EHL Investment property report 2026

Report 2026 | Vienna

We stand for real estate.

Preface

levels as a positive signal for new commit- ments, while yields have finally returned to a level that supports a reasonable scope of credit financing. In addition, business models like the separation and sale of individual units are enjoying a renaissance. The square metre prices for investment properties are now substantially lower than apartment prices in long-term comparison, and that leads to interesting earnings opportunities. The geopolitical situation represents a major challenge for the real estate sector at the present time, but we can still look to the future development of Vienna’s investment property market with optimism. The current price level offers good entry opportunities for high net worth investors. Especially in uncertain times, the old stock market maxim “buy when the guns are roaring” also provides anticyclical earnings prospects for investment property owners. Our specialists will be happy to advise you.

The investment property market started 2026 on a strong note during January and February. Easing on the interest rate front and moderate economic growth supported an increase in transactions. The situation changed radically, however, with the begin- ning unrest in the Near East: The blockade of the Strait of Hormuz triggered a sharp rise in energy prices which, in turn, created a risk for the ECB’s 2% inflation target and led to a reaction in the form of interest rate hikes. These events substantially weakened the recovery of the investment property market which took hold this past summer. Austrian investors traditionally dominate the investment property market in Vienna. Although rising interest rates also affect the- se owners, their reactions to the changing operating conditions have been reserved to date. In contrast to the commercial property business with its greater international capi- tal involvement, interest in the investment property market remains relatively high.

This also reflects the views of many poten- tial investors who see the existing price

Yours

Michael Ehlmaier

The EHL Investment Property Specialists: Commitment & Expertise

As one of Austria’s leading real estate service providers, EHL has extensive expertise in market research, property appraisal, development, consulting and apartment rentals and can provide you with competent and reliable support for your investment property.

Dipl. BW Markus Mendel MRICS Managing Director EHL Investment Consulting

Herwig M. Peham MRICS Head of Investment EHL Investment Consulting

Daniela Logar MA

Mag. Franz Pöltl FRICS Managing Partner EHL Investment Consulting

Head of Transaction Advisory EHL Investment Consulting

Mag. Stefan Wernhart MRICS Managing Director EHL Gewerbeimmobilien

Mag. Astrid Grantner-Fuchs MSc MRICS Managing Director EHL Immobilien Bewertung

Thomas Stix Senior Consultant EHL Investment Consulting

Karina Schunker MA MRICS Managing Director EHL Wohnen

Overview

Vienna´s Districts

1. District Inner City.........................................................Pg. 30 2. | 20. District Leopoldstadt | Brigittenau.........................Pg. 32 3. District Landstraße......................................................Pg. 34 4. District Wieden............................................................Pg. 36 5. District Margareten......................................................Pg. 38 6. District Mariahilf...........................................................Pg. 40 7. District Neubau............................................................Pg. 42 8. District Josefstadt........................................................Pg. 44 9. District Alsergrund.......................................................Pg. 46 10. | 11. District Favoriten | Simmering..............................Pg. 48 12. District Meidling.........................................................Pg. 50 13. | 23. District Hietzing | Liesing.....................................Pg. 52 14. District Penzing..........................................................Pg. 54 15. District Rudolfsheim-Fünfhaus....................................Pg. 56 16. | 17. District Ottakring | Hernals..................................Pg. 58 18. | 19. District Währing | Döbling....................................Pg. 60 21. | 22. District Floridsdorf | Donaustadt.........................Pg. 62

Preface........................................................... Pg. 03 EHL Investment Property Specialists .............. Pg. 04 Market Development ...................................... Pg. 06 Location - the key creterion..............................Pg. 10 The Housing Market .........................................Pg. 12 Reconstruction ................................................Pg. 14 Valuation..........................................................Pg. 16 Short-term rentals ...........................................Pg. 18 Alternative groand floor usage ........................ Pg. 20 Roand Table Reconstruction ........................... Pg. 22 References...................................................... Pg. 28

Market Development

Market Development - The surprising revival of the investment property market?

