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Why are property prices in Austria’s Tyrol region so high?

Tyrol is the region with the second lowest average salary in Austria but some of the most expensive property. The Local spoke to experts and residents to find out the reasons behind the soaring costs and how locals are affected.

Why are property prices in Austria's Tyrol region so high?
Why does property cost so much in one of Austria's lowest-earning regions? Photo: Raphael Bernhart/Unsplash

Property prices in Tyrol are some of the most expensive in Austria and are showing no signs of slowing down any time soon.

Nationwide, the average price per square metre for an apartment in 2020 was €4,831 and for a house it was €3,360.

But the province of Tyrol recorded the highest average price for an apartment at €5,503, 14 percent above the average, and ahead of the capital Vienna at €5,340.

And Tyrol’s houses are even more expensive. Figures from real estate agents Engel & Völkers show that the average purchase price for a house in Kitzbühel, one of the most sought-after areas, in 2020 was between €6,828.93 and €10,174.07 per square metre.

Clare Woolner, from Manchester in the UK, lives in St. Johann in Tyrol with her Austrian partner. The town is in the Kitzbühel district and is just a 15 minutes drive from the city of Kitzbühel. Clare told The Local they are currently priced out of the property market, which could problems in the future if they want to start a family.

Clare said: “If we saved really hard we probably could afford to buy a property but then we’d struggle to pay for any improvements. Also, the mortgage and monthly payments would be huge, much more than we’re currently paying in rent. So even though renting feels like dead money, buying doesn’t make financial sense for us at the moment.

“In terms of future plans, for me it means either buying a property much later than I had planned and having a much bigger mortgage than I would like or, if I do decide to have a family and want to live in a house, it will mean moving elsewhere.”

In Vienna, the average cost of an apartment in the first quarter of 2021 was €5,370 per square metre and in Graz it was €3,850. 

In Innsbruck, the capital of Tyrol, the average cost of an apartment was €6,840 per square metre and the cost of land in the district has gone up by 12 percent in the past year.

But Tyrol also has some of the lowest wages in Austria.

A recent salary report by StepStone shows the average gross national salary in Austria in 2021 is €52,000, but Tyrol was in the three lowest earning regions with an average salary of €49,028, with only Carinthia and Burgenland reporting lower averages.

Those stats are based only on those people in full-time work, while Tyrol’s lower wages can also be partly attributed to a high proportion of part-time workers. Only 47 percent of employees work full-time all year in the province and there is a high percentage of tourism and hospitality roles, which means earnings have been further impacted by the pandemic.

This means that the Chamber of Commerce puts the average salary in Tyrol at €27,312, the second lowest at €1,400 less than the national average, ORF reports. The lower incomes make getting on the property ladder even harder.

Sally Thornton-Helmer from the UK lives in St. Johann in Tyrol with her husband and family. In 2006 they bought a 75 square metre holiday bungalow for €130,000 before buying a 130 square metre house in 2011 for €506,000.

Sally told The Local: “You can hardly buy a three-bedroom apartment for this anymore. We estimate we could sell it for more than double what we paid for it. Crazy.

“If we were trying to buy something today we would not be able to afford a house and given that three-bedroom apartments with a garden are so few and far between, we would certainly have to make some compromises.

“I’m relieved we bought a house when we did and I definitely appreciate just how lucky we are.”

To compare, newly built two-bedroom apartments (approximately 80m2) in St. Johann are currently on sale for around €700,000. A new 40m2 studio apartment, which is advertised as a “leisure residence”, is on the market for €310,000. The asking price of older two-bedroom apartments is around €500,000. 

Searching for a detached family house with a garden for less than €1 million is hopeless, but The Local did find a three-bedroom town house in Kitzbühel for €850,000.

Why are property prices so high in Tyrol, and will it last?

The reason for Tyrol’s popularity seems simple – it’s in the Alps and offers a lifestyle that many people aspire to with skiing in the winter and lakeside sunbathing in the summer. Appealing to people from outside the local area often means second-home owners, which can push the prices beyond the reach of native residents.

In fact, earlier this year, Peter Marschall, CEO of Marschall Real Estate, told The Local that luxury property buyers from Germany have been flocking to the Kitzbühel district since the end of the first lockdown in spring 2020.

Marschall said: “People want to own a second home in a nice area. The crisis has highlighted these areas to international buyers more than Vienna.” 

This view is echoed by Tyrolean resident Lukas Krainz, a sixth-generation owner of Wieshofer Mühle in St. Johann, who says the “super rich” have been investing in property in the province since 2008.

Lukas told The Local: “Austria is a neutral state and we are not in Nato, so it is seen as a very safe place for investment. Buyers know that the prices are very high in Austria but they can also expect prices to rise in the future as well.”

Fast forward to 2021 and the pandemic is the latest crisis that has prompted people – especially wealthy buyers – to invest in property in Tyrol again. The ability for many professionals to work remotely has also added to the allure of investing in a home in the mountains.

For local residents in Tyrol though, dreams of home ownership are quickly disappearing.

