Lower Austria: Cheap home ownership market with new demand!

Lower Austria: Cheap home ownership market with new demand!

Compared to federal states, Lower Austria presents itself as an attractive location for home ownership. According to a current study by Raiffeisenlandesbank NÖ-Wien, Raiffeisen Research and Raiffeisen Immobilien, there are signs of stabilized affordability on the real estate market. The situation, exacerbated by increased demand for residential real estate, suggests that the trough has bottomed out. The housing loan volume of the Raiffeisen Banking Group Lower Austria-Vienna increased by 1% to 200 million euros by the end of March 2025, which is seen as a positive sign.

Martin Hauer, CEO of Raiffeisenlandesbank NÖ-Wien, emphasizes that the lower interest rates and rising real incomes have led to a slight relaxation in the affordability of housing. This development comes at the right time as demand for real estate financing is increasing again. With a total financing volume of around 14 billion euros, the Raiffeisen banks are the leading housing finance providers in the region.

Price dynamics in the real estate market

Another interesting observation is the price decline in the Austrian residential real estate market, which, despite a slowdown, continued in 2024. This year, the decline in single-family homes fell to 1.1%, down from 2.3% in 2023. However, a slight increase in prices is expected for 2025, supported by lower interest rates and an improvement in the income situation. In the fourth quarter of 2024, the price per square meter of a single-family home in Lower Austria was around 3,370 euros, which makes the region appear cheap compared to other federal states.

Property prices have risen significantly over the past decade while average household incomes have stagnated. This has exacerbated the affordability situation in many popular regions, particularly for single-family homes. The reasons for this are primarily the increased real estate prices and higher interest rates, as Michael Höllerer, General Director of Raiffeisenlandesbank NÖ-Wien, notes. These burdens can negatively influence the purchasing decisions of potential buyers.

Changing trends and outlook

Observations from the Remax index show that the Austrian real estate market is gradually recovering. Fueled by increasing demand and increasing supply, an upward movement in prices and purchases is forecast. However, offers in the rental segment are rare, especially in urban areas where demand is significantly higher. The decline in rental offers by over 13% is making finding a suitable rental apartment increasingly difficult.

Another notable trend can be seen in the price differences within Lower Austria. While Mödling is considered one of the most expensive districts, the price per square meter varies considerably in other regions. In Zwettl it is 1,845 euros and in Mödling it reaches peak values ​​of 5,420 euros. This price difference is perceived by market participants as an opportunity and a challenge at the same time. Buyers are increasingly willing to accept smaller spaces and renovate used properties, making it easier to adapt to changing market conditions.

For the future, there is cautious optimism regarding the demand for single-family homes in the medium price segment between 300,000 and 400,000 euros. The expiry of the KIM regulation could also create more flexibility in financing housing, which would be particularly beneficial for young families. Overall, it can be seen that the market is trending towards normality and the conditions for buyers and sellers are adapting.

In summary, the current market situation makes it clear that while the real estate market in Lower Austria offers advantages, significant challenges also remain that need to be taken into account. Buyers and sellers are required to reconsider their expectations and strategies in a changing market environment.