Reader question: Could Austria scrap the broker’s fee on apartment rentals?

Renting a home in Austria can be expensive, especially if you consider the number of fees a renter has to pay. The country is planning some changes, though.

Reader question: Could Austria scrap the broker's fee on apartment rentals?
Will you soon be able to rent homes in Austria paying less? (Photo by Dimitry Anikin / Unsplash)

Austria is one of the best countries to live in, and its cities are among the ones with the highest standard of living constantly. But it is not a cheap place to live, especially concerning rent and property costs.

The average rental price in Vienna is much lower than in other capitals.

According to a European Union research, a 2-bedroom flat in Austria’s capital averages a monthly rate of € 1,250. In Berlin, the price is € 1,400, while in Bern, the average is € 1,550.

Average prices can be tricky, though, and prices in Austria, especially in Vienna, go down substantially when lower-cost subsidised homes, cooperative-based apartments and old rental contracts are taken into account.

READ ALSO: Reader question: How does Vienna’s rent control system work?

None of which are accessible to all residents of Austria, especially those who are just arriving or haven’t lived in the same city for a few years.

The brokerage fees

Besides having to pay high rents, several associated fees weigh on the pocket of renters. One of the most controversial ones is known as the Provision.

The provision is a fee paid to the broker (Makler) after a rental contract is signed. In Austria, this fee is paid by the person renting a property, not by the property owner, even if they were the ones hiring the service.

READ ALSO: Tenant or landlord: Who pays which costs in Austria?

Even if you find a property online, do your research alone, and have no say in who the broker is, you will probably still have to pay their fee. Unfortunately, the price is also quite high, at about two months’ rent.

Is Austria about to change that?

It’s very likely.

In March 2022, the federal government announced that it would scrap the broker fees favouring a “buyer’s principle”. Instead, the person who hires the broker pays the price.

READ ALSO: Renting: Austria to scrap brokerage fees from 2023

Austria wants the person who commissions the real estate broker to also pay the fee in the future. The government estimates that about €50 million a year, which tenants pay, will be at the landlord’s expense.

“It is a great injustice to pay for a service that you have not commissioned yourself’,” minister Zadic said at the announcement. She added that the cost represents a significant financial challenge, especially for low-income families and students.

When will the changes come?

After the changes were announced, a draft law went into the revision process, and it is still in Parliamentary procedures.

The government expects the new law to be valid by the end of 2022 or the beginning of 2023 – and there is a six-month transitional period is provided.

What are the chances of the draft regulation not passing?

Since the current coalition has a majority in parliament, and the draft regulation has not been opposed by any significant opposition party, the rules will likely be put in place by the timeline presented.

READ ALSO: Vienna vs Graz: Which city is better for foreign residents?

Still, the process could be delayed, and changes to the drafted text could make the amendment take longer to be signed into law. Renters waiting for the new rules to be adopted before finding a place to live in Austria will need to consider this before deciding to postpone their plans.

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Cost of living: Austria’s postal service announces prices increases

Prices in Austria continue to rise and, this time, mailing letters and parcels will become more expensive. Here is what you need to know.

Cost of living: Austria's postal service announces prices increases

Austria’s postal service Post said business is “difficult” due to “inflation and uncertainty in the energy market”, stating that the package volume has decreased while their operation costs went up.

The state company’s answer to the challenging scenario is to increase parcel prices, and the changes will be valid starting in October.

Starting on October 1st, prices for posting S letters will go up from €0.85 to €1, M letters from €1.35 to €1.40, S packages from €2.75 to €3 and M packages from €4.30 to €4.50.

READ ALSO: Cost of living: Why are petrol prices in Austria still so high?

“The first six months of 2022 posed major challenges for companies, especially in Europe”, Post said, stating that the “COVID-19 pandemic, its countermeasures and the resulting delays in the global value chain were the starting point for what is now a worldwide inflationary trend.”

“The war in Ukraine has exacerbated the price increases for important raw materials and energy sources. These conditions will continue in the second half of the year. There is also a risk that the energy market will remain difficult to predict and gas supplies in parts of Europe will not be secure.”

Rising inflation and staff shortages

Inflation has been rising in Austria, reaching 9.2% in July, with essential items becoming increasingly more expensive.

READ ALSO: Inflation at 9.2% in July: How to beat rising prices in Austria

So far, the wave of inflation has affected chiefly energy and food prices but has now also arrived in the gastronomy sector, with increasing costs in bars and restaurants across the country.

However, as fuel and energy prices soar, people in Austria will see increases in all sectors, including postage services.

Another major challenge in the Austrian economy is labour shortage – and Post is now having difficulty finding new employees, especially drivers and workers for its distribution centres.

READ ALSO: Five of the biggest challenges facing Austria right now

“We have virtually full employment”, Post CEO Georg Pölzl told the daily Der Standard. He said that the company could immediately hire 1,000 people – if they were able to find the workers.