Property prices keep climbing

A real estate expert has expressed concerns about property prices in Austria.

Thomas Malloth told the Kurier today (Thurs): “The question is whether the middle class will manage to afford it in the near future if things keep developing this way.”

Malloth said annual statistics reveal that all kinds of properties – cheap flats in cities, real estate in the countryside and business properties in industrial areas – became more expensive from 2010 to 2011. He encouraged political decision-makers to create incentives for the construction of new estates.

Owner-occupied flats were 6.5 per cent dearer last year than in 2010, according to Malloth. The head of the Federal Real Estate Association said that prices shot up by 10 per cent in capital Vienna. He added that the eastern province of Burgenland remained the most affordable region for building land last year.

Rising housing costs and soaring car fuel prices were mainly responsible for an inflation rate of 2.3 per cent in April. Petrol prices climbed by 3.8 per cent while housing expenses edged up by 3.4 per cent. Federal statistics agency Statistik Austria’s housing costs price check includes aspects such as rent, the price for the supply with tap water and heating expenses. Referring to March 2012 price checks, Statistik Austria said that Austrians using gas to heat their households had to cough up almost 12 per cent more for the same amount of the resource than in the same month of last year.

Real estate sector analysis group Remax recently found that the average price for houses in the alpine province of Tyrol overtook prices for the same kind of real estate in Vienna for the first time. Remax said people paid 315,500 Euros on average for a house in Tyrol in 2011, around 5,000 Euros more than the purchasers of houses in the capital. Salzburg takes third place in the house price examination with 219,700 Euros. Remax identified 165,300 Euros as the Austrian average.

Austrians spent 138,700 Euros on average on the acquisition of an apartment in the country last year, almost seven per cent more than in the previous year. Prices in Vienna climbed by even 9.2 per cent. These developments seem to have no impact on many people’s financial strategy. Research group Integral found in a poll that, with 19 per cent, nearly one in five Austrians planned to spend money on properties this year. Only 16 per cent of residents of the alpine country – which became a member of the European Union (EU) in 1995 – intend to invest in gold, according to the survey.

The Viennese districts of Innere Stadt and Döbling, the city of Salzburg and the Tyrolean town of Kitzbühel are the most expensive locations for houses as well as for rented and owner-occupied flats in Austria these days. Austrians forked out 8.8 billion Euros on the purchase of real estate and owner-occupied flats in 2009. This was an increase of more than 10 per cent compared to the year before when the global economic crisis emerged.