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What is happening in Austria’s real estate market? Are prices on the rise or decline? Is Vienna still a prime location for international investors? How are Austria’s government policies and taxes shaping the real estate landscape in 2025?
These are the questions we hear every day from professionals, buyers, and sellers across Austria, from Salzburg to Innsbruck and beyond. Perhaps you’re curious about these trends too.
We understand this because we stay closely connected with local experts and individuals like you, exploring the Austrian real estate market daily. That’s why we crafted this article: to deliver clear answers, insightful analysis, and a comprehensive view of market trends and dynamics.
Our aim is straightforward: to make sure you feel informed and confident about the market without needing to search elsewhere. If you think we missed something or could improve, we’d love to hear your feedback. Feel free to message us with your thoughts, and we’ll strive to enhance this content for you.
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1) Residential property prices in Austria will get more stable after a period of rapid growth
Austria's residential property market is showing signs of stabilizing after a period of rapid growth.
In the last quarter of 2023, the property price index dropped by 2.35% year-over-year, marking the third straight quarter of decline. By June 2024, house prices had fallen 3.2% year-over-year, following a significant dip of 18.3% in the previous quarter. This trend suggests that the once-booming market is cooling off.
Adding to this, there's been a noticeable increase in the supply of new housing. In 2023, around 43,400 new residential units were completed. However, expectations for 2024 indicate a potential drop of up to 10% in new builds, possibly hitting a low in 2025. This influx of new homes, along with government measures like the construction package, is likely to help stabilize prices.
Interest rates are another factor at play. Rising rates have made mortgages less affordable, which has cooled the demand for property investments. Since autumn 2022, there's been a 25% year-on-year decline in transaction volumes for flats and a 21% drop for single-family homes. This shift is impacting the market dynamics significantly.
With fewer people able to afford new homes, the demand for new construction has also decreased. This has led to a slowdown in building activity, further contributing to the stabilization of property prices. The combination of these factors is creating a more balanced market environment.
Sources: Global Property Guide, Glorit, Engel & Völkers
2) Vienna’s property prices will rise moderately due to limited supply and strong demand
Vienna's property market is seeing a steady rise, with average prices for new homes jumping from 4,000 euros per square meter in 2016 to about 6,000 euros in 2023.
One big reason for this price hike is the limited number of new housing projects. Construction of new apartments in Vienna has dropped a lot, and it's expected to shrink even more in 2025 and 2026, meaning fewer homes are available.
Meanwhile, Vienna's population is growing, and more people are moving to the city, which boosts the demand for housing. This influx, along with interest from both local and international buyers, is driving prices up.
Existing properties are in high demand, with short-term rentals averaging a 77% occupancy rate. This shows that it's not just locals looking for homes; expatriates and international students are also adding to the demand.
Sources: Statista, IMF, Airbtics, EHL Market Research
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Austria versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
3) Urban rental yields will remain stable as demand for city living persists
Urban areas in Austria are set to maintain stable rental yields as city living remains popular.
In 2023, Austria saw a 1.4576% growth in its urban population, showing more people are choosing city life. This shift is clear with 59.53% of the population now living in urban areas, highlighting a strong urbanization trend.
City rental demand is steady, thanks to strong job growth and positive consumer sentiment. Despite economic challenges, people’s finances have held up well, and factors like population growth and low financial obligations have kept urban job markets thriving, making cities attractive for living and working.
Austrian cities are packed with amenities and services, a big draw for younger folks who love the urban lifestyle. This is evident as they flock to cities for the convenience and job opportunities. Historical data shows that rental yields in cities like Vienna, Graz, and Salzburg have stayed stable, with recent figures hovering around 3.57% to 3.66%.
Sources: Trading Economics, Statista, Global Property Guide
4) Rural property prices in Austria will grow more slowly than those in urban centers
Urban centers in Austria, like Vienna, have seen significant real estate price growth in recent years.