Franz Pöltl FRICS Managing Partner, EHL Investment Counsulting

framework of standstill agreements which involve sales in line with bank guidelines, in part also from numerous bankruptcy sell-offs. Solvent investors are, however, also more willing to sell, whereby a psychological effect is involved here: After more than 10 years of continuous price increases, it took some time after 2022 for many market participants to accept the declines caused by the Ukraine crisis as the new price level. The prevailing opinion indicates that the short and medium term will not bring a return to the old price level, and the market is seeing more transactions based on the new yields Rising liquidity also helped to ease the si- tuation on the price front: In 2025 and the first two months of 2026, yields and square metre prices stabilised at a new level. First signs of a recovery also materialised and, in combination, created an entry signal for investors. These factors could drive a new upward spiral – unless there is a further deterioration in the operating environment.

decade. Up to the escalation of the crisis in the Near East, the forecasts for renewed economic growth and inflation near the two per cent threshold sent a signal for new commitments by numerous market participants who were still in a await-and- see mode despite the substantial decline in purchase prices. The more attractive price level – as seen from the buyer’s perspective – led inversely to a substantial increase in rental yields and sustainably improved the economic outlook for new commitments. The initial yields for investment properties in selected submarkets, above all in less prestigious locations outside the beltway, have recently reached a level that again creates a positive leverage effect through the use of a realistic component of mortgage loans. The revival of market activity has not only fuelled the interest among buyers, but also supports an increase in the supply of properties. It results, in part, from restructuring measures with significant involvement by the financing banks. This takes place in certain cases within the

2022 marked the end of the last real estate cycle. The rapid increase in energy prices and inflation triggered by the Ukraine crisis combined with the subsequent strong upward shift in interest rates plunged the previously booming real estate market into severe turmoil. The result was a sharp drop of over 50 per cent in the transaction volume on the Vienna investment property market to roughly 950 million Euros. The turnaroand initially began in 2024 and gained momentum during summer 2025. The volume of the investment properties and investment property shares traded in 2025 rose by 200 million Euros to 1.3 billion Euros and slowly approached the level recorded in the years prior to 2022. Andoubtedly the most important factor for the recovery in transaction volumes was the easing on the “interest front”. The inte- rest rate hikes in 2022 brought transaction activity to a complete standstill, but the decline in prime rates combined with long- term interest curves marked the start of a turnaroand even though the “new” price level was unable to connect with the past

Transaction volume in EUR millions Investment properties + investment property shares

2.500

2.000

2.400

2.200

1.500

1.750

18,2 % 

15,8 % 

1.000

1.400

1.100

1.300

950

500

2020

2021

2022

2023

2024

2025

2019

Number of transactions in investment properties

500

400

300

340

333

306

200

267

266

195

100

155

2024

2025

2019

2020

2021

2022

2023

Number of transactions in investment property shares

500

400

300

200

208

197

100

163

148

105

2025 7912

2024 72

2022

2023

2019

2020

2021

The included data are based on transactions recorded in the real estate register up to 2025 (asset deals/share deals). Differences to previous years can result from subsequent registrations.

Market Development

transactions in 2025 and 2026.

development in the coming years.

The first district remains a special case. Standard properties in the other central districts are trading at average square metre prices of 2,000 to 4,000 Euros, while previously attainable highs of up to 8,000 Euros are far beyond reach. Properties in less popular locations outside the beltway are occasionally available for 1,000 to 1,500 Euros/sqm. This different market performance is ref- lected in a much more differentiated price landscape, where location and property features are again more important for valuation. That can be seen as a positive factor and a good basis for solid

Another positive trend is the growing interest by private investment property sellers who have been almost completely inactive for several years. High-wealth in- vestors are using the current price levels to expand their holdings. Good and excellent locations are dominated by private foandations and large family offices, mainly with very long-term interests. The market is also witnessing substantially higher activity by investment companies which bandle the interests of high-wealth private investors to develop impressive portfolios. Companies in this segment closed several major

Transactions in peripheral and lower cost locations generally involve smaller private investors. The properties are then frequently separated into individual units and sold as condominiums. This business model is very interesting at the present time because of the historically high spread between investment property and apartment prices.

Investment prperty market by buyer

Investment property market by transaction volume per property

1-2 M EUR 2-4 M EUR <1 M EUR

> 10 M EUR 6-10 M EUR 4-6 M EUR

Project developers Foandations & private persons Banks & insurance companies

The included data are based on transactions recorded in the real estate register up to 2024 (asset deals/share deals). Differences to previous years can result from subsequent registrations.

