Quo vadis property market: How are property prices developing in Vienna?
Vienna is growing. Reason enough to build more - or so you might think. But the fact is that fewer and fewer new builds are coming onto the market throughout Austria and the short supply will push prices up. Why has this happened and how will property prices in Vienna develop over the next few years? We look back and forward.
Property prices in Vienna: What has happened so far?
Now it's official. The figures from the Exploreal property developer database are out and make clear what experts have long suspected. The figures for new builds in 2023 were around 43,400 completed residential units, already showing a slight decline compared to previous years. However, the downturn is far from over: A lower completion figure with up to 10% fewer residential units is expected for 2024. According to Exploreal, we could reach the absolute low point in 2025. This means that even fewer residential units are in the pipeline for next year - as much as -38% compared to 2023. But what consequences could this development have?
Forecasts for the property market in 2025
The significant decline from 43,400 residential units (2023) to 39,100 (2024) down to 27,100 residential units (2025) could have far-reaching consequences. After all, all segments are affected by this development, i.e. privately financed and subsidised housing alike. Industry experts are therefore alarmed, just like Gerald Gollenz, Chairman of the Association of Property Trustees in the Austrian Federal Economic Chamber. "We are two minutes to twelve. There will be a problem at some point and housing demand will no longer be met."
Price trends: The logic of the (property) market
The consequences of this development: A shortage of supply leads to rising prices. Even if this is still relatively unnoticeable and supply prices are currently relatively stable, at least when it comes to property.
With the construction package, politicians have taken initial measures to counteract these developments. Accordingly, since the National Council resolution on 20 March 2024, certain ancillary costs for property purchases, more specifically the land register fee and the lien registration fee, have been eliminated.
What's next for the Austrian property market?
Some experts are already predicting that as soon as demand has stabilised and favourable conditions such as the construction package, falling interest rates and relaxation of the KIM regulation have been created, people dreaming of a new home will be delighted. However, the shortage of supply due to a decline in construction activity will inevitably lead to an increase in property prices. According to current data, this trend seems irreversible.
