Vienna real estate market 2023 – rents on the rise, property loses out
The year 2023 was a mixed one for the real estate market and caused quite a stir on the Austrian market. This is also demonstrated by a recent analysis carried out by a team of experts from the domestic real estate portal FindMyHome.at in time for this year’s finale. Inflation, the buyer principle and the KIM regulation, which has made it much more difficult to buy property, are also reflected in the study, which is based on more than 8.2 million views on the popular platform. The most important finding of the analysis: while demand for owner-occupied properties has fallen significantly, interest in rental apartments has increased. In both areas, inner-city properties are still preferred, with the 7th district of Vienna leading the searches for rental apartments and the first district for condominiums.
Bernd Gabel-Hlawa, Co-Founder of FindMyHome.at, on the most important findings from the current analysis, which produced the following winners:
Real estate market Vienna – Rent (ranking by views):
1st place: 1070 Vienna Neubau
2nd place: 1050 Vienna Margareten
3rd place: 1080 Vienna Josefstadt
Real estate market Vienna – Property (ranking by views):
1st place: 1010 Vienna Innere Stadt
2nd place: 1210 Vienna Floridsdorf
3rd place: 1020 Vienna Leopoldstadt
The 2023 real estate year was anything but easy. What were the biggest issues this year and how are they reflected in the statistics?
It is clear that the search for property in 2023 has declined enormously. Due to the wars, high inflation and the tightening of credit, the search for real estate has generally declined – by between 17 and 24% depending on the region. In addition, there is a strong shift from owning to renting, which is a good third on average in our country – also varying depending on the region. In the luxury segment, property ownership remains the leader, but a double-digit increase in rents can be observed in the A-locations of Vienna and in Kitzbühel, for example. The increased demand for exclusive rentals is mainly driven by Ukrainians and Russians – often united under one roof.
Speaking of which: 1010 Vienna has reclaimed its place at the top of the property market. Can the Viennese still afford the 1st district or is it primarily people from abroad who are looking and buying?
In percentage terms, it is still mainly Austrians who buy apartments. In the real high end, things become increasingly international. In terms of rent, however, 1010 brings up the rear.
Why?
In general, there is a strong trend towards reducing rents. This is often not compatible with large-scale rental apartments in the city center. However, I also believe that the statistics are somewhat distorted, as supply has fallen massively in the first segment in particular due to the ordering principle that came into force in July.
In terms of property, on the other hand, it is striking that the recently hyped districts of 14.., 15. and 16. at the end of the statistics. What is the reason here?
All these districts are typical locations for young people and middle-income families. Unfortunately, these two target groups are the biggest losers of the KIM regulation.
For you as a professional – what are the biggest findings and surprises from the statistics?
Since we deal with data from the real estate market on a daily basis, there are few surprises for us. But when you look at all the facts and figures, it is always amazing how quickly a real estate market can turn. The takeaway for me is that unpredictable factors with homegrown factors have gone from a crosswind to a hurricane and all real estate sellers and seekers are getting really battered. The KIM regulation in this sharpness parallel to inflation and – as the icing on the cake, so to speak – the ordering principle on top of that, is a complete failure of politics. The impact is already clear to see: The real estate industry and the sectors surrounding it are collapsing like a kaiser roll and property seekers are frustrated because the concept of the dream property is drifting further and further away from reality.
Let’s take a look ahead – what do you predict for 2024? And what would you wish for?
I firmly believe that there will be an interest rate cut in the third quarter of 2024 and that the KIM regulation will be relaxed. This will boost the real estate market again and also give more breathing space to those who are in a variable loan. What do we want? Above all, peace – first and foremost for the people affected and secondly for us, in order to regain more stability and security.
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