Residential property is in Austria "now a luxury item"

Residential property is in Austria "now a luxury item"

The price per square meter for new apartments increased in 2021 by eleven percent to 4728 euros. There was another increase in the first quarter.

Financially, the dream of home ownership is becoming increasingly difficult to achieve. The price per square meter for new apartments in Austria last year rose by eleven percent to an average of 4,782 euros. The first quarter of this year saw a further 13 percent increase, consultancy Deloitte reports in its “2022 Property Index” published on Wednesday. Accordingly, Austria ranks first in a comparison of countries in terms of residential construction projects per 1,000 inhabitants.

The consultancy uses the index to analyze the European property market every year. With purchase prices soaring, the Alpine republic is now among the most expensive places – alongside Germany and France, behind only Great Britain. The price per square meter is 4905 euros.

With an average price of new apartments of €5788 per square meter in the period under review, Vienna was 21 percent above the Austrian average. In the European ranking of cities, however, the national capital offers almost bargain prices and was far behind cities like Paris with 13,462 euros or Munich with 10,500 euros.

“While it may seem paradoxical to some, our capital is relatively affordable,” says Gabriele Etzl, Partner and Head of Real Estate at Deloitte Legal. “For comparison: in Lisbon you pay more than three times more than the average price of a property in Portugal. Here the urban-rural difference is much greater.”

Rent cheap in international comparison

In an international comparison, renting space in Vienna and Austria is also cheap. In Vienna, the average rent of 8.66 euros per square meter was even cheaper than in Graz (10.40 euros) or Linz (10.22 euros). That puts you in the bottom third in Europe. Paris (29.10) is ahead of Oslo (26.56) and Inner London (25.12).

Nowhere are more construction projects being planned than in Austria. In 2021, a total of 10.6 projects were started per 1,000 inhabitants. Poland with 7.3 and Slovenia with 6.1 construction projects per 1,000 inhabitants follow a considerable distance. Italy is in last place in the Deloitte study with 1.0 construction projects initiated per 1000 inhabitants.

Bottom line from Deloitte’s point of view: The Covid-19 crisis and historically low interest rates triggered a real flight to “concrete gold” in the past year. “As a result of this development, living in this country is also becoming increasingly expensive. While rentals in the capital are still affordable for the general public, property is now a luxury asset,” says Etzl.