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ECONOMY

Plan to build 30,000 new homes in five years

30,000 new apartments could be constructed in Austria over the next five years at a cost of €6.5 billion ($8 billion), the heads of the construction association, construction unions, non-profit developers and building societies told media on Wednesday.

Plan to build 30,000 new homes in five years
The Gasometer complex in Vienna - hailed as attractive and affordable housing. Photo: APA

About €1.3 billion will be made available each year for the construction of 5,000 apartments, of which a third will come from the European Investment Bank (EIB).

The new apartments are planned for urban centres such as Vienna, Graz and Linz – where demand for affordable housing is high. The population of Vienna is predicted to grow by 10 percent in the next ten years.

The project aims to provide homes for about 68,000 people in total and will bring a boost to the domestic economy of 0.4 percent GDP growth and contribute to a reduction in public debt of 1.5 percent.

Additionally it is expected to create 30,000 jobs – of which between 15,000 and 20,000 will be permanent.

Josef Muchitsch from the Wood Construction Union said the "innovative" project came about because Austria doesn’t have enough affordable housing and needs to create new employment opportunities.

It will use available capital at historically low interest rates, he said.

Muchitsch said he assumes the government will now review the model for the project, with Minister for Social Affairs Rudolf Hundstorfer having already announced his support, given that the project would not put pressure on the national budget.

He added that it was a “Christmas gift that the government just needed to unwrap”.

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ECONOMY

The essential products that are getting more expensive in Austria

Record inflation spikes have caused basic supermarket products to become more expensive in the alpine country.

The essential products that are getting more expensive in Austria

Austria has been suffering from the high cost of living prices, and inflation for April is expected to reach 7.2 percent, according to a preliminary estimate by Statistik Austria.

Compared to the previous month, the price level is expected to rise by 0.3 percent, the federal statistics office said.

“Life in Austria continues to become noticeably more expensive. In addition to the continuing inflation-determining price increases for fuels and energy products, food also has an additional price-increasing effect,” said Statistik Austria Director-General Tobias Thomas.

READ ALSO: Austria unveils €2 billion relief package to fight the rising cost of living

The increases are very much reflected in supermarket prices.

According to Statistik Austria, oils and fats have had the highest price increases (13.3 per cent in a year on year comparison), followed by vegetable prices (9 per cent in a year on year comparison).

Bread and cereal prices were up by 7.2 per cent, and milk, cheese and eggs prices rose by 5.5 per cent.

Fruits have also been costing 4.7 per cent more in March 2022 than in March 2021. In addition, meat, which is already an expensive product for Austrians, has increased in price by 4.1 per cent.

There were also substantial price increases for non-alcoholic beverages, particularly coffee, which rose 12.3 per cent.

Why is inflation so high?

Prices are rising worldwide, not just in Austria. And much of it has to do with the Russian war on Ukraine, which brings up fuel prices and affects the entire supply chain of several products on supermarket shelves.

However, that is not the only factor.

READ ALSO: Will inflation force tax changes in Austria from 2023?

A special IHS Markit report on food inflation stated that the Russian invasion is just the most recent event exacerbating food inflation, especially as both countries are significant exporters of grains and vegetable oils.

Another factor for rising prices is competition with Chinese demand for feedstuffs such as soybeans, corn, sorghum, wheat and other grains.

Production and logistics issues have also impacted prices globally. For example, adverse weather in Brazil affected the production of corn, soybean, and even coffee.

In addition, transportation issues and even Covid-related labour shortages have also hindered production and logistics and increased prices.

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