From 2020 to 2022, Vienna's property prices jumped by 6.7%, 10.8%, and 9.7% each year. Meanwhile, rural areas didn't experience the same boom. This is partly because more people are moving to cities, drawn by better job opportunities and a vibrant lifestyle.
In 2023, Austria's rural population was either stable or shrinking, while cities welcomed new residents and investors. This urban migration is fueled by the economic prospects and quality of life that cities offer. Vienna, in particular, stands out as an economic powerhouse.
Vienna's strong job market attracts businesses and professionals, creating a higher demand for housing and commercial spaces. This demand is a key factor in the rising property prices in urban areas. In contrast, rural regions are not experiencing the same level of interest or growth.
For potential property buyers, it's important to note that rural areas in Austria are likely to see slower price growth compared to bustling urban centers. This trend is expected to continue as more people flock to cities for work and lifestyle benefits.
Sources: Vienna Times, Economy Finance, Luxury Vienna
5) Vienna's rental yields will improve with strong demand for rental properties
Rental yields in Vienna are on the rise as the demand for rental properties remains strong.
In 2023, the average rent in Vienna saw an increase of 8.2% year-over-year, reaching €473.40 per month. This jump in rental prices highlights a robust demand for rental properties, which is a key factor in improving rental yields. With Vienna's population growing, more people are looking for places to rent, naturally supporting this demand.
Vienna's low vacancy rates mean that fewer new properties are entering the market, pushing rental prices higher. This limited new housing supply compared to demand plays a crucial role in the rental market dynamics. The influx of international students and expatriates into Vienna also contributes significantly to the strong demand for rental properties.
Economic growth in Vienna is leading to higher disposable incomes, making it easier for people to afford renting. This economic boost, combined with the city's appeal to international residents, keeps the rental market vibrant. Investors are taking note, showing increased interest in rental properties, which can lead to more capital being invested in the market.
As more capital flows into the rental market, rental yields are expected to improve. The combination of a growing population, limited housing supply, and economic growth creates a favorable environment for rental property investments. Vienna's appeal as a cultural and economic hub continues to attract both residents and investors alike.
With these factors in play, the rental market in Vienna remains strong, offering promising opportunities for property investors. The city's unique blend of cultural richness and economic stability makes it an attractive destination for both renters and investors.
Sources: EHL Publication, Global Property Guide
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6) Tourist-heavy regions will experience a rental market boost as visitor numbers rise
Austria is seeing a surge in tourism, especially in 2023 and 2024.
With 139.73 million overnight stays recorded in 2023, the country experienced a 10.8% jump from the previous year. This boom in visitors naturally boosts the demand for places to stay, including rental properties.
Take Vienna, for example. It's a hotspot for tourists, and the numbers show it. The city boasts a 77% median occupancy rate for Airbnb listings, meaning these short-term rentals are quite popular. On average, these places are booked for 281 nights a year, with guests paying around €91 per night.
By September 2024, Vienna had 10,830 active Airbnb listings. Hosts in the city typically earn about €24,000 annually, which points to a growing preference for rental accommodations over traditional hotels.
For those considering buying property in Austria, especially in tourist-heavy areas like Vienna, this trend is worth noting. The rental market is thriving, driven by the steady influx of visitors.
7) Vienna’s rents will increase moderately as population grows and housing supply remains limited
Vienna's population is on the rise, and this trend is set to continue for the next few decades.
By 2053, the city is expected to welcome an additional 310,000 residents, bringing the total to 2,292,000 people. This surge in population naturally boosts the demand for housing, making it a hot topic for potential property buyers.
Even with ambitious projects like Aspern Seestadt, which plans to add over 11,000 homes, the housing supply remains tight. The real estate market in Vienna is thriving, largely due to strong demand and limited availability, especially in sought-after neighborhoods.
