Prices for apartments and houses are starting to fall. The declines were largest in Upper Austria, Vienna and Lower Austria. However, domestic consumers cannot afford new housing: purchases have fallen by more than half.
The years of rising housing prices are over. According to calculations by the Austrian Statistical Office, houses and apartments in Austria will cost an average of 2.6 percent less in 2023. Prices for existing housing were 3.7 percent lower than last year, but for new-build apartments and houses there was only a slight decrease of 0.1 percent. According to experts, the decline was greatest in Upper Austria, Vienna and Lower Austria.
For comparison: In 2021 there was an average year-on-year increase in existing apartments and homes of 13.1 percent; in 2022 the increase was 11.6 percent. Last year the price curve pointed downwards: for existing apartments the decline was 4.3 percent, for homes this was minus 3.1 percent.
Major regional differences
New-build homes, on the other hand, are very stable in price. However, there were large regional differences in new-build apartments. In Vienna, prices fell by 3.7 percent compared to 2022, and in the rest of eastern Austria (excluding Vienna) by 1.7 percent. However, in western Austria prices rose by 6.9 percent and in southern Austria by 4.2 percent. In Austria there was an average price drop of 0.9 percent for new-build homes.
A similar picture emerges when we look at house prices (new homes and existing homes). According to Statistics Austria, Vienna reported the largest decline with minus 6.7 percent, followed by Lower Austria with minus 4.9 percent and Upper Austria with minus 4.4 percent. In Burgenland and Vorarlberg, house prices fell by 2.2 percent and 1.3 percent. There were increases in inflation in Styria (plus 0.7 percent), in Tyrol (plus 1.3 percent) and in Salzburg (plus 1.4 percent). The increase was largest in Carinthia at 2.1 percent.
Despite the turnaround, many local customers could not afford real estate. The number of real estate purchases fell by 28.2 percent in 2023 compared to the previous year. There was a particular decline in the new construction sector, where purchases fell by more than half (minus 51.6 percent). The number of transactions for existing homes fell by 20.7 percent.
Austria reacts more strongly than other EU countries
In European comparison, the Austrian housing and apartment market responded slightly more strongly to the new market environment than in the first three quarters of 2023 (the fourth quarter will not be published internationally until April 2024) with a price decrease of 2.8% compared to 2022 Euro area (− 1.1%) and the European Union (−0.4%) as a whole. Germany recorded the largest price drop in the EU during this period: -8.9%.
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.
