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EU roaming charges ‘to go by July 2016’

After months of waiting, the EU finally announced the date when mobile phone roaming charges will be scrapped. There should be no extra charge on calls, texts or internet by July 2016.

Published: 9 September 2013 11:21 CEST

EU roaming charges 'to go by July 2016'

Photo: DPA

New rules brought in this July meant that customers of German phone providers cannot be asked to pay more than 24 cents a minute plus tax to make a call while visiting another EU country.

And by July 2016, all extra costs should be a thing of the past, German news magazine Focus uncovered after gaining access to the EU draft bill. The document states how providers will be encouraged to ditch charges before this date.

People using providers which seem slow to drop the fees could, when abroad, receive text messages from competing companies offering them short term, cheaper, contracts. This should encourage companies to get rid of roaming charges before July 2016.

EU commissioner for digital technology Neelie Kroes told Focus that “the end of roaming is near.”

From July 2013, incoming calls were capped at 8.3 cents a minute, down from a maximum 9.5 cents. The cost of sending a message cannot now exceed 9.5 cents.

Checking emails while visiting another EU country is now considerably cheaper with the price of downloading a megabyte of data plummeting from a maximum 83.3 cents per megabyte to 53.5 cents after tax.

Price caps are set to sink further next July. The annual price caps began in 2012 and were timed to coincide with the start of the European holiday season.

The new draft also suggest that companies get rid of contracts that tie in customers for longer than 24 months.

The Local/jcw/jlb

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Why buying property in Austria remains unaffordable for most

Many people living in Austria dream of one day owning a home, but despite recent drops in property prices and interest rates, this dream is still out of reach for many average earners.

In Austria, it is recommended to not spend more than 40 percent of a monthly income on debt repayment.

But new analysis by tariff comparison portal durchblicker.at reveals that even a double-income household would need to spend around 60 percent of their income to afford a 90m² new-build apartment in Vienna.

While the government has created initiatives to improve the affordability, with attractive housing packages, fee reductions and eliminations of certain fees, such as the “Grundbucheintragsgebühr” (land register entry fee) and “Pfandrechtseintragungsgebühr” (mortgage registration fee) for properties up to a certain value, their impact has been limited.

Furthermore, the governments initiatives often overlook the specific needs of lower-income households and may benefit those who are already financially stable, leaving the average earner still struggling to afford a home, according to Der Standard.

READ ALSO: ‘Haushaltsversicherung’ – How does Austria’s home insurance work?

High prices, rates and strict lending criteria

One of the biggest barriers to owning a home in Austria is simply the sky-high property prices. Over the years, property prices have increased, making it more difficult for people with an average income to afford a place of their own. Even with recent minor dips in prices, they still remain high.

Another factor making owning a home challenging is the increase in interest rates in recent years. As a result, both existing variable-rate loans and newly obtained fixed-rate loans have become more expensive. Analysts expect the European Central Bank to cut interest rates by around 0.5 percent in the near future, but according to durchblicker’s calculations, this would initially only create a little relief for loan takers, where instead of around 60 percent, 55 percent of monthly household net income would be needed for debt repayment.

Another issue preventing many from realising their dream to buy a home is the difficulty in obtaining a mortgage. Since July 2022, stricter rules have applied in Austria for the granting of property loans. Loan applicants must have a deposit worth at least 20 percent of the value of their property to be granted a loan, according to the financial online platform Finanz.at. This means that even applicants with higher incomes may struggle to get their dream financed.

Furthermore, many loan takers with variable-rate loans, especially those recently obtained, are facing significant challenges. The variable interest rates have increased significantly since the initiation of these loans, resulting in higher monthly repayments, reported Der Standard.

Few people can afford their own home in Austria, especially in Vienna. Photo by Christian Lendl on Unsplash

Experts suggests fixed rate loans and cooperative housing models

Andreas Ederer, Head of Banking at durchblicker.at, recommends loan takers with variable-rate loans to change to fixed-rate loans. He suggests that fixed-rate loans have become more attractive as they are currently cheaper than variable-rate loans, reported Kurier.

Unlike fixed-rate loans, which have a steady interest rate throughout the loan term, variable-rate loans can change over time in response to shifts in market conditions or the economy.

Experts also suggest alternative models for increasing affordability. One idea is to create more opportunities for cooperative ownership with mandatory purchase options. This could offer a more affordable option where costs such as maintenance and taxes are shared. According to Der Standard, cooperatives also often have access to loans with better terms.

READ NEXT: How can I move into affordable cooperative housing in Vienna?

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