Vienna in real estate chaos: prices are exploding, new construction is collapsing!

Vienna in real estate chaos: prices are exploding, new construction is collapsing!

Vienna is currently experiencing a paradoxical situation in the real estate sector. While demand for condominiums is increasing by a whopping 23 percent, new construction has seen a dramatic decline. How ad-hoc-news.de reports, this is leading to skyrocketing prices and an impending housing shortage, which could become a serious problem for many Viennese.

Rising prices and housing shortages

In eleven districts, a 70 square meter apartment now costs over 500,000 euros. These price increases are a direct result of low supply not being able to keep up with continued high demand. The influx to Vienna continues unabated, supplemented by the end of the strict KIM regulation in June 2025 and stabilized interest rates. These factors are leading to more and more people moving to the city, which is putting further pressure on the housing market.

The Vienna Chamber of Commerce has already forecast a declining completion rate: a decline of 38 percent is expected for 2025 compared to the previous year, and for 2026 the number could even reach 40 percent. This development is causing many private developers to massively withdraw and building permits have been steadily declining since 2023.

Infrastructure and construction costs

The causes of the construction crisis are complex. Construction costs have risen to record levels, while the after-effects of the KIM regulation are making many projects incalculable. In addition, regulatory hurdles make renovations and densification more difficult, which means that construction activities are increasingly being relocated to the outskirts of the city. Many projects simply no longer pay off. Long lead times further compound the problem.

Forecasts indicate that the residential real estate market could experience a renewed upswing by 2026 at the latest. But this could become a social explosive because the shortage affects all segments of the market. Buyers are increasingly turning to the rental market, which is also driving up prices there.

Vigilance is required

The market conditions are changing noticeably: While there is still room for negotiation with existing properties, the sellers dictate the conditions in new buildings. Industry associations are urgently calling for a reduction in bureaucracy and practical solutions in housing policy in order not to endanger Vienna as an affordable metropolis. The window of opportunity for moderate prices is quickly closing for prospective buyers, and the transition from a buyer's to a seller's market is already in full swing.

Vienna faces a challenging future in the real estate sector, which presents both risks and opportunities. It remains to be seen how politics and business will react to these developments in order to avert an acute crisis and secure housing supplies in the city.