Austria’s property market saw a modest decline in prices during the fourth quarter of last year, with prices dropping by 1.1% compared to the same period the previous year, and by 0.2% compared to the third quarter of 2024, according to a report from Raiffeisen Research.

Nevertheless, residential properties in Austria remain 26% more expensive than before the pandemic, or compared to the fourth quarter of 2019.

Despite the overall dip, new-build flats continued to see price increases. In contrast, second-hand properties were the only sector where prices fell.

“Since the price peak in the third quarter of 2022, property prices have only dropped by 5%,” explained Raiffeisen Research economist Matthias Reith.

Future Price Outlook

“The housing market has steadily reduced its altitude and is likely to maintain this level in 2025, with a potential upward trend by 2026,” Reith said, adding that a shift in the property market is expected, driven by growing populations, rising incomes, lower interest rates and higher rates of construction completion.

Pressure Mounts on Rental Costs

The availability of rental properties in Austria has decreased significantly over the past two and a half years, particularly in Vienna. This shortage has contributed to rising rental prices, with rents increasing at a faster pace than inflation in certain regions.

While some areas have seen rents rise in line with inflation, growth regions have experienced more substantial rent hikes. In Vienna, for instance, asking rents have increased by 13.2% since the third quarter of 2022, compared to a 10% increase in inflation. Real increases in rental costs have also been recorded in Salzburg and Vorarlberg, while the impact in Burgenland and Styria has been less significant.