In 2023, standard rents for around 750,000 Austrian tenants saw an 8.6% increase, underscoring the pressure on the rental market. This upward trend in rental costs is expected to persist, driven by rising living expenses and a robust demand for rental properties.
For those considering buying property in Vienna, it's crucial to understand that the city's growing population and limited housing supply are key factors influencing the market. The combination of these elements suggests that rents will continue to rise moderately in the coming years.
Sources: Vienna Population Projection, Aspern Seestadt Project, Real Estate Market in Austria
8) Property yields in smaller Austrian towns will fall as prices rise faster than rental income
Property prices in smaller Austrian towns are rising faster than rental income.
In 2023, the average price per square meter for homes in these towns was just over EUR 4,300 for condos and around EUR 2,850 for single-family homes. Meanwhile, rental income hasn't kept up. For instance, the average rent in Austria increased by 8.2% to EUR 473.40 per month in Q3 2023, which is slower than the property price hike. This gap is causing rental yields to drop.
Take Salzburg, for example. Here, gross rental yields range from 2.07% to 2.88%, with a city average of 2.59%. This is a bit lower than Austria's average gross rental yield of 3.57% in Q1 2024, which itself was down from 3.66% in Q3 2023. The demand for owning property is climbing, thanks to the ECB's monetary policy and changes in lending laws, pushing property prices up and rental yields down.
For potential buyers, this means that while property values are increasing, the return on investment from renting is shrinking. If you're considering buying in these areas, it's crucial to weigh the long-term value appreciation against the current rental income potential. The trend suggests that yields in smaller towns will continue to decline as property prices outpace rental income growth.
Understanding these dynamics can help you make informed decisions. If you're looking for a property that offers better rental yields, you might want to explore other regions or consider different investment strategies. The current market conditions in smaller Austrian towns are shaped by a mix of economic policies and local demand, which are crucial factors to consider.
Sources: Global Property Guide, Global Property Guide, Bank Austria
We have made this infographic to give you a quick and clear snapshot of the property market in Austria. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Rents in student-heavy cities like Graz and Innsbruck will rise as student populations grow
Student numbers in Graz and Innsbruck are on the rise, making these cities vibrant hubs of academic life.
With 28,278 students at the University of Innsbruck and 31,000 at the University of Graz, the demand for student housing is booming. These cities are not just about academics; their lively culture and pleasant climate make them top picks for students.
In Graz, for instance, student housing options like STUWO are in high demand, with prices starting at €419 for a shared room. This reflects the intense competition for student accommodations in the area.
However, the housing supply isn't keeping up. The investment property market in Austria, including Graz, is seeing a decline in new space production, which means fewer vacancies and higher rents.
Graz's population was estimated at 309,597 in 2024, and this steady growth, along with peak demand during the academic year, is pushing rents up. Real estate analyses show that rents in major Austrian cities are rising faster than purchase prices, driven by inflation and limited housing supply.
Sources: World Population Review, STUWO, EHL, Wageningen University
10) Rural rents will stay stable as demand matches available supply
Rents in Austria's rural areas are expected to stay stable thanks to a balanced demand and supply.
One reason for this stability is the low population growth in these regions, which was just 0.321% in 2023. This slow growth means that the demand for housing isn't skyrocketing, keeping the rental market steady. In contrast, urban areas are seeing more significant price hikes, but rural areas are enjoying a more stable environment.
Historical data shows that while rental prices across Austria have been climbing, rural areas have remained more stable. This suggests that these regions are less impacted by the price surges affecting cities. Efforts by the government and private sector to build new homes and convert unused buildings are boosting the housing supply, which helps keep rents from rising.
Surveys reveal that younger people prefer urban living, so fewer are moving to the countryside. This trend helps maintain a steady demand for housing in rural areas. Additionally, specific property development projects in these regions are being designed to meet local needs, ensuring that the housing supply aligns with the population's requirements.
