The war in Ukraine, high inflation, rising interest rates and tightened credit guidelines are causing a turnaround in the real estate market. For the first time since 2015, prices are likely to be pushed down this year. On the other hand, slight price increases are expected for rental apartments in central locations and on the outskirts and for building plots.
Real estate association Remax’s price expectations for 2023 are minus 6.8 percent for real estate. Commercial properties such as shops and office space are likely to be hit the hardest.
The price has risen steadily in recent years. 600 real estate experts were interviewed for this assessment. According to them, demand will fall this year, namely by 11.2 percent. At the same time, the supply of real estate will increase. “This is a situation we’ve never had before,” says Remax expert Anton Nenning.
The middle class can afford less real estate
The increasing supply has been attributed to the fact that many sellers waited to see how prices develop and held back real estate as a result. Some people are also forced to sell for financial reasons. On the other hand, according to the experts, the falling demand is mainly due to the fact that the middle class can afford less real estate. The tightened requirements for lending since August 2022 would also play a role. However, Remax boss Bernhard Reikersdorfer expects these guidelines to be adjusted in the first quarter of 2023. Then it would be easier for many people to get a loan.
Looking at the federal states, demand is expected to fall this year, especially in Vorarlberg and Tyrol. On the other hand, the smallest decreases can be expected in Carinthia and Vienna. However, unlike real estate, there should be slightly higher prices for renting, especially for rental properties in a central location and on the outskirts. The same applies to building plots this year.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
