During the year to the second quarter of 2023, the price index for residential real estate in the country fell by 2.27% (-10.18% in real terms), which sharply contrasts with the strong annual growth of 13.13% in the previous year and is the first decline in prices since the second quarter of 2008.
In the second quarter, real estate prices in Austria fell by 0.22% compared to the first quarter (-1.84% in real terms).
In Vienna, in the second quarter of this year, housing prices decreased by 3.06% (-10.91% in real terms) compared to the same period a year earlier, which is the worst indicator since the fourth quarter of 2001. The Vienna residential real estate price index decreased by 0.64% quarter-on-quarter (-2.25% in physical terms). In the rest of Austria, on the contrary, the price index increased significantly by 13.70% (4.50% in real terms), which corresponds to an increase of 13.84% in the previous year.
Demand has fallen sharply in recent months, mainly due to rising interest rates and stricter lending criteria in banks.
Construction activity continues to decline. According to data published by Statistics Austria, in 2022 the total number of planned housing decreased by 18.8% compared to the same period last year, to 58,924 units.
It is noteworthy that in the luxury housing market in Vienna, only about 60% of buyers are Austrians, and the remaining 40% are foreigners, mainly from Eastern European countries such as Russia and Ukraine.Citizens of Switzerland, the USA, the Middle East, and Hong Kong are actively buying apartments in the "super-premium" area of the Austrian capital. The interest in Vienna is explained, among other things, by the fact that the city has been a leader in the ranking of the best cities in terms of quality of life for ten years.
Source: Global Property Guide
