Vienna Housing Market in Crisis: Rental Prices Rise, Supply Shrinks
This is according to the latest market report from the real estate consultant EHL. It states that the number of new construction projects remains low despite falling interest rates, leading to a further decline in completions.
According to EHL, the number of completed apartments in 2025 is expected to be significantly below the previous year's level. The decline is particularly drastic in rental apartments - here, a decrease of more than 50 percent compared to 2024 is expected this year. "The supply gap in Vienna will thus continue to widen," the analysis states. Political measures such as the suspension of indexing for old building rents could further exacerbate the situation.
While institutional investors continue to act cautiously, more and more projects originally planned as rental properties are being sold individually. As a result, the total number of available condominiums remains relatively stable.
Ownership Market in Vienna Stabilizes
The ownership segment shows a clear recovery. Both owner-occupiers and investment buyers are becoming more active again, fueled by the interest rate reversal of the European Central Bank (ECB) and falling financing costs. Prices are slightly rising, especially in good locations. At the same time, the room for negotiation is shrinking: according to EHL, price reductions are now only in the low single-digit percentage range.
The demand for rental apartments remains high - the supply is far from sufficient. Apartments are "increasingly being reallocated immediately after the previous tenants move out," according to EHL. Especially in sought-after locations in the mid-price segment, interested parties must make quick decisions.
Rents in Vienna Climb Significantly Above Inflation Rate
The prices in the rental market are developing accordingly dynamically. For the entire year 2025, EHL expects an average rent increase of 5.4 percent. In new leases, real increases of around 2.3 percent compared to the previous quarter were already recorded in the first quarter. Rents are also rising significantly in existing properties.
For condominiums, an average price increase of about 2.2 percent is expected in 2025. In particularly sought-after locations such as the inner districts, square meter prices according to EHL already average over 7,000 euros.
EHL expects that construction activity will remain below the actual housing demand at least until 2029. Moreover, despite some positive signals, no quick approval processes are to be expected. The uncertainty among project developers remains high - not least due to current and announced legal interventions such as rent caps or indexation restrictions.
(APA/Red)
This article has been automatically translated, read the original article here.