Commercial real estate in Austria is in demand among foreigners
In recent years, commercial property in Austria has attracted much interest from investors. This European country has many advantages for profitable investment, mainly economic stability and a developed tourism sector. The availability of many resorts has led investors to take a closer look at the hotel sector.
In the first three months of 2022, the volume of transactions in the commercial property market stood at €230 million. Towards the end of the period, there were several large sales in the sector with a total value of over €400 million, well above the market volume of previous years.
The hotel sector was the focus of investor attention, with some large complexes finding new owners. In addition, there is a growing interest in mixed-use properties combining hotel and entertainment services. Examples of transactions include the Das Sonnreich thermal spa complex and the Grand Prix Hotel in Spielberg.
Commercial real estate in Austria overview
Experts note that in 2022 not only the preferences of buyers have changed, but also their type. Over the past two years, the Austrian market has experienced a lull in foreign investor activity. However, in 2022 and 2023, there is a clear increase in buyer activity from other countries, especially Germany and Israel. Demand for property has increased among Austrian investors, who account for around 40% of all commercial property transactions. Experts note that institutional investors and private buyers are gradually returning to the market. And both are looking at leisure hotels.
One of the key issues for buyers of Austrian real estate is loan terms. Over the past year, the regulator has repeatedly revised interest rates, which has led to a change in the financing rules. Banks now consider each application for a hotel loan on an individual basis.
Residential property in Austria has continued to grow steadily over the past few years. In the first three months of 2002 alone, market prices rose by more than 12%, with villas and townhouses outside the capital increasing by 16%. The value of new buildings in Vienna has risen by almost 13%.
In 2021, buyers preferred houses in the suburbs to apartments in the city centre. A similar trend is still evident today, but increased demand is pushing up prices in this sector. Over 2022, houses in Austria have increased in price by 13%. The average price of the object is 347 thousand euros. The biggest price increase is in Tyrol, where houses cost more than 2 million euros. The cheapest homes are sold in Burgenland, at around 192 thousand euros.