If you like the idea of living in historic Vienna or exploring the great outdoors in the Alps, then make sure you have a healthy bank balance.
Austria – as beautiful as it is – is not a cheap place to live and is becoming even more expensive due to a high inflation rate.
Here's a breakdown of why Austria is so expensive, including the average cost of living (and how much you need to earn for a good life), the property market and some key regional differences to be aware of.
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The average cost of living in Austria
Many international residents will find everyday living costs in Austria to be expensive, especially for those that come from countries with a much lower cost of living.
However, the average cost of living varies across the country. For example, Vienna and Innsbruck in Tyrol are two of Austria’s most expensive cities, but more affordable places to live are Graz in Styria and Klagenfurt in Carinthia.
In Vienna, the average price for a one-bedroom apartment in the city centre is €915, going up to €2,000 for a three-bedroom apartment, according to Expat Arrivals. Whereas in Graz, the average cost of a one-bedroom city centre apartment is around €609, and a three-bedroom apartment is €1,170.
Other markers on the cost of living are an average of €1.24 for a litre of milk, €1.99 for a loaf of fresh white bread and €1.08 for a 0.5 litre bottle of domestic beer.
But to give you an idea of how much you need to earn to afford the essentials and have a good life in Austria, the average yearly salary is €49,609, according to online job platform Step Stone.
A word of warning though – the gender pay gap in Austria prevails. The average annual salary for a man is €52,633 and for a woman, it is €44,330.
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The impact of inflation
It’s no secret that high inflation has swept across Europe throughout 2022, especially since Russia’s invasion of Ukraine in February, and Austria has not been spared.
In November, inflation in Austria was 10.6 per cent. Although this was a reduction on 11 percent in October and there is speculation that the peak may have passed.
However, the result is many essential items in Austria are now more expensive than they were a year ago, including groceries.
A recent report by Austria's Chamber of Labour shows the cheapest groceries at Hofer (Austria’s Aldi) went up by 37.5 percent between September 2021 and September 2022. And at Penny, another discount store, prices have increased by 38 percent during the same period, followed by 34 percent at Lidl, reports ORF.
The cost of gas and electricity is also going up in Austria, although the Austrian government recently announced an electricity price cap that will stay in place until June 30, 2024.
Inflation has even hit the Christmas markets in Vienna with the Pfand (deposit) for a cup of Glühwein (mulled wine) costing more this year.
Hannes Dejaco, who runs several large Christmas markets in Vienna, explained: “Inflation and the cost of producing the cups and also the logistics of the whole cleaning service have gone up a lot now, and that’s why the four euros.”
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The Austrian property market
It’s not just the price of day-to-day expenses that are high in Austria. Big life purchases like property have become even more expensive in recent years.
In August 2022, consulting Deloitte released its annual Property Index and named Austria as Europe’s second most expensive market for new apartments (the UK took the top spot).
The average price per square metre for a new apartment in Austria hit €4,742 in 2021 – up 11 percent on 2020’s prices. In the first quarter of 2022, those prices went up again by a further 13 percent.
Deloitte’s Gabriele Etzl said: “The Covid-19 crisis and the historically low-interest rates unleashed a veritable flight into ‘concrete gold’. At the same time, except for some Viennese districts and small towns across Austria, the supply of new dwellings is scarce.”
The Deloitte Property Index, which is an overview of the European residential property markets, shows that property prices in Vienna increased by 8.2 percent in 2021 to €5,788 per sqm.
However, Austria's capital is still significantly cheaper than other key European cities. For example, the average price per sqm in Paris was €13,462 and Munich was €10,500.
Meanwhile, rent prices in Austria are rising at the fastest rate in almost two decades, according to the latest data by Statistics Austria.
In the third quarter of 2022, the average price for rent (including operating costs) rose to €8.8 per square metre per month. This was 3.1 percent higher than in the second quarter and seven percent higher when compared with the same period in 2021.
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Regional differences
Even though, in general, Austria is an expensive country, not every region is the same with some stark differences in the cost of living depending on where you are based.
Burgenland in the east of Austria has some of the lowest prices for essentials like accommodation. Unfortunately, it also has some of the lowest wages and a small jobs market compared to other states.
Then there are western states like Salzburg, Tyrol and Vorarlberg that are popular with tourists and those seeking an outdoor lifestyle. As a result, prices for everything from accommodation to food and fuel are high, while wages are often below the national average.
But the capital Vienna is actually an affordable place for renters – something that can’t be said for most capital cities around the world. This is mostly due to a low-cost housing policy by the City of Vienna and has resulted in it being named “the world’s most liveable city” several times.
Public transport in Vienna is also very affordable with a single ticket on the Wiener Linien (Vienna’s public transport operator) costing €2.40. An annual pass can be picked up for €365, making it just €1 per day to travel on public transport.
Additionally, the cost of childcare differs between regions, especially when comparing places like Vienna, where there is access to heavily subsidised services, and states like Tyrol where childcare is much less subsidised by the provincial government.
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