Cost of living: Why are rents in Austria rising so steeply?

Hayley Maguire
Hayley Maguire - [email protected]
Cost of living: Why are rents in Austria rising so steeply?
Tenants could see some relief around a particular brokerage fee starting in July. (Photo by Abi Tripp / Unsplash)

Benchmark rent rates in Austria are expected to rise again in April, while other rental contracts will also see an increase soon - but there are calls for state intervention. Here's what you need to know.

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Renters in Austria can expect a further rise in the cost of living this year as the benchmark rent rate is set to rise by 8.6 percent in April and current rental laws leave fixed-term renters exposed, according to the Chamber of Labour (AK). 

The Chamber, which represents workers and employees in Austria, issued a warning on Sunday about the expected increase set to be announced by the government in April.

Besides the expected benchmark increase which is based on inflation, the AK are particularly concerned for those on a fixed-term lease contracts because they are usually more expensive than open-ended contracts, as landlords can hike up the rents after the term ends. 


"The latest Statistics Austria figures are dramatic: 30 percent of people in Austria say they expect to have payment problems with housing costs in the next three months - that's a historic high," the AK said.

The chamber added: "What's more, almost every second private existing lease is for a fixed term - four years on average. And a rent increase that goes hand in hand with a contract renewal makes housing extremely expensive. That's why we need to abolish fixed-term leases and introduce a rent cap."

READ ALSO: Renting in Austria: When can my landlord increase the rent, and by how much?

According to the AK press release, on average, fixed-term leases in the private sector are about €130 per month more expensive than permanent leases. "Ultimately, every contract extension or tenant change after a contract expires can be used by landlords to increase the rent," said Thomas Ritt, head of AK's Municipal and Housing Department.

The AK is therefore demanding a one-time rent increase per year plus a rent cap until the tenancy law is reformed in Austria. Additionally, the Chamber of Labour said that fixed-term rental contracts should be abolished for large landlords - only private individuals should be allowed to rent out an apartment for a limited period.

Political pressure

Meanwhile, the centre-left Social Democratic Party of Austria (SPÖ) is calling for state intervention due to the high cost of living, which they claim would be similar to the Greens in neighbouring Germany. 

Building spokeswoman Ruth Becher (SPÖ) said: "The Greens in Germany have understood the seriousness of the situation.

"It is high time that the Greens in Austria and their Turquoise partners in the government also recognise that action must finally be taken regarding rent prices. The state must intervene and freeze rents", she said in a press statement. However, it is unclear to which measures taken by the German Greens she was referring to.

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"We must not leave the population out in the cold. Housing is a basic need and there is no way around immediately freezing rents and limiting rent increases in the future to a maximum of two percent. Because this is the only way we can ensure that housing becomes affordable again for people," Becher said.

Following the warning of the rate rise, the SPÖ also reiterated their demand to the ÖVP-Green government for a freeze on rents until 2025. Already in 2022, benchmark rents in Austria increased by almost six percent.


What is the benchmark rent rate system?

The so-called benchmark rent system (Richtwertsystem) sets a rental limit for specific apartments in Austria, those in older buildings (Altbauwohnungen) regulated by the Guide Value Act (Richtwertgesetz) and that fall within the scope of the Tenancy Act (Mietrechtsgesetzes). 

READ ALSO: Altbau vs Neubau: What’s the difference and which should I rent in Austria?

In practice, it applies to apartments fully subject to the Tenancy Act, with a lease agreement that was concluded after March 1st, 1994, in a building built before July 1st, 1953 and the apartment is considered a "standard apartment under rental law" meaning, among other things, that it has a usable floor space between 30 sqm and 130 sqm, has heating, and at least a room, kitchen, anteroom, lavatory and bathing facilities.

According to the AK, these include a large part of the apartments in Austria. For example, about 64 percent of the rental apartments in Vienna fall under the benchmark rent system.


The regulation determines the maximum amount of rent (with the possibility of certain additions or deductions) that may be charged for a square metre in each province in Austria. It is set by the Ministry of Justice and adjusted every two years based on the inflation rates - the next adjustment is set to come this April.

Changes in the benchmark rate usually cascade to other types of rental contracts in Austria whenever possible. For those with contracts set to expire in 2023, an 8.6 percent increase in benchmark rates may mean an even higher increase in renewed contracts.


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