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Property in Austria roundup: Is Austria’s real estate market ‘overheating’?

Property in Austria roundup: Is Austria's real estate market 'overheating'?
Is Austria's property market overheating? Photo:HARALD SCHNEIDER / APA / AFP
Stay up-to-date on the latest Austrian property news with The Local's weekly roundup.

Thinking of buying a house, moving house or investing? Or are you just curious about the property market in Austria? 

Here’s what you need to know.

Financial Market Stability Committee criticises Austria’s real estate boom

The Financial Market Stability Committee (FSMG) has again criticised the ongoing real estate boom in Austria, which is being fuelled by low interest rates and high competition. 

The FSMG has even asked Oesterreichische Nationalbank (OeNB) to analyse the situation for systemic risks in relation to rising property prices, with a focus on residential property financing for private households. 

The organisation was founded in 2014 and is responsible for strengthening financial market stability. The FSMG can also make recommendations to the Financial Market Authority (FMA) and provide risk warnings.

READ MORE: How to find out if you’re paying too much rent in Vienna

Back in June, the FSMG said: “These factors indicate an increasing overheating of the residential real estate market, which in the event of price corrections in the past has often led to a notable loss of prosperity in numerous countries.”

The Local recently reported that new apartment prices in Austria are the highest in Europe with a 70 square meter apartment costing an average of 10.6 times the national annual salary.

Investing in property to protect against inflation

An article in Die Presse highlights how more people are starting to invest in property as a way to protect against inflation.

The appetite for “concrete gold” is showing no signs of slowing down and rising inflation is now becoming a stronger investment motive than low interest rates.

Die Presse reports alternative investments, such as nursing homes or data centres, are also gaining in popularity.

Trends for alternative property investments tend to start in larger countries like the UK and Germany before moving to other countries.

New mobility concepts for the car-free generation

As more people become aware of climate change and others shun the cost of owning a car, city planners are now turning to new concepts for the car-free generation.

Latest figures show 47 percent of Viennese households don’t have a car and another 12 percent rarely use a car.

Within the 18 to 35 age group, being car-free is even more common with 72 percent not owning a car.

READ ALSO: Can foreigners buy property in Austria?

To cater to the new demands, the concept of a “cultural garage” has been introduced in Vienna’s Seestadt Aspern district by developer WBV-GFW.

A cultural garage is a space that is dedicated for parking but with additional uses, such as a cultural venue, restaurant, football field or bicycle workshop.

For example, the new cultural garage in Seestadt has 537 parking spaces and 2,000 square metres of space for cultural events, with plans for the Vienna Adult Education Centre to occupy the space in the autumn.

City planners are also aiming for a “modal split” in the Seestadt that will only allow for 20 percent car traffic in the future.


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