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PROPERTY

Property in Austria: A roundup of the latest news and info

Stay up-to-date on the latest Austrian property news with The Local's weekly roundup.

Published: 27 August 2021 10:36 CEST
Property in Austria: A roundup of the latest news and info
Austria's property market has been booming for two years, but there are signs that demand is decreasing. (Photo by Jacek Dylag on Unsplash)

Thinking of buying a house, moving house, investing or just curious about the property market in Austria? 

Here’s our first edition of our weekly property wrap. 

No sign of a price drop in the Austrian property market

Since the start of the pandemic last year, property prices in Austria have continued to increase with no sign of it slowing down yet.

Raiffeisen Research expects prices in the real estate market to keep rising throughout 2021 and interest rates are not expected to increase until 2025.

As a result, demand remains high among investors and private buyers with a recent survey by real estate broker Interhyp AG revealing 73 percent of tenants want to own property.

This coincides with results from the Property Index 2021 by Deloitte that shows new apartments in Austria are the most expensive in Europe at €4,457 per square metre – an increase of 5.84 percent from last year.

This means a 70 square meter apartment costs an average of 10.6 times the national annual salary. 

Gabriele Etzl, real estate expert and partner at Jank Weiler Operenyi / Deloitte Legal, said: “Despite the year of the Corona crisis, housing prices in Austria continue to rise. 

“The rising construction costs and the high attractiveness of real estate as an investment form are the main reasons for this price development.

“At the moment everything indicates that this trend will intensify in the next few months.”

READ MORE: New apartment prices in Austria are highest in Europe

The Austrian National Bank recently warned of overheating in the property market but other experts, like Michael Haller, CEO at Hypo Vorarlberg Bank, are not worried about a possible risk for investors.

Instead, Haller told ORF he expects prices will soon stabilise at the current rate, “with slight fluctuations upwards or downwards” after that.

Additionally, Andreas Luschnig, Manager of Interhyp in Vienna, told the Salzburger Nachrichten that this is a good time to consider housing finance as interest rates remain low.

The cost of renting in Austria is going up

According to the Kronen Zeitung, “private sector rents have exploded” in Vienna with a square metre now costing on average €10.

This means landlords are receiving 50 percent more in rent than they were 10 years ago.

An increase in rent prices in Austria’s capital city is not restricted to the private sector either, with the municipal sector going up by 23 percent and cooperatives by 29 percent in the past 10 years.

FOR MEMBERS: ANALYSIS: Where are real estate prices on the rise in Austria?

However, Innsbruck has been named as the most expensive city in Austria for rent following a study by Immowelt. In Innsbruck, the average rent is €18,80 per square meter.

Towns in the east of Austria, such as Jennersdorf in Burgenland, are the cheapest places to rent where people pay less than €7 per square meter.

Salzburg is the second most expensive city for rent in Austria at €16,0 per square meter.

In July of this year, the average rent price in Austria rose by 1.2 percent due to inflation.

Is it still possible to find a bargain in the Austrian capital of Vienna? Photo by Geula Prochazka on Unsplash

The luxury homes market is booming

The luxury homes property market has performed well throughout the pandemic as wealthy buyers search for more space and a quieter lifestyle outside of the main cities.

This is being driven by a move towards remote work and wealthy Austrian citizens overseas looking for a new base in their home country, according to an article in Der Standard.

Real estate agents in Austria are also reporting an increase in enquiries from people in Germany searching for a luxury home in Salzburg or the surrounding area.

READ MORE: Can foreigners buy property in Austria?

Another article highlighted the luxury property market in the Kitzbühel district of Tyrol, which has increased by 20 percent since the start of the pandemic.

Mortgage Broker Manfred Hagsteiner told Der Standard that some houses are selling for up to €25 million and that the ceiling on prices “has still not been reached”.

Earlier this year, Peter Marschall, CEO at Marschall Real Estate, told The Local that German buyers have been flocking to Kitzbühel in Tyrol due its close proximity to Munich. 

“People want to own a second home in a nice area,” he said.

“The crisis has highlighted these areas to international buyers more than Vienna.”

Did you know?

The City of Vienna has a rent calculator for tenants to find out if they are paying too much rent and might be due a refund.

Rent in Vienna is famously affordable due to rent control rules on buildings built before 1945 which are smaller than 131m2. These high-ceilinged buildings are also known as Altbau.