These tailored projects are crucial because they ensure that the supply of housing matches local demand, preventing any sudden spikes in rental prices. The combination of these factors contributes to a balanced market where rents remain stable.
In summary, the rural rental market in Austria benefits from a mix of low population growth, targeted housing projects, and a preference for city life among younger generations, all of which contribute to a stable rental environment.
Sources: CEIC Data, Global Property Guide, 20 Countries
11) Austria's demand for smaller living spaces will grow as single-person households increase
Austria is seeing a noticeable rise in single-person households.
By the end of 2023, these households hit a record high of 17.40%, as reported by EUROSTAT. This trend has been climbing since 2009, showing a clear shift in how people are choosing to live. One big reason for this change is Austria's aging population. From 2011 to 2021, the number of Austrians over 65 jumped from 15.2% to 19.4%. Older folks often live alone, naturally increasing the number of single-person households.
Urban living is another factor. With 64% of Austrians living in cities, smaller households are becoming the norm. Cities offer more chances for people to live on their own, which means there's a growing need for smaller living spaces. The real estate market is catching on to these changes. There's a shift towards compact housing, especially in cities like Graz, which are focusing on smart urban development and making the most of available space.
This trend fits with the growing preference for smaller, more manageable homes. People are looking for places that are easy to maintain and fit their lifestyle. The demand for these types of homes is only going to increase as more people choose to live alone. This shift is not just about numbers; it's about how people want to live their lives. The real estate market is adapting, and so are the cities, to meet these new demands.
Sources: EUROSTAT, Statistics Austria, Austrian Information
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12) Stricter rental rules will impact investor strategies, especially in urban areas
In Austria, stricter rental regulations have become a major concern, especially in cities like Vienna and Graz.
Since 2023, the Austrian government has been enforcing rental price caps more rigorously, which means many rental agreements are now under scrutiny to ensure compliance. This has led to a noticeable shift in the rental market dynamics, particularly in urban areas where these rules are most stringent.
By 2024, the effects of these regulations were clear. In cities, there was a significant increase in reports of rental price caps being enforced, resulting in fewer available rental properties. Landlords, wary of the capped rates, were less inclined to rent out their properties, which has had a substantial impact on the rental market.
Investors are understandably concerned. A survey from 2023 highlighted that many investors were worried about the profitability of their rental properties due to these stricter regulations. This anxiety is particularly pronounced in urban areas where the rules are most stringent, affecting investor strategies.
In Vienna, for instance, the rental market has seen a notable decrease in available properties, as landlords hesitate to rent under the new capped rates. This has led to a tighter market, making it challenging for potential renters to find suitable accommodations.
These changes are reshaping the landscape for property investors, who must now navigate a market with increased regulatory oversight and adapt their strategies accordingly. The focus is shifting towards compliance and long-term planning to ensure profitability in this new environment.
Sources: WKO, Der Standard, IWi
13) New energy efficiency rules will boost values of eco-friendly homes
New energy efficiency regulations are reshaping property values, especially boosting eco-friendly homes.
In Austria, the Renewables Heating Act is a game-changer, pushing for renewable heating and aiming to phase out fossil fuels by 2035/2040. This, along with the 2021 Renewable Energies Expansion Act, offers incentives for building and retrofitting homes to meet nearly Zero Energy Building (nZEB) standards. These laws are not just about saving energy; they’re about increasing the value of your property.
Austria is leading the way in energy-efficient housing, boasting the highest concentration of passive houses worldwide. Since 1994, over 14,000 buildings have been constructed to the passive house standard, showing a strong move towards sustainable living. The EU's Energy Performance of Buildings Directive supports this trend, linking nZEB requirements to higher property values due to improved energy efficiency.
People are catching on, with a noticeable shift in consumer preferences towards energy-efficient homes. Media coverage is playing a big role here, highlighting benefits like reduced utility costs and a positive environmental impact. For example, upgrading a regular house to a Passive House can save homeowners around €9,500, leading to long-term savings and increased property values.
