Will 2024 be a good year to buy property in Vienna?
After a peak in property prices in the Austrian capital, some experts now believe the bubble might have burst. But will prices fall even more?
Property prices in Austria have gone up for years, peaking just after the coronavirus pandemic - which even led experts to warn repeatedly of a bubble in the country.
With the interest rate turnaround starting in 2022 and changes in the rules for mortgages, the market then went upside down, bringing the real estate boom to an abrupt end. In Vienna, prices have fallen more sharply than in the rest of the country, by as much as four percent in the third quarter of 2023.
So, is now a good time to buy real estate in the Austrian capital, or are prices expected to fall even more?
Overvaluation and excess demand
According to Austria's National Bank, there is still an overvaluation of more than 20 percent for real estate in the country and 37 percent in Vienna, which means prices could still lower in the months ahead.
The price increases in the Austrian capital had the same drivers as in major German cities and, according to the experts, if they follow the downward trend of the neighbouring country, could fall further by up to six percentage points.
At the same time, though, there is a significant excess demand of around 55,000 residential units, according to estimates by Fabian Blasch, analyst at Raiffeisen Bank International (RBI). Additionally, the long period of low interest rates and the low returns on fixed-interest investment strengthened real estate as a safe investment for those who can afford it - fuelling prices still.
READ ALSO: What experts say will happen to the Austrian housing market in 2024
Population growth
One thing that could cushion the drop in prices - and experts believe it will - is Vienna's demographic development, which provides a "healthy foundation" for real estate prices, according to statements given by an RBI analyst to Die Presse.
READ ALSO: Austrian property prices continue steady decline throughout 2023
Vienna has seen recent strong growth in its population of around 14 percent.
The German cities of Düsseldorf and Cologne, with similar real price growth, only have population growth of seven percent and eight percent, respectively, according to the report. In addition, the complete slowdown in the construction sector is making housing supply scarcer.
Still, analysts expect a nominal price correction of a maximum of 15 percent this year and next. "The longer-term outlook for the Viennese market remains favourable," Blasch told Die Presse.
One thing they agree on: property prices are likely to fall still. How much depends on how each factor will influence the market in 2024.
The experts' tips for buyers
A RE/MAX property report brought tips for those looking to buy property this year in Austria.
According to real estate professionals, it’s crucial to clarify your financial options before starting your property search, paying particular attention to conditions and one-off fees for financing.
It’s also worth checking used residential properties in many Austrian regions, as there is significantly more supply of this type of property compared to new builds. However, before “buying second-hand”, it’s essential to check the maintenance of the building, as well as any monthly operating costs.
The experts also recommend reading the minutes of the last owner’s meeting.
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Property prices in Austria have gone up for years, peaking just after the coronavirus pandemic - which even led experts to warn repeatedly of a bubble in the country.
With the interest rate turnaround starting in 2022 and changes in the rules for mortgages, the market then went upside down, bringing the real estate boom to an abrupt end. In Vienna, prices have fallen more sharply than in the rest of the country, by as much as four percent in the third quarter of 2023.
So, is now a good time to buy real estate in the Austrian capital, or are prices expected to fall even more?
Overvaluation and excess demand
According to Austria's National Bank, there is still an overvaluation of more than 20 percent for real estate in the country and 37 percent in Vienna, which means prices could still lower in the months ahead.
The price increases in the Austrian capital had the same drivers as in major German cities and, according to the experts, if they follow the downward trend of the neighbouring country, could fall further by up to six percentage points.
At the same time, though, there is a significant excess demand of around 55,000 residential units, according to estimates by Fabian Blasch, analyst at Raiffeisen Bank International (RBI). Additionally, the long period of low interest rates and the low returns on fixed-interest investment strengthened real estate as a safe investment for those who can afford it - fuelling prices still.
READ ALSO: What experts say will happen to the Austrian housing market in 2024
Population growth
One thing that could cushion the drop in prices - and experts believe it will - is Vienna's demographic development, which provides a "healthy foundation" for real estate prices, according to statements given by an RBI analyst to Die Presse.
READ ALSO: Austrian property prices continue steady decline throughout 2023
Vienna has seen recent strong growth in its population of around 14 percent.
The German cities of Düsseldorf and Cologne, with similar real price growth, only have population growth of seven percent and eight percent, respectively, according to the report. In addition, the complete slowdown in the construction sector is making housing supply scarcer.
Still, analysts expect a nominal price correction of a maximum of 15 percent this year and next. "The longer-term outlook for the Viennese market remains favourable," Blasch told Die Presse.
One thing they agree on: property prices are likely to fall still. How much depends on how each factor will influence the market in 2024.
The experts' tips for buyers
A RE/MAX property report brought tips for those looking to buy property this year in Austria.
According to real estate professionals, it’s crucial to clarify your financial options before starting your property search, paying particular attention to conditions and one-off fees for financing.
It’s also worth checking used residential properties in many Austrian regions, as there is significantly more supply of this type of property compared to new builds. However, before “buying second-hand”, it’s essential to check the maintenance of the building, as well as any monthly operating costs.
The experts also recommend reading the minutes of the last owner’s meeting.
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