Vienna/Salzburg (OTS) – Decreased demand and prices for property are leading to shakeouts in the industry. Business and retail are also affected. “We expect a change in the second half of 2024; development will become more dynamic again
“, Georg Spiegelfeld, President of Immobilienring Austria, assesses the market situation optimistically. After purchase prices reached a peak in recent years, Thomas Lainer, Vice President of Immobilienring Österreich, is convinced that they will now adjust to the actual value. “The bottom will soon be reached
Lainer is sure. The buyer principle leads to a greatly reduced supply of advertised rental apartments in Vienna. Spiegelfeld reports a decrease of up to 50 percent, depending on the rent level.
“It is currently difficult for our industry and adjustments will still take place. But now it’s time to persevere,” appeals Spiegelfeld. Companies that have financial creditworthiness continue to work on their projects in a countercyclical manner. The demand for rent remains unbroken, with rental prices rising primarily due to index adjustments. A lot has been built in Vienna in recent years, so prices have remained stable. Where more expensive rents are charged, there is also a high standard of construction.
Buyer principle reduces housing offers in Vienna by 25 to 50 percent
Since the introduction of the buyer principle, the offer on platforms for apartments renting up to €1,000 has been reduced by 50 percent, and for apartments in the €1,000-€1,500 range by 25 percent. The advertised offer is stable from €1,500. Regarding the consideration of the buyer principle, Spiegelfeld says: “We constantly screen the advertisements for compliance with the buyer principle, iR members as well as most other real estate agents work in accordance with the law.
“
Facebook groups are expanding
Offers on Facebook have increased, and Facebook groups where apartments are offered and searched for are constantly expanding. The rental offers come from previous tenants or owners who have purchased apartments as a private investment in recent years. “In our ongoing screening, we often observe excessive prices for apartments that are subject to the MRG, but also rent levels that bear no relation to the standard of the offer. It is definitely advisable to be careful about fake offers,” says Spiegelfeld. Since 2023, offers for condominiums and single-family homes have been increasing, even in the higher price segment. “From a purchase price of €400,000 onwards, interest is usually manageable,” says Spiegelfeld. “Many sellers are not yet aware of the changed market situation
“, adds Spiegelfeld.
Stable rental offer in Graz, Linz, St. Pölten
The rental apartment supply in Linz is stable year-on-year as of November 2022; several larger residential projects have been completed in recent years. However, the cheaper rental range up to €750 has halved compared to November 2022. The situation is similar in Graz (but still in the cheaper range) and St. Pölten. In Klagenfurt, the advertised rental offer for apartments renting up to €1,000 has almost halved. Linz recorded the biggest drop in purchase prices, with a decline of 10 to 20 percent. “Linz was a moderately priced market for a very long time and was considered an insider tip,” explains Lainer. “Markets that move late are the first to lose when the trend changes
“, continues Lainer.
Hardly any new construction for Innsbruck and Salzburg and further tightening
The two state capitals of Innsbruck and Salzburg have been leading the housing price rankings for both property and rent for many years. Living space, which was already scarce, is becoming even more scarce as demand increases. Therefore, rental prices usually vary regardless of the building standard. There are currently around 80 rental apartments advertised on platforms in Innsbruck (a decrease of around 20% compared to 2022) and around 150 rental apartments in Salzburg (a decrease of 50% compared to 2022). Offers on social media are also rare for these two cities. “A sad record,” summarizes Lainer.
Very expensive or very cheap works when it comes to property
“Very expensive or very cheap apartments work when you buy them, that applies throughout Austria,” say Spiegelfeld and Lainer in unison. Penthouse apartments are usually sold off plan because the clientele does not have to finance, just transfer money. “Everything that lies in between is there,” Lainer continues. In Salzburg, for example, with the current price per square meter for new buildings ranging from €8,000 to €10,000, garconnieres are in demand. They are small and if they are in a “worse” location within the residential building, there is scope for pricing. Objects used for tourism, which have so far been a sure-fire success, must be economically feasible before they can find buyers. Logistics properties are experiencing good demand. Retail is currently having a very difficult time, especially in buildings that are listed buildings. Modern companies, whether catering or retail, need modern space.
More dynamics from mid-2024
Rental prices will rise above indexation next year. This allows investors to slowly generate positive returns again. Due to the lack of completions in the new construction segment, the supply of rental apartments in Salzburg and Innsbruck will continue to decline. It takes around 2-3 years from planning to building permits to completion. In the meantime, the existing backlog continues to grow. Real estate developers are still under pressure in the first half of the year. The low point in sentiment will not occur until the end of the first quarter. “In the second half of 2024, interest rates are expected to fall to a medium level, then developments will become more dynamic again,” Spiegelfeld is convinced. “If the monthly financing rate is manageable again, then home ownership will be purchased again
“, says Lainer.
Real Estate Ring Austria
The member companies of the Immobilienring Österreich are independent companies that have formed themselves as an association and work together throughout Austria. In order to join the Austrian Real Estate Ring, brokers must have been active on the market for at least five years, have a fixed office location with a professional office structure, have a broker’s license, have liability insurance against financial losses and of course be committed to the broker’s code of honor. They work under a common understanding of quality standards and responsibility towards their clients. Further information at: www.ir.at
Questions & Contact:
Press Office Immobilienring Austria, Andrea Baidinger
andrea.baidinger build living real estate communications consulting GmbH
Tel +43 699 100 76 145, baidinger@bauenwohnenimmobilien.at