Real Estate Market Picks Up Again – Housing in Demand Like Never Before

Residential properties were the largest asset class this year with a share of 57 percent in the first half of the year. The interest of investors has increased significantly: In the second quarter, their share was 68 percent.

High Interest in Existing Properties in Vienna

There was particularly high interest in existing properties in Vienna. The supply of residential properties under development or construction has decreased significantly - and these properties are primarily aimed at owner-occupiers. Therefore, one could certainly speak of a supply shortage, noted EHL. In terms of yield, apartments in the provinces brought significantly more than in Vienna - making the purchase of apartments in the provinces - also for residents - significantly more attractive than in the federal capital.

Around 16 percent of the transaction volume this year between January and June was accounted for by offices - and thus less than in previous quarters. There is a lack of "core objects" - sought after are high-quality existing properties with a volume of 20 million euros to 50 million euros in central locations with stable leasing. According to EHL, there are currently not enough office projects in planning. And those who have a sought-after office project are currently waiting, as prices have not yet reached the level of 2022.

Demand for Hotels Increases

EHL reports strong demand in the hotel segment. Even though this is not fully reflected in the 14 percent share of the transaction volume: "A large number of transactions are currently being negotiated on both the operator and investor sides," EHL states. Retail properties were not in high demand in the first half of the year - however, EHL also points to numerous negotiations that should be concluded this year. Properties in the logistics sector remain significantly less in demand.

Yields have remained largely stable so far this year. According to EHL, there have been selective downward adjustments in residential and retail properties - meaning higher prices. With offices and shopping and retail centers, yields of more than 6 percent could at best be achieved. The hotel and logistics sectors had maximum yields slightly below 6 percent.

Prices Rise, Yields Stable

Moderate interest rates and a recovering economy could lead to slightly declining yields in the medium term, according to EHL. Investors should therefore prepare for rising real estate prices.

The majority of the money this year came from family offices and private investors with 63 percent, and 18 percent came from special funds. The public sector was the third largest buyer group with 9 percent, followed by insurance companies and pension funds.

(APA/Red)

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