Despite higher incomes and a period of falling property prices, home ownership remains out of reach for many people in Austria.
According to a new study by Bank Austria, the price of a home has dropped by 3.5 percent on average since 2022, while disposable household incomes rose by 23.5 percent during the same period.
However, property still costs about 30 percent more than in 2008, making it difficult for people to save enough to buy a home.
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"The decline in real estate prices, high income growth, and the easing of monetary policy have made home ownership in Austria somewhat more affordable over the past two and a half years," said Bank Austria chief economist Stefan Bruckbauer.
But he added: "Compared to 2008, the beginning of the real estate boom, property prices have nevertheless risen significantly more than incomes."
'Moderate' price drop – but difficult to budget
According to the analysis, rising interest rates on mortgages, and the introduction of stricter lending rules three years ago, triggered a “moderate” decline in real estate costs in Austria. This year, prices have stabilised, said Bank Austria economist Walter Pudschedl.
But affordability hasn’t really improved overall.
To illustrate this, the study compared how many years of average household income it would take to buy a home at different points in time.
In the first half of 2025, the average 100-square-meter condominium (Eigentumswohnung) cost almost 12 times the average annual household income, while a 100-square-meter house cost about eight times the income. The higher figure for apartments reflects the fact that many are located in expensive city centres, while houses tend to be outside urban areas.
Just three years earlier, in 2022, the burden was even heavier: households needed the equivalent of 15 and a half years of income for a flat and 10 and a half years for a house.
Back in 2008, however, homes were far more affordable, costing only 8.5 years of income for an apartment and six years for a house.
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The property price also doesn't factor in other hidden fees – known as Nebenkosten – involved with buying a home in Austria that many potential buyers struggle to budget for.
These include agency or brokerage fees as well as administrative payments like the real estate transfer tax, fees for entering the property into the land register and the mortgage register, and the preparation of purchase contact fees.
Renting is getting more expensive
Just over half of the population owns their home in Austria, with about 45 percent living in rented accommodation, according to Eurostat figures from 2024. It ranks Austria as the country with the second highest proportion of renters in the EU, just behind Germany.
But the persistently high real estate prices are having a big impact on the rental market.
The report from Bank Austria states that demand for rental properties in part due to people not being able to buy homes is pushing rents "above average".
Along with inflation-linked rental contracts, this demand has "triggered a 17 percent increase in rents in Austria since 2022," said Pudschedl.
The economist expects "continued higher momentum" of rental prices in the coming years.
And property prices in Austria are also expected to rise further – "probably more strongly for existing properties than for new builds," Pudschedl said. However, the price hikes are likely to be "moderate, roughly in line with general inflation", he added.
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