Viennese real estate market before crisis: emergency aid for small businesses required!

Viennese real estate market before crisis: emergency aid for small businesses required!

Wien, Österreich - The specialist group of real estate and wealth scattering countries in Vienna reacted to the current challenges of the Vienna real estate market with a clear appeal. Around 4,000 member companies that consist almost exclusively from one-person companies as well as small and medium-sized and medium-sized companies are affected by the dramatic decline in new construction and renovation. The majority of these companies are real estate agents, followed by property managers and builders. In recent years, the Vienna real estate market, which has been exposed to many crises, has to struggle with a considerable price pressure, especially due to an increase in interest rates since July 2022 and tightened loan girting regulates in summer 2023. According to OTS there is also an alarming number of unshaled old buildings in Vienna, which also makes the situation more difficult.

The specialist group therefore demands rapid solutions to cope with the falling numbers and uncertainties in the legal framework. In particular, the rising costs are a major challenge for member companies. They have passed five basic positions that are intended to serve as guidelines. This includes the recognition of the commercial real estate industry as an equivalent partner and the elimination of hurdles for renovations and affordable residential construction.

price development and market conditions

The Vienna residential property market recorded the largest price decline in Austria in the first three quarters in 2023 with a minus of 4 percent in the year. This development is twice as strong as in the rest of Austria, where a decline of 8 percent is expected. Forecasts for 2024 indicate that prices in Vienna will decrease again by 15 percent. Experts see this correction as a consequence of the price buoyancy of the past two decades, which is now replaced by a moderate correction phase, as reported.

Die steigenden Baukosten sind hauptsächlich auf Lohnsteigerungen zurückzuführen, was Neubauten in Wien weiter verteuert. In the third quarter of 2023, construction costs rose by 2.2 percent, while in the rest of the federal territory by 4.6 percent. Used residential units in Vienna, on the other hand, are almost 7 percent cheaper, which could offer buyers a certain relief. Despite these declines, the financing of residential property remains challenging, which increases the demand for rental objects and ensures a forecast increase in rents in 2024

The way forward

With the call for cooperation, the specialist group underlines the need for a transparent legal situation and the de -bureaucratization in the non -profit and municipal residential sector. If the challenges are not addressed, an impending crisis could not only endanger the entire residential real estate market in Vienna. There is a clear need for action to recognize the achievements of the commercial real estate industry and to use this as an opportunity for a positive development.

Overall, the market is in a consolidation phase with fewer transactions. While around 145,000 real estate transactions were still recorded in 2022, around 110,000 will be expected for 2023. These figures illustrate the uncertainty and wait for stabilizing the market.