Vienna real estate market: Industry gives the all-clear

A recent article by the news agency Bloomberg, in which Vienna was described as the “epicenter of the real estate crisis in Europe”, caused a great deal of excitement in the Austrian real estate industry. According to their analysis, the property prices down 12 percent since peaking in 2022.

The economist Michael Klien from the Austrian Institute for Economic Research (Wifo) puts it into perspective. He grades the Vienna real estate market as stable to slightly declining and sees price declines of two to three percent.

all clear

The VÖPE – Association of Austrian Project Developers and the ÖVI – Austrian Association of the Real Estate Industry are now raising their voices together. ÖVI President Georg Flödl explains: “As the most important real estate market in Austria, Vienna is still showing strong population growth and good demand despite a certain amount of caution due to interest rate increases. There are no signs that Vienna is developing significantly worse than other markets in Austria or Europe.”

Evaluation

A special evaluation of the property developer database Exploreal at the request of the associations paints a different picture than Bloomberg. According to their data, the asking prices of new construction projects increased nominally in the period May 2022 to May 2023 and did not decrease. Exploreal determined an average owner-occupier asking price for Vienna of EUR 6,714 per m² in May 2022 and 7,200 euros per m² in May 2023. This corresponds to an increase of 7.2 percent.

situation remains challenging

The market situation remains challenging, partly because of the strict lending rules. But: “The fact that institutional investments in real estate are falling due to the rise in interest rates because other forms of investment are becoming more attractive is not specific to Austria or Vienna. Confidence in the Viennese real estate market is still high,” says VÖPE Presidential Spokesman Andreas Köttl.