20 percent more expensive compared to 2010: fewer and fewer can afford real estate

The decline in real estate prices in 2023 and 2024 (a total of minus 3.2 percent) only brought a brief sigh of relief. In 2025 prices went up again (plus 2.6 percent). After all, the bottom line over the past three years is an increase of 20 percent in terms of affordability – also due to the sharp increase in income.

The long-term comparison, of course, puts the relaxation in the past three years into perspective. “On average, prices for residential property in Austria more than doubled from 2010 to 2025,” says economist Walter Pudschedl, referring to a 116 percent increase in the price of houses and apartments. The price per square meter for condominiums has even increased by 120 percent.

At the same time, the average net income of employed workers increased by only 73 percent, and by 20 percent since 2022. The real value of an annual income in relation to prices on the real estate market has decreased by around 25 percent over the past fifteen years, says Pudschedl. In 2010, 10 annual salaries were required to purchase a 100 square meter condominium, in 2025 it was 12.5 – and in 2022 even 16.

How long do you have to work for a building site in your community? Find out with our “subsoil calculator”. Simply enter the municipality and property size. The data is based on the average building land prices from 2020 to 2024 according to Statistics Austria:

Rent instead of buying

As a result of the long-term reduced affordability of a purchase, the demand for rental properties has increased and has triggered a rent increase that exceeds inflation. “This trend will continue in the coming years,” market experts expect. In the past three years, the affordability of rental properties has “decreased significantly,” according to Bank Austria economists.

There was a significantly higher dynamic in new rentals compared to existing rentals. On average, rents have risen by 20 percent. Existing tenants with an income increase of 20 percent since 2022, however, left neutral.

Prices continue to rise

According to Bank Austria economists, real estate prices are likely to continue to rise by between 2 and 3 percent this year and next year – around the level of general inflation. Construction prices, which have hardly changed in the past two years, “will show an upward trend” because the renewed energy price-related inflation shock caused by the Iran war will increase material costs and, with some delay, wage costs.

“The demand- and cost-related increase in real estate prices in the coming years will also be fueled by a tight supply, as a result of low completions after the collapse in building permits from 2022,” emphasizes Bruckbauer. The “sustained high rental price dynamics” due to demand promise “an attractive return development”, which in turn should strengthen the purchase of home ownership for investment reasons – despite a possible increase in key interest rates by the European Central Bank (ECB) in response to the consequences of the war in the Middle East.