The purchase prices for residential investment buildings (Zinshäuser) in Vienna have risen sharply in recent years. According to a study by the Vienna Chamber of Labor (AK) and the Technical University (TU) of Vienna, the average pre-1946 rental building cost €573,000 in 2000. By 2022, the inflation-adjusted average price had increased to €3.5 million – a 511% jump. “Prices are out of control,” said AK economist Thomas Ritt on Monday.
Ritt described the price development as “insane,” far outpacing inflation, which stood at 62% between 2000 and 2021. Construction costs rose by 98% in that period. He argued that to recoup the higher investment, excessive rents are essential: “Rent gouging is the business model.” According to AK calculations, about 90% of rents in old buildings exceed legal limits.
Ritt also noted a significant increase in purchases by commercial buyers, stating, “The classic Viennese landlord is dying out – it’s becoming a professionalized industry, and that drives prices.” Investors often try to refinance their purchases through legally questionable strategies. One such tactic is demolition and redevelopment, which is exempt from rent controls under the Austrian Tenancy Act (MRG). Selling apartments as ownership units or expanding attics are other methods used to bypass tenant protections. “All these strategies have one thing in common: the tenants have to go,” said Ritt.
Old building rental contracts in Vienna apply to properties built before 1946 and are subject to rent controls under the MRG. Newly built apartments, on the other hand, are largely exempt from these regulations.
One in Five Rentals in Vienna Are in Old Buildings
The study was based on the City of Vienna’s property sales database, which has tracked transactions since 1986. According to the data, there are about 20,000 old residential buildings in Vienna. Between 2000 and 2022, around 6,400 of these properties changed ownership, some of them multiple times. Around 20% of Vienna’s 1.07 million apartments are located in old residential buildings, and 97% of the sold buildings were still occupied at the time of sale.
The AK offers a free rent check service for tenants in old buildings. In addition to legal support, the AK calls for an overhaul of tenancy laws, including a 25% cap on rent surcharges and reclassifying all buildings older than 30 years as “old buildings.” They also criticize fixed-term contracts, as many tenants paying overcharged rents feel too insecure to take legal action. The AK is also demanding higher penalties for rent gouging.
The Austrian Association of Real Estate (ÖVI), in contrast, believes the Zinshaus market has since calmed. The peak was reached in 2022, with prices now down by a third, it stated in a press release. The association blames “excessive lawsuits” by the AK for legal uncertainty, which they say forces landlords to resort to short-term contracts. The ÖVI is calling for clearer laws on price-adjustment clauses, standardized legal lease templates, and an overhaul of Austria’s reference rent system.
