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What will happen to Austria’s property market in 2022?

The property market in Austria performed well in 2021 with rising prices and high demand. Will this continue in Austria in 2022?

Published: 3 December 2021 17:03 CET
Austrian chalets
Whether you're looking to buy a first or second home in Austria, here's what experts predict for the property market. Photo: Finease Anton/Unsplash

As we near the end of 2021, Austria is in another national lockdown and many businesses are closed, but the property market is still riding high.

This means 2022 could be another strong year for property in Austria, although prices might start to stabilise over the next 12 months.

Here’s what you need to know.

READ ALSO: Why are property prices in Austria’s Tyrol region so high?

What can we expect from Austria’s property market in 2022?

Experts are predicting the high demand in the property market to continue throughout 2022, especially in rural areas and in the luxury homes market.

Justin Field, Marketing Director at property consultants Amazing Austria, told The Local: “The movement of people [as a result of the pandemic) created a demand for more country properties so people could work from home.

“Due to the uncertainty over the virus for the coming year, we would expect the local market to stay buoyant with demand for larger family homes in villages.”

READ MORE: Why are property prices in Austria’s Tyrol region so high?

Maizie Delaney Baird, Property Consultant at ski chalet specialists Lindforth, said they are receiving high numbers of enquiries from buyers looking for an investment property, despite the current national lockdown.

Maizie told The Local: “We still have a backlog of clients who wanted to buy last year but had to put their searches on pause. Additionally, many new buyers, especially Germans, have been inspired by the pandemic to invest in their family lifestyles. 

“Many of our clients want to buy a lifestyle investment property in Austria – a place they can holiday and “work from chalet” on occasion, but also rent out to earn an income.”

However, Justin at Amazing Austria predicts prices could start to stabilise or even drop during the next year.

He said: “With the uncertainty of corona, and as personal debt ratios in Austria rise, my own thoughts are that the property market will level out in 2022, or even reduce as debt catches up with people and businesses.”

READ ALSO: Can foreigners buy property in Austria?

Property market trends and hot spots in Austria

Since the start of the pandemic in spring 2020, the Alps region in western Austria has been experiencing a real estate boom as both Austrians and foreigners have sought to buy property in the mountains.

Maizie told The Local it is a seller’s market right now with high demand and a shortage of supply.

She said: “With few chalets becoming available to buy there is a lot of competition so buyers need to be quick and determined if they wish to find their dream chalet, especially in the top resorts.

“In terms of prices, property in world-famous and glamorous Lech am Arlberg [Vorarlberg] are some of the highest in Austria and average around €20,000 per square meter. 

“Whereas, in sporty Zürs am Arlberg, sharing the same ski region and just five minutes away by car, prices average around €15,000 per square meter.”

FOR MEMBERS: Altbau vs Neubau: What’s the difference and which should I rent in Austria?

Elsewhere in Austria there is a similar story, although prices aren’t rising to the same extent as in the Alps.

For example, in Vienna prices have risen by around 12 percent in all districts to an average of €5,800 per square meter (sqm), and luxury properties have gone up by 23 percent to €14,500 per sqm.

In Penzing, prices have gone up by 19 percent in the past year after the average price per sqm exceeded €5,000. In Donaustadt, prices rose by 15 percent to €4,870 per sqm.

What happened to Austria’s property market in 2021?

In the first half of 2021, the House Price Index (HPI), which measures changes in residential property prices, increased from 142.85 in January to 150.77 in July – an all-time high. 

To compare, in June 2020 the HPI in Austria reached 135.11. This was the highest ever recorded level at the time.

Earlier this year, a study by Deloitte showed that new apartment prices in Austria were the most expensive in Europe with a 70 sqm apartment costing an average of 10.6 times the national annual salary.

Gabriele Etzl, real estate expert and partner at Jank Weiler Operenyi / Deloitte Legal, said: “The rising construction costs and the high attractiveness of real estate as an investment form are the main reasons for this price development.”

FOR MEMBERS: Seven common mistakes to avoid when buying a home in Austria

Rising prices have since prompted the Österreichische Nationalbank (OeNB) to warn of overheating in the housing market after it was revealed property prices across Austria have doubled since the beginning of 2010.

