Buying home in Vienna: Dream or unfulfilled wish?

Buying home in Vienna: Dream or unfulfilled wish?

Wien, Österreich - The purchase of a home remains a significant challenge for many households, especially in Vienna. In June 2025, an average double earner couple would have to raise 53% of their net income to make a 90 m² apartment. This burden is evident despite an improvement compared to the previous year, when 61% of the income was still needed, reports vienna.at.

The financial market supervision (FMA) has recommended a maximum limit of 40% of the income for a sustainable debt ratio, but many banks have only taken this regulation to a limited extent. This is in contrast to the high real estate prices, which are still an urgent problem. In addition, the interest reductions of the European Central Bank (ECB) have subsided, which further complicated the situation for loan seekers.

criticism of the regulations and the FMA

The KIM Ordinance, which regulates lending and has no longer been legally binding since the end of June 2025, stipulated that banks have to request an equity share of at least 20% and a maximum debt rate of 40%. Interestingly, 90% of the loans awarded did not meet the criteria before this regulation came into force. Despite the temporal restrictions, around 87% of the newly awarded loans met the KIM criteria in the second half of 2024. Nevertheless, both banks and politics, including representatives such as Reinhard Langthaler and Johannes Wild, criticize the FMA, while FMA boss Helmut Ettl has referred to recommendations since 2016.

A significant volume of unused exceptions that amounts to around 600 million euros shows that the KIM-VO is not the limiting factor for lending. Many banks therefore used less than half of their exceptional account.

recommendations for borrowers

In order to be better prepared in the current situation of rising interest rates and inflation rates, the financial market stability committee (FMSG) recommends relying on fixed interest models in the upcoming credit negotiations. In April 2025, 1,577 million euros were awarded to new loans, with 88% to fix and only 12% were offered to variable interest rates. The fixed interest rate has increased in recent years and has been reported since mid-2023 in over 75% of the new awards, such as fmsg.at

The situation on the real estate loan market has improved since the introduction of the KIM-VO, but remains challenging. In particular, the increase in loans with variable interest rate since mid -2022 illustrates the growing risks for borrowers.

Future view and risks

Presenting preparation for possible future scenarios is crucial. This includes interest rate increases, economic declines and potential loan butterfalls. A current WhitePaper from Deloitte indicates the importance of being able to counter these challenges with tailor-made solutions. Workshops for the discussion of specific risks and measures are also on offer to support both the real estate and the financial sector.