Housing prices in Austria continue to rise: the reasons
Housing in Austria continues to rise in price. During the first quarter, the price of properties rose by almost 11% year on year. These figures were the highest for the market since 2012. Moreover, the slowdown of the economy and the effects of the pandemic had no influence on the dynamics.
The Austrian capital grew by 3% quarterly and 9.5% year on year. In the other regions of the country, the price increase was recorded at 12.5%. By comparison, last year’s increase was about 3%.
Interestingly, new buildings are in less demand than secondary housing. The first gained at price by only 1.8%, while the second showed a rise of 7.5%.
Over the past year, the cost of private homes on the secondary market has increased by 6.3%, and apartments have risen by 8.5%. These figures exceed the results of 2020, the average price of apartments has grown by 6%.
Despite the increased demand and rising prices, the construction segment has slowed its development. Over the past year, the number of permits issued for the construction of residential real estate has decreased by 4%. A total of 74,763 permits were issued. At the same time in 2019, there was a rise in construction, then the number of requests increased by more than 11%.
According to information from the European Central Bank, over the past month has been granted mortgages worth 127.7 billion euros. This figure is 7.5% higher than last year’s results.
As for the Austrian economy, it shrank by 6.6 percent in 2020. This is primarily due to the consequences of the pandemic and the measures that had to be introduced to combat the disease. Exports are the key area of focus for the economy, and Germany is its main partner.
According to this year’s forecasts, the Austrian economy will resume its growth, helped by active vaccination and a decline in coronavirus outbreaks. The European Commission expects the country’s GDP to increase by 4.3%. Last year’s growth was at 3.4%.
Rents in Austria have been rising since 2020. Across the country, it showed an increase of 1.7%, and in the capital – 6%.
The price of an apartment in the secondary market last year was 1830 euros per square meter. In new buildings, the average cost was €2,890 per square meter. Townhouses rose in price by 3.7%, to 1,880 euros per square meter, and detached single-family homes – by 4.5%, to 2,040 euros per square meter.
Renting an apartment will cost an average of 8.5 euros per square meter per month. In Vienna, rates will be from 10 euros per square meter.