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RENTING

Why Salzburg, Tirol and Vorarlberg have some of Austria’s highest rents

According to new figures published by Statistics Austria , Salzburg, Tirol and Vorarlberg had the highest rents in Austria, with a national average increase of 6.7 percent over the course of 2023. What’s leading to these rental surges?

Published: 19 March 2024 17:05 CET
Updated: 24 July 2024 15:48 CEST
Why Salzburg, Tirol and Vorarlberg have some of Austria's highest rents
Salzburg now has the highest average rents in Austria, at €11.30 per square metre. Photo: Hannah Alkadi . Pixabay

As is often the case, a sharp rise in average rental prices is a combination of factors – market conditions, and the demand a certain location generates. 

Market factors

Despite the Richtswert system, introduced in 1994 to regulate the standard rental price per square metre of apartments across each of Austria’s federal states, inflation and cost-of-living increases—such as those introduced after the beginning of the war in Ukraine—can and have impacted rents. 

Salzburg now has the highest rents, averaging €11.30 per square metre. Tirol and Vorarlberg follow closely behind, at 10.9 and €10.7, respectively.

Carinthia and Burgenland have the nation’s cheapest rents, at €7.30 and €7.20 per square metre.  

Upon releasing today’s figures, Statistics Austria General Director Tobias Thomas noted that rental price increases have been “significantly less strong than in previous quarters, but still about twice as high as before the strong surge in inflation.” 

Recent government moves to incentivise owners to make their properties more energy-efficient may also be contributing to increases —with a fifteen percent tax deduction available on ‘climate-friendly’ refurbishments, many landlords may be accruing additional costs renovating properties. 

Another factor that may impact rental rates is the new levies that individual states will be permitted to apply to those purchasing or maintaining second homes and vacation rentals, particularly in areas with high visitor numbers. This is particularly relevant regarding Salzburg and Tirol. 

Read More: How Austria’s new plans to avoid a housing crisis will affect residents

Location plays a role

The three states with the highest rental prices in Austria also share several factors in common. 

Salzburg, Tyrol, and Vorarlberg are all high-tourist areas. While Salzburg’s beauty, heritage, and links to Mozart are perennial draws for visitors, Tyrol and Vorarlberg are mountainous regions with several popular ski resorts. They are a favourite destination for visitors throughout the year. 

This popularity results in investors using properties for short-term Airbnb rentals – something many states are cracking down on to stop a housing shortage and prevent soaring rents. 

Read More: EXPLAINED: What are Austria’s rules for Airbnb rentals?

These three states are also experiencing a business boom, with many leading companies attracting talent. 

Salzburg has energy drink giant Red Bull and supermarket holding company Hofer, while Tyrol has a significant Sandoz antibiotic manufacturing plant and several market leaders in timber, such as Johann, Egger and Binderholz, headquartered there. 

Vorarlberg is also a centre for machinery production, with market leaders Liebherr, Suzano, and Alpla all having a significant presence in the state. 

Another factor that Salzburg and Vorarlberg have in common is their border with Germany—cross-border traffic and tourism lead to a high demand for rental properties.  

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RENTING

What tenants in Austria need to know about getting their rent reduced

From construction noise to broken utilities, various issues can allow tenants in Austria to request a rent reduction. Learn the steps to follow and when legal action might be necessary.

Published: 19 September 2024 15:02 CEST
What tenants in Austria need to know about getting their rent reduced

In Austria, tenants can legally request rent reductions if their rental property’s usability is significantly impaired. 

According to MieterHilfe, the association that helps renters in Vienna, Section 1096 of the Austrian Civil Code (ABGB) regulates this. The ABGB covers rental agreements for all properties. 

The law offers protection when tenants experience issues like heavy construction noise or utility outages (such as gas, electricity, or water). However, knowing when and how to apply for a rent reduction and understanding the process can be tricky. Disputes often end up in court and are decided on a case-by-case basis.

READ ALSO: Can my landlord in Austria increase the rent whenever they want?

When you can ask for a rent reduction

If your rental property’s usability is restricted, you can apply for a rent reduction. Common examples of restricted usability often include disruptions in gas, electricity, or water supplies, major construction noise from remodelling, damage to property that prevents proper use, such as a broken heating system, and more. 

Importantly, tenants can claim a rent reduction even if the landlord is not directly responsible for the impairment. However, the extent of the usability issue must be clear, and the tenant must notify the landlord to allow them to fix the problem. Additionally, if a tenant repairs the issue, the rent reduction period ends as soon as the repair is made.

Not all impairments qualify for a rent reduction, though. For example, minor inconveniences or defects, issues that the tenant was aware of when signing the lease, impairments caused by the tenant’s actions and situations where the tenant has already waived the right to a reduction do not count.

An attic room can get extremely hot without air conditioning (Photo by Jakub Żerdzicki on Unsplash)

If there is a dispute, the court will decide the extent of the rent reduction, considering objective and subjective factors. For example, households with small children or pregnant women might receive higher reductions.

READ ALSO: Tenant or landlord: Who pays which costs in Austria?

MieterHilfe has a table with many recent cases that can give you an idea of the causes of rent reduction and the amount tenants received. For example, in one case in Vienna, the flat had significant mould infestation, and the tenants received a 75 percent rental reduction. In another case, rent was reduced by 30 percent because of “unhealthy odours” from the rubbish room that affected half of the flat.

In one case, dangerous electrical cables were accessible inside the flat, and the tenant did not have to pay any rent until the issue was fixed.

Things get more complicated when it comes to noise. In one case in 2005, the tenant got a 15 percent rent reduction due to the consequences (noise and smell nuisance) of a garage construction in the neighbouring property, but not a reduction when the next-door property was doing “normal construction work.”

Another common complaint tenants have is regarding heat, especially in Dachgeschoss apartments (attic apartments), which can get extremely hot due to the lack of ventilation and their location in buildings. In one case, the air conditioning system was positioned so unfavourably that the rooms were not cooled —the tenant got a 6 percent reduction in rent.

In another, though, the complaint regarding excessive heating was dismissed, and the tenant received no reduction because they had rented the room without any reservation or questioning, even though the place had no sun protection or air conditioning.

READ ALSO: What happens when my rental contract expires in Austria?

Legal action and rent payment strategies

Tenants must be cautious when pursuing rent reductions, the renter’s association say. Two approaches are commonly used.

You can continue paying the total rent while negotiating. The tenant informs the landlord about the issue and continues paying the total rent but reserves the right to claim a reduction later. This can be useful in avoiding eviction risks.

Or, they can reduce rent directly. This means the tenant pays a reduced amount but informs the landlord in writing. If the landlord disagrees, they may take legal action, and the court will decide the appropriate – if any – reduction.

In both cases, it is essential to notify the landlord in a verifiable form, such as a registered letter, to ensure the process is documented.

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