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Development of Austrian real estate prices 2019/2020

Despite the slowing economy, Austrian real estate prices continue to rise sharply. During 2019, the real estate price index in Austria increased by 3.9% year-on-year. Based on data from the Oesterreichische Nationalbank (OeNB) in 2020, despite complications related to covid-19, year-on-year growth in real estate prices accelerated, especially in the second quarter when the index reached 5.2%.

The average price of new flats is growing the fastest. In 2019, growth reached 8.53%.

One of the reasons for rising prices is the declining supply of real estate for sale, which far exceeds demand. In 2019, the total number of dwellings approved for construction in Austria decreased by 2% year-on-year. Higher demand is also documented by the increasing volume of housing loans which exceed in total EUR 120 billion. This is a 5.5% interannual increase.

Another important factor is a growing number of foreign investors who perceive the Austrian real estate domain as a haven for their investments. Foreign investors prefer especially Vienna, Salzburg and the Alpine regions. The share of demand from foreign investors is about 40%.

This trend continued in 2020, when covid-19 further accelerated interest in Austrian real estate, as revealed in the year-on-year rise in property prices in the second quarter.

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