The average price increase across the Eurozone in the past decade is just one third.

In fact, some experts say residential property prices are currently overvalued by around 30 percent and there are concerns about the steep growth in mortgages in Austria, which is outpacing the average across Europe.

Stefan Selden, banking advisor at 720° Restructuring & Advisory, told Der Standard: “The development of real estate prices is undoubtedly wild.”

However, according to ImmoScout24, the cost of rent in Austria in 2021 only rose by 1.6 percent, compared to 4.6 percent in 2020. The average cost for a 70 sqm apartment in Austria is €944.

Tyrol remains the most expensive province for rent, followed by Vienna and Vorarlberg.

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PROPERTY

How to ensure your French property is insured for storm damage

Storm Ciaran’s property-wrecking passage through France - with another storm forecast for the weekend - may have many people wondering how comprehensive their insurance cover is. 

Published: 3 November 2023 15:45 CET
How to ensure your French property is insured for storm damage

In the wake of Storm Ciaran, thousands of property owners in France are preparing insurance claims – with initial estimates of the bill for damage between €370 million and €480 million.

Home insurance is compulsory in France, whether you own the property you live in or you rent – and it must include some level of storm damage cover. 

Check also to see if your insurance provides cover in case of a declaration of a catastrophe naturelle.

The garantie tempête (storm guarantee) covers damage caused by violent winds. What constitutes a ‘violent wind’ varies from contract to contract, but there appears to be a widespread consensus of agreement on wind speeds over 100km/h.

In most insurance contracts, this covers damage caused by the storm and within the following 48 hours – so you’re covered if, for example, a tree weakened by the storm comes down within that period and damages your property.

Be aware that, while the storm guarantee automatically covers the main property, it generally only covers any secondary buildings and light constructions – such as a veranda, shed, solar panels, swimming pool or fence – if they are specifically mentioned in the contract. 

The same is true of any cars damaged by debris. A basic insurance contract might not include storm damage, so it is always worth checking.

Damage must be reported to your insurer as quickly as possible. The deadline for making declarations is usually five days after any damage is noticed. This is especially important for second home owners, who may not be at the property when the damage occurs. 

In some cases – such as in the aftermath of Storm Ciaran – insurers may extend the reporting period. But under normal circumstances, it’s five days after the damage has been discovered.

What happens next

To make a claim, the first thing to do is contact your insurer by phone or email. Your insurer will take you through the next steps, but usually you have to send in a declaration – which should include an estimate of any losses and for any repairs, with evidence where possible, such as photographs and any receipts for purchases. 

Your insurer may also request proof of wind intensity, which can be provided for example by a nearby weather station.

The insurance company may appoint an expert to come and assess the damage, so make sure to keep damaged property safe until they arrive, as well as all invoices for any urgent repair work. 

What if you’re a tenant?

If you rent your property, you must report any damage inside the accommodation to your insurer and also notify your landlord so that they can file their own claim. 

In the case of a co-propriete, you must declare damage inside the accommodation to your insurer, while the trustee sends his own declaration to the collective insurance (which sometimes covers the private areas) .

How long does it take for claims to be settled?

Payment of the compensation provided for by the “storm guarantee” depends your home insurance contract. After the insurer has estimated the amount of damage, compensation is generally paid between 10 and 30 days following receipt of the insured’s agreement.

What if we got flooded?

In the case of flooding, you may have to wait for a natural disaster order to be issued. 

Catastrophe naturelle

The ‘state of natural disaster’ is a special procedure that was set up in 1982 so victims of exceptional natural events, such as storms, heavy rain, mudslides and flooding, as well as drought, can be adequately compensated for damage to property.

The government evaluates each area and deems whether it qualifies for the status of catastrophe naturelle (natural disaster). 

Essentially once a zone is declared a natural disaster, victims can claim from a pot of funds created by all insurers. If the zone is not declared a disaster, insurance companies are under no obligation to pay out. 

Under a “state of natural disaster” residents are covered for all those goods and property that are directly damaged by the phenomenon, in this case storms.

It applies to residential or commercial buildings, furniture, vehicles and work equipment that are already covered by insurance policies.

Homes must be already covered by a multi-risk insurance policy for the status of natural disaster to count.

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