Prospects for the Austrian Real Estate Market in 2023 and the next 5 years – Best ways to invest

Vienna is one of the key cultural and entertainment centers in Europe. The historic center of Vienna was inscribed on the World Heritage List.

The capital offers many monuments and architectural masterpieces, museums and art galleries, churches and cathedrals, as well as cultural institutions, including the world-famous Vienna State Opera (Wiener Staatsoper), Konzerthaus (Wiener Konzerthaus) and other significant places.

Natural resources, ecology and a healthy lifestyle

Half of Vienna's area (about 200 sq. km) is occupied by green areas and parks; most of which are free of charge to visit. In addition, the Austrian capital offers 11 urban walking routes and a trail around the city, allowing visitors to enjoy the most picturesque landscapes. Vienna also offers a developed network of cycle paths with a total length of 1,654 km, which is constantly growing. In just a few hours from Vienna, you will be able to drive to the numerous ski resorts, which attract tourists from all over the world.

Since 2020, Vienna has been implementing the “VIENNA 2030 — Economy & Innovation” strategy of economic and innovative development, which is aimed at improving the city's infrastructure, strengthening the status of Vienna as a business location, and creating highly skilled jobs. The strategy identifies six areas which are based on the excellence of the city, including:

• Introduction of Smart solutions for urban lifestyle in the city of the 21st century
• High-tech healthcare facilities available to every citizen
• Digitalisation
• Implementation of high-tech solutions at industrial enterprises
• International cooperation
• Strengthening the image of Vienna as a cultural capital with creating conditions for the development of culture and creativity

It’s expected that the implementation of this concept will make Vienna a more attractive location for living and doing business, which will lead to an increase in the population from the influx of new residents and investors. All this will lead to the high demand for properties — both for buying and renting.

Investment potential of Vienna

At the end of 2021, about 18% of professional European investors invested in real estate. By 2026 this number is forecast to increase to 45%. During the global crisis connected with the Covid-19 pandemic, residential real estate confirmed its status as a reliable and sustainable asset again. Despite the instability of the economy, the demand for properties to rent and high rental prices have allowed investors to generate a stable passive income.

It's worth noting that at the end of 2021, 25% of the total investment in real estate in Europe was made in tenements, hostels for students and nursing homes. At the same time, 46% of investments in residential real estate in Europe were made by foreign citizens. It’s expected that over the next 5 years the volume of investment in European real estate markets, including Austria, will grow dramatically.

The population of Vienna grows annually due to its benefits which were listed above.

At the beginning of 2022, the population of the Austrian capital was almost 1,931,600 people, with 32.2% of foreign citizens. At the beginning of 2023, the Austrian government announced measures which would simplify the procedure for getting a residence permit for professionals from non-EU countries. It’s expected that this measure will lead to an influx of new expats to Vienna and other federal states, which means that the demand for purchasing and renting properties in the country will grow.

It's worth noting that the number of people living in their own property and in rented property is approximately the same in Austria. According to Eurostat, 45.8% of Austrian residents rent their home, which makes Austria the second highest country in the EU in terms of renters, after Germany, where the share of tenants is 50.9%. Against the backdrop of a stable growth in residential property costs in recent years, as well as tightening the requirements for applicants for mortgages since August 2022, means that becoming an owner of a residential unit has become a bit more difficult for a number of Austrians and expats. As a result, rental properties will be in high demand. This means that real estate investors in Vienna can count on a stable income from renting their property out to tenants.

Note: In case you plan on buying a property in Vienna to generate rental income, take into account several factors that affect the size of the potential profit, which include the area, the infrastructure located within walking distance, the type of property, etc. In order to choose a property with the highest prospects for profitability, we recommend you to get in touch with our specialists.

According to the data from globalpropertyguide.com, in September 2022, the average ROI for studios and apartments in Vienna was 2.89%. At the same time, the highest ROI rates for studios were recorded in Favoriten (10th district) and Landstraße (3rd district) reaching 4.14% and 3.94% respectively. The maximum yield for 1-bedroom apartments was seen in Liesing (23rd district) with 3.79%. The highest rate for 3-bedroom apartments was registered in Favoriten (10th district) reaching 3.85%.

According to immopreise.at, the highest rental prices for residential real estate can be seen in the Innere Stadt (1st district) with EUR 22.37 per sq m. This is followed by Leopoldstadt (2nd district) and Ottakring (16th district) with EUR 20.61 and EUR 18.78 per sq. m. The minimum rental price is fixed in Hernals (17th district), Favoriten (10th district) and Rudolfsheim-Fünfhaus (5th district) with EUR 14.40, EUR 14.75 and EUR 14.77 respectively.

Buying property in Vienna with Luxury Immobilien GmbH

Luxury Immobilien GmbH is a real estate agency headquartered in Vienna and is a division of the Metropolitan Group. Our professionals provide clients with a full range of services related to the Austrian real estate market, and assist in buying, selling, renting or leasing residential and commercial properties. We also offer legal support and are ready to help you in getting a mortgage and a residence permit, as well as in creating the perfect interiors for your future home and organizing your move to Austria.

Our experienced brokers will find properties both within the primary and secondary markets, including in exclusive historic buildings, corresponding to your needs and budget, whether you plan to live in Austria or wish to make a profitable investment for capital growth. Our experts will accompany you at all stages of the transaction.

Furthermore, we offer professional assistance in finding and acquiring commercial real estate which will allow you to generate a high rental income. This could be tenements, office and residential complexes, shopping centers and dining establishments. Send us a request, and our specialists will get in touch with you and answer all your questions. We communicate with our clients in five languages which include English, German, Spanish, Ukrainian and Russian.