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Why is home ownership in Austria so low?

Aaron Burnett
Aaron Burnett - [email protected]
Why is home ownership in Austria so low?
A row of houses in Hallstadt, Austria. The alpine republic has one of Europe's lowest home ownership rates. Photo: Daniel Frank on Unsplash

German-speaking countries have some of the lowest rates of home ownership in Europe and Austria is no exception. Why do so many choose not to buy? Here's what the experts have to say.


The 'DACH' region of Austria, Germany, and Switzerland comes at the very bottom of European home ownership rankings, with only about 54.2 percent of people in Austria owning their own home.

That's a bit above the halfway mark to be sure, with Germany and Switzerland being the only two countries in Europe with home ownership rates below fifty percent. About 49.1 percent of people living in a household in Germany own their own home, compared to 42.2 percent for Switzerland.

Austria and its German-speaking cousins are well behind other European countries with much higher rates of home ownership, including the UK, France, and Sweden. These three countries have rates in the 65 percent range. At the upper end of the scale, more than three quarters of Spanish and Portuguese households are home-owners, according to Eurostat numbers from 2021.

Why so low?

David Savasci, Co-Founder and CEO of Miracl, a mortgage broker based in Vienna, says that’s because the trade-offs surrounding home ownership in Austria are simply different than in a lot of other countries. Upfront fees are high, while, by contrast, Austria has more affordable renting offers than might be available elsewhere - particularly in the capital.

Buying in Austria comes not just with the price of the actual home, but with a land transfer tax that the buyer has to pay. This is generally 3.5 percent of the purchase price, but can be at the lower rate of two percent - if the transfer is happening between relatives. Therefore, inheriting a home or taking over one from parents comes with a lower tax bill than buying your own. You'll then have to pay another 1.2 percent to have the property put in the land register. These fees are before other commissions are added, like real estate agent or broker fees.

In the end, the upfront fees can amount to as much as 10 percent of the purchase price.

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Those fees make flipping harder, leading people to wait to buy their “forever home.”

In the meantime, renting remains attractive in many cases.

"The DACH region has a very heavily subsidised housing policy," Savasci told The Local. "In Austria, you see this quite particularly in Vienna, where one in four people live in city-owned social housing."

All these factors work together to create Austrian homeowning habits that looks quite different to those seen in many other countries, with longer-term renting a more viable option until buyers can purchase something to hold long-term - perhaps for the rest of their lives in a "buy good, buy once" mentality.

Austria's lack of inheritance tax and lower tax for transfers between relatives also further incentivise passing down homes as a family asset through longer-term planning as well.

READ ALSO: The hidden costs of buying a home in Austria


Can people in Austria afford to wait to buy?

The waiting game in German-speaking countries, spurred on by high upfront purchase fees, has historically meant that the DACH market hasn’t seen the same highs and lows that the US and UK have.

"The market is rather sluggish and there have hardly been any significant price rises and falls in the last 50 years," said Thomas Beyerle, a professor of real estate and Managing Director at Catella Property Valuation in Frankfurt, Germany. 

Given the price increases of the last few years though, might buying become more urgent for those who can still afford it, particularly given the recent price falls in Austria?

"I don't think there will be a significant change to ownership - rather the opposite,” said Beyerle, who says the upfront fees are even more badly suited to the way people live now.

"The younger generation is much more mobile than their parents and grandparents. They change jobs and cities more often - owning a property for their own use is becoming a ‘burden’ as buying and selling is associated with very high incidental costs."


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