The construction package is a good first step, but does not go far enough for the private real estate sector. Densification makes up to 100,000 additional apartments possible in Vienna alone. However, this requires simplifications in, for example, building regulations.
“An accurate award, the renovation of the existing property and new living space through additions and extensions – which would bring momentum to the overall market without additional financing,” emphasizes Michael Pisecky, chairman of the Vienna property managers. Without new infrastructure costs, 60,000 new non-profit apartments would only be possible in the federal capital; there is also potential in other metropolitan areas. He therefore calls for a “commitment to densification” for non-profit housing developers.
“But commercial project developers could also participate, but the restrictions in building regulations and zoning plans must be urgently lifted.” Because these sometimes make it impossible to densify and thus reduce land use. In the private sector, up to 40,000 additional apartments would also be possible in Vienna, making a total of 100,000 homes in the federal capital alone. “At the moment we often only have greenfields left to build on.” However, this is currently hardly affordable due to high land prices and increased construction costs. The government’s estimated one billion euros for the construction and renovation of 25,000 apartments only affects the public sector, i.e. cooperatives and non-profit organizations. “With the currently available construction package, not a single private apartment will be created,” says department chairman Gerald Gollenz concerned.
New construction production will decrease by 86 percent by 2025
The sector also expects a dramatic decline in new commercial housing construction as a result of the crisis. Private providers currently build 30,000 new rental and owner-occupied homes every year; in 2025 there will be only more than 4,000. “That is an expected decrease of 86 percent. We are the largest home builder in the republic and we are running out of steam,” says Gollenz.
“The approximately 8,000 not-for-profit apartments built and renovated each year will not be able to cover the shortfall in supply compared to demand,” Pisecky added. Last year, private individuals built two-thirds of the apartments and not every second person from the bottom half of the income group lives in a non-profit housing development.
Gollenz is convinced that the kit can only be a first step. Although the shorter depreciation of real estate objects and the eco-surcharge for environmentally friendly measures are very welcome, this will not save private companies. Johannes Wild from the Lower Austrian Real Estate Managers: “Access to subsidies and loans must also be made easier for us, not only for private house builders and non-profit organizations.”
“Quick clarity about measures”
Removing the land registry and lien rights for the first home up to an exemption amount of 500,000 euros naturally also helps private individuals. But clarity must be provided very quickly, otherwise too many people will wait. “We can’t afford that if everyone waits for months. Ideally, the deletion should apply from tomorrow,” says Gollenz. Announcing this and then taking the time to implement it has a direct impact on buyer behavior. Therefore, at least this part of the package must be decided very quickly.
Commercial landlords would obviously not be happy with a vacancy tax, which is also being discussed, to combat the housing shortage. “From a commercial point of view, vacancy is never desirable anyway,” Pisecky emphasizes.
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.