Lukas said: “For young people on an average salary and with no inheritance ahead, I see no chance for them to be able to own their own home in the future. 

“You can maybe try places like Kirchdorf or Erpfendorf [two municipalities about 3 kilometres away from St Johann], but quickly – before the prices reach an unaffordable level there too.”

Is this a fixable problem?

With rising property prices largely driven by second home-owners and overseas buyers, the region has attempted to bring in rules that safeguard some properties for locals.

The Tirolean state government recently introduced new laws to ban the construction of new holiday homes (Freizeitwohnsitz) in communities where there are no affordable apartments or inexpensive land, but proper enforcement will be key to their success.

There are already rules in place since 1994 that no more than eight percent of housing stock in a district can be taken up by holiday homes, but in the Kitzbühel district of Tyrol this has not been monitored.

According to the Kronen Zeitung, 80 percent of the municipalities in Kitzbühel are above the legal limits on holiday homes.

Across Tyrol, reports suggest there are currently 10,000 “illegal leisure residences”.

Such homes become illegal when owners claim a property is their main or secondary residence but rarely spend time there. 

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LIVING IN AUSTRIA

EXPLAINED: Everything you need to know about camping in Austria

Camping in Austria can be a lot of fun, but what are the rules? Here’s everything you need to know about setting up camp in the Alpine republic.

EXPLAINED: Everything you need to know about camping in Austria

Waking up beside a lake or surrounded by mountains is a dream Austrian holiday for many, but it’s important to know the rules about camping before heading off with a tent or campervan.

As the summer season approaches, here’s everything you need to know about camping in Austria.

Is wild camping legal in Austria?

Wild camping – setting up camp outside of a designated campsite – is generally illegal in Austria. This applies to both camping in a tent or sleeping in a van on the side of the road.

Exceptions to this rule do exist but usually only if the municipal authority grants a temporary exception, for example for a school trip or a youth club activity.

A bivouac (temporary camp without cover) is allowed in the event of bad weather or injury, but planned wild camping in the mountains is illegal. 

FOR MEMBERS: What are the rules for wild camping in Austria?

There are some regional differences though.

In the states of Salzburg, Vorarlberg and Styria there are no laws strictly forbidding camping outside of campsites, but local authorities can prohibit it and take action if necessary.

The strictest rules apply in national parks, nature reserves and special protection areas across Austria, so check before you plan your camping trip that your spot is not located in one of these areas.  

In most cases, if someone is caught camping illegally in Austria it is considered as an administrative offence and a fine can be issued, ranging from €5 to €500, depending on the location.

Camping in the forest

Camping in the forest is prohibited everywhere in Austria by law (specifically Section 33 of the Forest Act). The only exception is when you have the consent of the landowner.

Camping above the tree line

In Upper Austria and Styria you are allowed to camp in the mountains above the tree line, as long as you are outside of pasture areas.

In Vorarlberg this is also permitted, although the mayor of a municipality can prohibit the setting up of tents outside approved campsites if the interests of safety, health, agriculture or the protection of the natural balance as well as the landscape and townscape are “grossly violated”.

In Salzburg, camping above the tree line is in theory permitted, but the Alpine Association recommends groups wishing to camp should contact the nature conservation department of the responsible district administration before setting up. 

READ ALSO: How to explore the Austrian mountains in the summer like a local

Camping in a tent

Camping in a tent is the most common way of camping in the summer and most people pitch up on a dedicated campsite.

Many campgrounds have water and electricity facilities, as well as showers, cooking areas, recreation spaces and even kids clubs. Others have luxury elements like year-round heated pools, saunas, beach volleyball and restaurants.

Campsites are also often located near a lake or at the base of mountains, which means you can wake up to beautiful scenery every morning .

Some of Austria’s top camping associations include Camping Wien, Camping Steiermark and Top Camping Austria.

Camping in a van

Camping in a motorhome is only allowed at campsites in Austria and if someone is caught sleeping in a van in a prohibited area they can be fined.

The only exception is if a driver has to stop and recuperate before continuing driving.

Top camping tips

Austria is packed with stunning natural landscapes, so camping during the summer months is a popular activity – both for Austrian residents and tourists.

For this reason, it’s recommended to book ahead during the peak summer holiday months of July and August, whether planning to camp in a motorhome or tent.

Camping in motorhomes is also becoming more popular at some winter campsites during the ski season, so it’s always a good idea to book in advance.

Additionally, it’s advised to take bug spray when camping in Austria in the summer as insects like mosquitoes and ticks are common in countryside areas.

In fact, tick-borne encephalitis (TBE) – a viral infection transmitted by the bite of infected ticks – is endemic in Austria and it’s recommended to get vaccinated before going on a hiking or camping trip in the country.

The main affected areas for TBE are Tyrol and Upper Austria.

READ MORE: EXPLAINED: What is Austria’s ‘tick vaccine’ and should you take it

Useful vocabulary

Campsite – Campingplätze

Tent – Zelt

Campervan – Reisemobil

Electricity – Strom

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