These changes are not just about being green; they’re about smart investments. As more buyers look for eco-friendly options, properties that meet these standards are becoming more desirable. This shift is not just a trend; it’s a reflection of a broader awareness and demand for sustainable living.
In the real estate market, being ahead of the curve with energy-efficient homes can mean a significant boost in property value. As regulations continue to evolve, homes that meet these standards are likely to see a rise in demand and price. The future of real estate is green, and those who adapt will benefit the most.
Sources: CMS Law, Expatica, Green Investor Report 2023
14) Eco-friendly homes in Tyrol will attract more interest as environmental awareness grows
In Tyrol, there's a growing buzz around eco-friendly homes as people become more environmentally conscious.
Tyrol is leading the way in Austria with over 14,000 passive houses, showcasing a strong commitment to sustainable living. This is not just a local trend; it's supported by the Austrian government through initiatives like the "Building of Tomorrow" program, which offers subsidies for thermal insulation and renewable energy systems.
Homebuyers in Tyrol are increasingly interested in properties that reflect sustainable and ecological values. Features like solar panels and energy-efficient appliances are not just nice-to-haves; they're becoming essential for many buyers.
The media is playing a big role in this shift, with a heightened focus on sustainable living that keeps eco-friendly homes in the spotlight. This increased awareness is driving more people to consider green building practices when purchasing property.
As environmental awareness grows, Tyrol is expected to see even more interest in eco-friendly homes. The region's commitment to sustainability is evident in its real estate market, where demand for green features is on the rise.
Sources: UNECE, Expatica, Passiv.de
We made this infographic to show you how property prices in Austria compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
15) Demand for urban living spaces will rise as young professionals increasingly seek city center locations
Young professionals are flocking to urban areas in Austria, with cities like Linz and Wels becoming popular choices.
These cities are buzzing with opportunities, thanks to strong job markets and top-notch educational facilities. This has led to a noticeable population increase, making these areas even more appealing for young adults looking to settle down.
As companies in Linz expand, there's a sharp rise in rental and property prices. This is largely due to the booming labor market, especially in sectors like accommodation and catering, which are seeing a surge in job demand.
Vienna is stepping up its game by investing heavily in urban infrastructure to meet the needs of young professionals. Improved public transportation makes commuting a breeze, adding to the city's allure.
The rise of co-working spaces in Vienna is a testament to the growing preference for urban living. These spaces are designed for productivity and networking, catering perfectly to the lifestyle of young professionals.
With these developments, it's clear that urban living is becoming increasingly attractive for young professionals, driving demand in city centers.
Sources: OÖ Zukunftsakademie, EURES, URBACT, Founders Today
16) Rising utility costs will lead Austrian consumers to prioritize energy-efficient homes
In Austria, rising utility costs are pushing people to consider energy-efficient homes.
With energy prices for gas and electricity climbing, both the government and the public are keen on cutting down energy use. The Austrian government has rolled out initiatives like the thermal renovation voucher program and the "Away from Oil and Gas" campaign. These efforts not only offer financial perks but also make energy efficiency a hot topic among homeowners.
The media is also playing its part by showcasing how energy-efficient homes can save money, which is swaying consumer choices. This buzz, along with government backing, is boosting the market for energy-efficient appliances and home systems. More real estate listings now highlight energy efficiency features, making them more appealing to buyers.
In the countryside, where homes are often older and less efficient, these changes are even more noticeable. People are increasingly opting for renovations that improve energy efficiency, driven by the potential for long-term savings on utility bills. This shift is not just about saving money; it's also about making homes more comfortable and sustainable.
Local builders and contractors are catching on, offering more services focused on energy-efficient upgrades. This trend is creating a ripple effect, encouraging more homeowners to consider such improvements. The demand for energy-efficient solutions is growing, and it's becoming a key factor in property decisions.