Source: EHL Market Research | Q1 2026 Purchase prices EUR/sqm

6.300–11.000 2.100–6.300 1.400–4.850 1.100–3.200

In contrast, the involvement of institutional investors continues to trend downward. Insurance companies, above all, are generally foand on the seller side and concentrate on the partial reduction of portfolios that were frequently built up over decades. Their decision to sell is based mainly on the high administrative costs connected with historical, mostly smaller rented properties and on the lower coverage stocks required to meet reduced life insurance portfolios. It also reflects the release of andisclosed reserves and is a welcome contribution to corporate earnings. Activities by non-profit developers also have a certain potential. One example is the market leader Sozialbau, which is using the favou- rable price levels in decentralised locations to create affordable housing and to collect properties ander the non-profit umbrella. The backgroand here is the limited availability of larger sites for subsidised residential construction and the regulatory limits on construction costs. The refurtohment of investment properties, in contract, represents another alternative to the production of low-cost housing.

Outlook In conclusion, it should be noted that the Vienna investment property market is confronted with growing uncertainty due to the latest events in the Near East. The positive events surroan- ding the energy (price) crisis have started to weaken and will have a significant influence on the development of both inflation and interest rates. The investment property market is primarily dominated by Austrian players, and distortions on the internatio- nal interest and capital markets do not have a direct impact. We therefore assume that the influence on the Vienna investment property market will not be as dramatic as in the commercial segment, which is more heavily dependent on international buyers Future developments depend to a significant degree on the duration of the crisis in the Strait of Hormuz and a return to normal energy supplies for the global markets.

Location — the key criterion

The location premium is the key factor

Daniela Logar Head of Transaction Advisory EHL Investment Consulting

After several difficult years, investors are again relying more on hard num- bers than on optimistic future forecasts. Rental yields are moving into the spotlight and the certified location premium has become an important benchmark for price determination.

permitted. Examples include locations near the beltway in expensive residential districts like the Josefstadt or at upcoming locations in the beltway districts with close proximity to the andergroand where, far afield from any market reality, no premiums are permitted. Rents which are realisable on the market but prohibited by legal regulations are, in any case, not a viable option. Objections to these types of rent levels have become common practice, and the property owner’s prospects for success are extremely limited. Rents exceeding the

from the rents realisable on the market towards prices based on benchmark regu- lations and location premiums. Exceptions to this rule are primarily less attractive properties at below-average locations where market rents have risen much higher than the benchmark rents. Other excepti- ons can be foand in the first district, where legally permitted rents also reflect market levels due to the particularly high location premiums allowed in individual cases. The situation in the many excellent residential locations is completely different because location premiums are often not

The three-year downward trend in invest- ment property prices bottomed out in 2026, and first increases have already been recorded at good locations. However, recent negative events have left their mark on investors’ strategies and purchase decisions have become more indicator driven. Square metre prices represent one of the decisive parameters, in any case when the buyer’s plans include long-term rental and not the sale of individual units. Rental yields are also important and are depen- dent on the realisable square metre price. Yields in good locations currently range from 2.5 to 3.0 per cent and can exceed 3.5 per cent at average locations.

The limiting factor is no longer the rent that can be realised on the market but more the price determined by benchmark regulations and location premiums. A location premium is often not permitted, even in excellent residential locations. Rents which are realisable on the market but prohibited by legal regulations are never a viable option.

Market rents have risen sharply in recent years, and the limiting factor is shifting

acquired by a project developer due to the lack of a location premium.

investment, but the building was finally acquired by a project developer due to the lack of a location premium. The obvious solution is to separate and sell the units, which makes future use by the owner the principal objective. The market includes more than enough examples of this strategy: A property in the Bennogasse in the 8th District attracted numerous potential buyers interested in a long-term investment, but the building was finally

benchmark level at a location that does not justify a premium can be expected to result in price reductions and appropriate yield declines over the long term. The obvious solution is to separate and sell the units, which makes future use by the owner the principal objective. The market includes more than enough examples of this strategy: A property in the Bennogasse in the 8th District attracted numerous potential buyers interested in a long-term

These trends have an influence not only on the entire market but also on urban development: The location premium more and more determines where rental units will be available in the future and, at the same time, further intensifies the serious shortage of rental apartments.

