For those with property in Austria that they want to sell, there is bad news.

Due to inflation and rising interest rates, the Austrian housing market is seeing a major downturn, new figures from the real estate agency Remax show, with some states worse effected than others. But across the country, a seller’s market has become a buyer’s market, though many buyers are unable to get credit.

Almost half of Austria’s population are renting, one of the highest proportions in Europe, with one of the lowest home ownership rates, alongside fellow German-speaking DACH region countries Germany and Switzerland.

So these figures could make buying more affordable – but only if you happen to fit the strict mortgage requirements, or have a few hundred thousand euros lying around.

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Number of house sales drops

The number of properties sold in Austria has dropped by a quarter, with only 20,000 sold in the first half of this year compared to 26,000 in the same period last year, according to the latest research.

The total value of property sales has dropped by a similar amount, from €7.55 billion in in the first half of 2022 to €5.6 billion in the same period of 2023. This brings the market back to levels last seen in 2018/2019.

The sharpest drops in sales have been seen in Salzburg, Voralberg and Lower Austria, but all states except for Burgenland have seen the housing market contract.

And for the first time since 2015, prices have fallen, with the median price of an apartment worth just over €250,000 with an average price per square metre of just over €4.

But though property prices have not reduced that much, by an average of 1.6 percent, this depends heavily on in which of Austria’s nine Bundesländer (federal states) you are, with buyers paying 10 percent less in Burgenland, the state with the lowest GDP per capita along the border with Hungary.

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The numbers of properties on the market has risen significantly too, with buyers unable to get sufficient credit.

“The number on offer has risen,” said Bernhard Reikersdorfer, Managing Director of REMAX Austria.

“Those who want to buy currently have a significantly greater choice. Due to the increasingly strict mortgage requirements, rising interest rates and general insecurity, demand has clearly gone down. Currently, many have to postpone or even give up their plans and dreams of property ownership.”

Like many in the industry, Reikersdorf called on mortgage requirements to be updated. “The current rules put up impossible hurdles for even high earners to manage to get their own property,” he said. 

What’s happening in Vienna?

In the capital Vienna, the change has been even more marked, with magazine Finanzmarktwelt describing the city as “the epicentre of the crisis in Europe”.

Formerly known as “concrete gold”, Viennese properties have dropped especially for landlords buying entire buildings market, with 60 percent fewer buildings sold, with prices reducing in some cases as much as 20 percent when the seller is in a hurry, according to Eugen Otto, managing director of estate agency Otto Immobilien.

Vienna’s districts have had very different responses to these new circumstances, with prices in Penzing rising by 17 percent and those in the Landstraße Bezirk dropping by 21 percent.