Home ownership became cheaper again in the fourth quarter of the previous year - albeit only minimally and at a slower pace. Compared to the same period last year, prices fell by 1.1 percent, and by 0.2 percent compared to the third quarter of 2024, reported Raiffeisen Research on Tuesday. Residential properties are therefore still 26 percent more expensive in Austria than before the pandemic or in the fourth quarter of 2019.

Rising Prices Forecasted by 2026 at the Latest

"Since reaching the price peak in the third quarter of 2022, home ownership prices have only fallen by five percent," explained Raiffeisen Research economist Matthias Reith. New apartments continued to become more expensive last year. Falling prices were still only seen in used properties.

A feared price plunge did not occur, Reith said. "The residential real estate market has reduced its cruising altitude quite controlled and is likely to maintain this altitude in 2025, with an ascent possibly following by 2026 at the latest." Factors indicating a turnaround in the real estate market include the growing population and income, as well as falling interest rates and completion numbers.

Pressure on Rental Costs

The number of advertised rental apartments has significantly decreased in the last two and a half years, especially in Vienna. This does not remain without consequences for rental prices. Although there are regions where rents have increased at best with inflation, in growth regions, the offered rents have risen more sharply than the general inflation. In Vienna, for example, offered rents have increased by 13.2 percent since the third quarter of 2022 - while inflation has risen "only" by ten percent. Real rent cost increases were also seen in Salzburg and Vorarlberg. The burden, however, has hardly increased in Burgenland and Styria.

(APA/Red)

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