Fewer new rental apartments in Vienna: Financial experts are calling for more subsidies and tax incentives for the housing market.

Fewer new rental apartments in Vienna: Financial experts are calling for more subsidies and tax incentives for the housing market.

According to a report by immobilien-redaktion.com, there are worrying developments on the Austrian real estate market, especially in the big cities. The number of new rental apartments will decline by more than 50 percent by 2024, while demand for condominiums will increase again. Developers are reducing their activities even more than planned. In order to counteract the declining supply of housing, subsidies and tax incentives are seen as indispensable.

The declining development in housing construction will be noticeable throughout Austria, especially in large cities such as Vienna. A drastic decline in newly built, privately financed rental apartments is expected as early as the first half of 2024. Only around 2,500 rental apartments will be added in Vienna, which corresponds to a decrease of more than 50 percent compared to the previous year. A similar trend is also emerging in other state capitals such as Graz, Linz, Salzburg and Innsbruck.

The reduced availability of rental housing is expected to impact rental prices, with a moderate increase expected. At the same time, demand for condominiums is expected to pick up again, particularly due to expected cuts in key interest rates. This could lead to higher returns, but also to rising purchase prices.

However, Karina Schunker, Managing Director of EHL Wohnen, warns of a further downward trend in supply development and cites the rent cap as a potential obstacle to investment in existing properties. In order to counteract the structural housing shortage, she is calling for far-reaching measures, including subsidies for thermal renovations, preferential depreciation options in new residential construction and faster building permit procedures.

It is clear that current developments on the Austrian real estate market require serious action to alleviate the impending housing shortage. The implementation of appropriate measures is essential in order to continue to provide enough living space in the future and to improve the living situation for citizens in metropolitan areas.