
Housing in Austria remains unaffordable, whether for purchase or rent, with financing continuing to be a major issue, according to Karl-Heinz Strauss, CEO of construction firm Porr.
“The main problem remains financing,” Strauss told the Austria Press Agency (APA). He noted that since the COVID-19 pandemic, non-profit housing providers have failed to create enough affordable homes, while developers have focused on luxury properties. “Relief in new housing construction will only come in 24 months at the earliest.”
The issue of property purchase also remains unresolved. “It’s still expensive,” Strauss said, highlighting high interest rates and banks’ reluctance to take on more risk. “Banks are applying the brakes because they simply do not want to extend their risk, and commercial projects are thought to be impacted by the crisis, with home office trends,” he explained. Developers have bought large plots of land and built extensively, but buyers are unable to secure financing.
“The so-called investor, who buys apartments for rental purposes, currently still cannot secure financing,” Strauss added. He warned that rents are likely to rise due to limited supply.
Affordable housing is in short supply, with private rents rising to €17–19 per square metre, even in less desirable areas. “The non-profits have built too little – for the last four or five years,” Strauss stressed. While 40,000 apartments are built annually, demand far exceeds supply. “Because Austria is growing, there simply aren’t enough apartments. And many of those that are built are simply unaffordable,” he said.
A Broader Housing Crisis
Strauss views the issue as a broader housing crisis, particularly in single-family homes and non-profit housing. “The expensive financing is holding things back,” he said. However, Porr is less affected, as only 8% of its construction output is housing. “The majority of our work focuses on infrastructure and industrial projects,” Strauss noted.
He also raised concerns over the decentralisation of housing finance. With individual federal states responsible for allocating housing funds, many have used the funds to cover budget gaps. “Housing funds are a big issue,” Strauss said, calling for the reintroduction of earmarked funding, which was successful in creating affordable homes in the 1970s and 1980s. “Earmarking should be reintroduced,” he insisted.
Calls for Reform and Targeted Migration
Strauss urged Austria’s next government to implement “fundamental structural reforms” across sectors, including tax policy, industry, education, pensions and migration. He called for long-term tax reform to create performance incentives, saying, “performance must be rewarded.”
On migration, Strauss argued that Austria needs a more targeted approach. “Short- to medium-term, we need targeted migration to fill jobs, and Austria must be able to define for itself who can come under what conditions,” he said. He called for Austria to have control over immigration, similar to countries like Canada, Australia and the USA.
Strauss also criticised the current political confusion surrounding asylum and migration, which has left the public feeling disconnected from the government. “The ruling politics is too far removed from the citizens,” he concluded.
Despite the challenges, Strauss remains optimistic. “I believe housing construction will improve by the second half of 2025,” he said, pointing to a recovery in non-profit housing and single-family homes. “If we start building now, the pressure will remain for another 24 months,” he warned.