However, experts predict that 80 percent of tenants could be paying too much rent to live in these properties.

The rent calculator can be found at the City of Vienna website.

FOR MEMBERS: How to find out if you are paying too much rent in Vienna

The property roundup is new addition and we’d welcome any feedback or suggestions for areas it should cover. Please email us at [email protected]

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LIVING IN AUSTRIA

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

'Haushaltsversicherung' is one of Austria's most popular types of insurance. It is not mandatory, but it is certainly worth evaluating, especially as it comes with many possible add-ons.

Published: 2 May 2024 15:22 CEST
'Haushaltsversicherung': How does Austria's home insurance work?

Austrians are certainly obsessed with insurance coverage, and one of the most popular and common ones is known as the “Haushaltsversicherung”—if you don’t have it already, you have certainly heard of it. Here’s what you need to know about household insurance.

Firstly, this insurance covers damages to “all movable objects within your own four walls,” as Austria’s Chamber of Labour (AK) explains. This includes furniture, carpets, and electrical appliances. It would also cover damages caused by fire, storms, water, burglary, and glass breakage. 

Certain types of insurance, such as private liability insurance or mandatory dog liability insurance, are almost always combined with household insurance—another reason why the Haushaltsversicherung is so popular in Austria.

READ ALSO: What kind of insurance do I need to have in Austria?

However, there are enormous differences in premiums and benefits, so experts suggest you check precisely what you need before taking out insurance. The AK also says you should talk to an insurance advisor to learn more about your specific case and needs, particularly if you have any valuables in your home. 

Additionally, they said: “It makes sense to check your policy every few years to ensure that you are properly insured. This guarantees that the sums insured and the risks included are up-to-date and sufficient”.

What should I keep an eye on when reviewing policies?

Of course, different companies have their own offers, and they are often highly customisable to fit your apartment and lifestyle—some things you need to be aware of, though.

Certain policies are tied to the size of your apartment, while others will have a lump sum regardless of the size of your place. Policies also usually differ depending on whether you live in an apartment or a house. 

While most insurance will cover glass breakage (such as when a hail storm breaks your window, for example), some might have it as an add-on (wahlweise mit Glasbruch). 

You may also add other types of insurance to your household insurance, the most common being mandatory dog liability insurance (Hunde-Haftpflicht), legal insurance (Straf-Rechtsschutz), and sports insurance.

READ ALSO: Should I take out insurance before skiing in Austria?

It’s worth it to read each policy, but you should know some common clauses beforehand. For example, insurance often won’t cover burglary costs if your house has not been properly secured and locked. This might seem obvious, but since door knobs don’t open from the outside without the key, people often leave their homes, especially for short errands, and don’t lock the doors all the way. Insurance and safety experts recommend you get in the habit of locking your home doors.

It’s also important to check if your insurance will pay you “Neuwert” or “Zeitwert” in case of damage. 

A Neuwert means the insurance will pay for a replacement object, regardless of how old the stolen or broken one was. However, many insurance policies still contain the so-called “Zeitwert”, something like “current value”, so you wouldn’t receive an amount that could pay for a new product. Instead, a loss of value of around 10 percent per year could be expected for most objects.

What should I do if there is damage to my home?

If you see any damage to your home from burglary, accident or other types, you need to notify your insurer immediately and report the damage you have suffered. 

The insurance conditions usually stipulate a maximum period of three days for reporting a claim in property insurance. The Chamber of Labour also recommends that you send a written notification of the claim (preferably by registered mail, they add).

“Make a list of all items that have been destroyed or lost and enclose it with your report to both the insurer and the security authorities”, they said. And, of course, in the event of fire burglary or robbery, always inform the fire department or police authorities.

READ ALSO: EXPLAINED: The Austrian insurance for if you get sued – or want to sue someone

How long does the insurance last, and how much does it cost?

The insurance term is usually specified in the counteract. In general, though, you can terminate it after the third year with one month’s notice if the contract has not already expired.

If you move house or move abroad, you can terminate your household insurance contract. You can cancel the insurance the day before the move begins (preferably by registered letter).

If you do not exercise your right of termination, the insurance will remain valid during the move and in the new home.

Regarding prices, they can be as low as a few euros a month (such as insurance specifically tailored to students living in shared flats) to several hundred a month if you have a large place with plenty of valuables or include several add-ons. 

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