Rental prices continue to rise in Austria, particularly in larger cities and towns.
In Vienna, for instance, the number of affordable apartments has declined by around half since 2013.
Vienna: Number of ‘affordable apartments' has halved since 2013
Costs of renting and buying both on the increase
As reported by Die Presse in August, even the impact of the coronavirus pandemic has failed to quell the continued rise in rental costs.
However, while rents continue to rise - so too does the purchase price of homes in Austria.
While rents may have risen by around 42 percent across Austria over the past decade, the purchase prices of apartments has risen by an estimated 76 percent over the same period of time.
Advantages of renting
Particularly for foreigners, it is important to note the differences in tenancy rules in Austria.
Austria's long history of preferring renting rather than buying has led to a legal framework which favours tenants in many cases.
As a result, Austrian tenants have a greater suite of rights than many others, particularly renters in English-speaking countries.
Under most lease arrangements, tenants can make significant modifications to a property and do not need to seek permission - although all changes must be reversible.
Austrian states have rental control rules in place which prevent significant increases, while the landlord is responsible for most repairs.
READ MORE: When can my landlord increase the rent, and by how much?
Those wanting to buy should also be aware that a deposit of around 20 percent is necessary in Austria, which can create significant hurdles.
Advantages of buying
Despite more controls on rent increases than in many other countries, tenants in Austria can still expect to pay more every year due to upward pressure on housing markets, which can be particularly problematic during your retirement years.
Also some economists argue that a history of renter-focused laws has meant Austria's property market is undervalued, with recent increases set to continue.
Austria, like neighbouring Germany, is also seeing early signs of a cultural shift away from renting towards buying, which will only continue to put upward pressure on purchase prices, resulting in longer-term increases in property value.
READ MORE: Why do so few Austrians own their home?
Which makes more sense?
Whether it makes more sense to rent or to buy will of course depend on several factors - including where you want to live, how long you will live there for and whether you have money for a deposit.
Austria’s ImmoScout property agency put together a tool to determine if renting or buying makes more sense.
The tool - available here - lets you calculate how long you would need to rent a property in a particular area before you would reach the purchase price.
“That is the value at which buying makes sense from an economic point of view,” says Markus Dejmek, Head of ImmoScout24 in Austria, reports the Austrian Press Agency.
“However, buying a property is seldom purely economically motivated. People want to create sustainable values. Nevertheless, there are the known, expensive places and (there are) cheaper areas.”
Where is expensive - and where can I find a bargain?
Across the entire country, you’d need to rent a property for an average of 28.5 years “before the purchase is economically worthwhile”.
According to ImmoScout “Due to the persistently high price level for property, on average across Austria, buying a property is less recommendable than renting.”
The longest period of time in Austria comes in Vorarlberg, where you’d have to rent for 30.3 years before it made economic sense to buy the property.
Salzburg is next, with 29.2 years, while in Tirol, the time period is 28 years.
You’d need to rent for 28.7 years in the capital Vienna, although there are significant differences depending on the neighbourhood.
In Vienna’s trendy Vienna Josefstadt, the period is 45.3 years, while Währing (39.2), Alsergrund (37.8), Wieden (36.9) and downtown (36.1) are all well above the Austrian average.
A similar study completed by German researcher on-geo in October which looked at cities rather than states found that the duration was slightly higher. According to on-geo, Salzburg leads this ranking with 35 years, followed by Vienna with 33 and Innsbruck with 31 years.
For those looking for a bargain, on-geo recommend checking out “economically weaker regions such as the Waldviertel, where you can only rent a property for about half as long as the larger cities: 17.1 years in Gmünd, 17.4 years in Waidhofen / Thaya and 18.2 years in Horn.”
Is it possible to push prices down?
One of the major factors is continually rising demand. Social Democratic Party of Austria spokeswoman Ruth Becher said in late October that the government must construct 150,000 apartments by 2026 in order to counter this rising demand.
“The state must play a more active role” Becher said in an interview with Austrian news site Der Standard on October 30th.
How many years of renting to justify purchase price in each Austrian state (Austria-wide average 28.5 years):
Burgenland: 21.5, Upper Austria: 25.3, Styria: 25.5, Carinthia: 25.7, Lower Austria: 26.9, Tyrol: 28, Vienna: 28.7, Salzburg: 29.2, Vorarlberg: 30.3.
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