Rents in Austria Set to Rise in 2025 as New Flats Decline

Rents in Austria Set to Rise in 2025 as New Flats Decline

Image: APA/HELMUT FOHRINGER

 

A sharp decline in the number of newly built rental apartments in Austria is expected to push rents higher in 2025, according to property consultancy EHL.

The shortage of properties, already noticeable in 2024, is set to worsen this year, the company said in a press release on Monday.

In 2024, around 4,200 new rental apartments were completed across Austria, marking a 25% drop from the previous year. EHL forecasts that only 1,800 new rental apartments will be delivered in 2025, the steepest decline in the last decade.

The consultancy attributes this slowdown to a difficult economic climate in the construction industry, strict building regulations, and increasing bureaucracy.

The ongoing shortage of rental properties, coupled with strong demand, led to an average rent increase of 6.2 to 7.7% in 2024, depending on location, size and facilities. EHL predicts that rents will continue to rise at a pace well above inflation in the coming years.

Meanwhile, the property ownership market is benefiting from more favourable conditions. Lower interest rates from the European Central Bank are expected to make loans more affordable and boost demand for homeownership. However, supply remains limited, with around 4,600 new homes sold in 2024. EHL anticipates a similar level of sales in 2025.

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