As energy costs continue to rise, the focus on energy efficiency is likely to intensify. Homebuyers are now more informed and are prioritizing properties that promise lower utility bills and a smaller carbon footprint. This shift is reshaping the real estate market, making energy efficiency a top priority for many.
Sources: Global Legal Insights, European Construction Sector Observatory, OECD iLibrary
17) Linz will attract more property interest with its growing industrial sector and job opportunities
Linz is set to become a hotspot for property buyers, thanks to its booming industrial sector and job opportunities.
In recent years, Linz has seen major investments, like Borealis's EUR 80 million boost to improve plant efficiency and environmental performance. This kind of financial commitment not only strengthens the industrial base but also hints at long-term growth potential for the area.
The city's employment rates are on the rise, with the steel sector leading the charge by exploring new energy solutions. This forward-thinking approach is expected to create more jobs, drawing more people to Linz and increasing the demand for housing.
Government incentives are also in play, offering subsidies for residential construction and affordable loans. These measures are designed to stimulate economic growth and attract more businesses and residents. As companies like Borealis expand their operations, Linz's industrial activities are set to grow, further boosting job opportunities and housing demand.
With more companies opening or expanding their facilities, Linz is becoming a magnet for job seekers and property buyers alike. The city's proactive stance on industry and employment is likely to attract more people, increasing the demand for housing.
Sources: Borealis Group, Industriall Europe, OeNB
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18) Burgenland will attract interest for affordable properties and its closeness to Vienna
The Burgenland region is catching the eye of property buyers due to its affordability and closeness to Vienna.
With Vienna's property prices on the rise, many are seeking cheaper alternatives nearby. In 2023, Vienna experienced a dip in house prices, prompting potential buyers to explore Burgenland, where prices are much lower. For example, existing house prices in Burgenland dropped by 5.0% in 2023, making it a tempting choice for those who find Vienna too pricey.
Getting to Vienna from Burgenland is now easier thanks to better transportation links. New bus lines connecting Graz with the South East Transport Axis through southern Burgenland have improved public transport, making it more convenient for people working in Vienna but living in Burgenland.
Burgenland is also gaining fame through media coverage and lifestyle articles that spotlight it as a rising property hotspot. These pieces highlight the region's quality of life, beautiful landscapes, and affordability, attracting more interest from potential buyers.
New residents often mention affordability and proximity to Vienna as major reasons for choosing Burgenland. The region's charm and practical benefits are becoming well-known, drawing in those looking for a balance between city access and countryside living.
Sources: Statistik Austria, Interreg Central Europe, Vienna Region
19) Salzburg’s real estate market will gain from its cultural charm and growing international recognition
Salzburg's real estate market is set to thrive thanks to its cultural appeal and growing international recognition.
Every summer, the Salzburg Festival draws over 250,000 culture enthusiasts from around the globe. This influx not only boosts the local economy but also sparks interest in real estate, as many visitors fall in love with the city and consider buying property.
Salzburg's charm is often highlighted in international travel and lifestyle magazines, enhancing its reputation and attracting more international buyers. The city is home to UNESCO World Heritage sites like the historic center and Hohensalzburg Fortress, adding to its allure for tourists and investors alike.
Strategically located near Munich, Salzburg is a prime spot for those seeking luxury properties. The expansion of international transport links, such as the high-speed tram line, makes the city even more accessible and appealing to potential residents and investors.
The Austrian government is actively promoting Salzburg as a cultural hub, which plays a crucial role in boosting the real estate market. This effort, combined with the city's cultural richness, contributes to a rising demand for luxury properties, with prices ranging from EUR 2 million to EUR 8 million in prime locations.
These factors collectively make Salzburg an attractive option for international buyers looking for a blend of culture and luxury. Salzburg's real estate market is poised for growth, driven by its unique cultural offerings and strategic location.
Sources: Engel & Völkers, Salzburg.info, Railway Supply
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.