year, which represents a decline of 20 percent compared to the previous year. According to other analyses, the number could even be a maximum of 11,000 completions, which means a decline of 33 percent compared to 2023.
The privately financed rental sector is hit particularly hard. New construction output here is more than 50 percent below the five-year average. The reasons for this development are diverse: increased construction costs, high interest rates and stricter lending guidelines are putting many property developers under pressure. Some large projects were therefore stopped or even canceled.
Rental prices continue to rise
The effects cannot be ignored: asking rents in Vienna rose by nine percent last year and now amount to an average of 20.42 euros per square meter gross. Statistics Austria confirms that the Austrian average rent exceeds the 10 euro mark per square meter for the first time. RE/MAX's forecasts, which predict further rent increases for 2025, are particularly worrying: in central locations of up to 6.9 percent and on the outskirts of the city even by 6.1 percent.
As rental prices continue to rise, the condominium market is showing early signs of recovery. Purchase prices have risen by around five percent to an average of 6,500 euros per square meter. In the inner city, condominiums cost over 16,000 euros per square meter, while in cheaper districts such as Favoriten they are still 3,600 euros.
Structural undersupply remains a problem
The forecasts for 2026 are also not very encouraging. Experts expect a new construction output of only around 10,000 new units and a continued increase in rental prices. In addition, the structural undersupply on the housing market is expected to continue to worsen. Even if building permits increased slightly in the first half of 2025, it takes years until new projects are actually ready for occupancy.
In Vienna, new construction is increasingly concentrated on the outskirts, while the inner districts are increasingly becoming a scarce commodity for housing. Industry experts are therefore urgently calling for political measures to accelerate dedication and construction processes and to revise cost-increasing building regulations.
In summary, the housing situation in Vienna is becoming more difficult - for both renters and apartment buyers. The entire issue not only leads to uncertainty when looking for an apartment, but also raises questions about the sustainability and future of urban housing development.