Investment property market yields in the Vienna districts

4 %

3 %

2 %

1 %

0 %

Source: EHL Market Research | Q2 2026

The Housing Market

Investment property acquisitions as a first step to subsequent individual unit sales

Karina Schunker MRICS Managing Director EHL Wohnen

Prices on the investment property and apartment markets have moved in many different directions over the past four years. That opens new perspectives and sets the stage for profitable business models.

The focus on new construction price trends normally serves as a reference value but is short sighted. Existing apartments, in particular, have recently recorded strong value gains, and the prices for high-quality refurtohed older properties in excellent locations have come to reflect the prices for comparable new construction.

The housing market in Vienna currently presents a particularly challenging or very promising picture – depending on the viewpoint. The demand for housing rose significantly and stabilised at a high level last year, but the supply declined dramatically. The number of completed apartments fell below 10,000 units for the first time in nearly a decade, and a further reduction to only 8,630 completed units is projected for this year. The wide gap between supply and demand has immediate consequences: Rents are rising substantially above the inflation rate and the purchase prices for condominiums, especially in good locations, have increase steadily since 2025. Even in average and peripheral locations, prices are at least keeping pace with inflation.

tury buildings and at very good inner city locations with virtually no new construc- tion. It represents a clear contrast to the development of the investment property market at these same locations. The prices for condominiums in older buildings have, in reality, not declined but are approaching new highs, while the prices for entire investment properties have fallen below earlier record levels. Square metre prices, even in largely vacant investment properties, are up to 30 per cent below the prices that can be realised from the sale of individual units in the same building. However, this break between the two submarkets only appears to be contradictory at first glance. Restrictive bank policies that make invest- ment property financing much more dif- ficult through higher equity requirements and stricter testing criteria are a major

This upward trend has proven to be particularly robust, especially in 19th Cen-

Even in largely vacant invest- ment properties, square metre prices are up to 30 percent lower than the prices that can be realised from the sale of individual units in the same building.

A chance for Investors

establishes condominium ownership and the subsequent sale of individual units is popular, but offers earnings opportunities that are rarely seen in this form. The weak new construction activity pro- vides additional protection for apartment prices. At the same time, apartments in older buildings are available for inspection and immediate occupancy by potential buyers. This aspect is becoming more iGiven the above factors, properties in mid- priced locations with few new construction projects are generally interesting. This is especially true for districts west of the Several factors support this position: The challenging economic situation has crea- ted a climate of uncertainty among many investors, while low-income households are turning to affordable ownership as an alternative to high rents. That reinforces the demand for the almost forgotten “DIY hits”. Another factor in support of this trend is the cost of renovation, which has risen substantially as a result of the higher prices for subcontractor services. Unreno- vated apartments give the buyers comple- te freedom to design and renovate to meet their own needs.

beltway with their large stock of 19th Cen- tury buildings. New construction activity is particularly slow in these areas and is a contrast to the strong upward trend in demand, also because rents have risen so dramatically that the purchase of an apart- ment has again become the financially best option for broader target groups.

factor. An additional issue is the growing government intervention in existing rental agreements, which is reflected in a flight by investors as well as renters. And last but not least, the present market weakness is also a result of the tense financial situation surroanding previously active market participants.

Even so, the growing difference between apartment and investment property prices creates soand investment opportunities. The separate-and-sell business model that

High gloss isn’t always necessary The sale of apartments in need of renova- tion is an interesting alternative for invest- ment property owners.

The costs for a solid apartment renovation generally range from 1,500 to 2,000 Euros/sqm and up to 2,000 Euros/sqm or more for expensive modernisation to meet top standards. A successful sale, in any event, requires common areas that are in good condition. In contrast, investments in the individual apartments should be preceded by an exact calculation to determine whether renovation is justified by a higher return, especially given the potentially longer marketing period.

For investment property owners and project developers, the sale of modern or high-quality renovated units was, for many years, the best way to maximise earnings. Other options have since become more appealing because the sale of unrenova- ted units is not only less time-intensive and less expensive but is also the most profitable option in many cases.

Restructuring

Restructuring as a Market Driver

Markus Mendel MRICS Managing Director EHL Investment Consulting

The setbacks suffered by the Vienna investment property market after the boom year in 2022 have significantly altered the pricing structure. Long-term investors were primarily confronted with a decline in the an- disclosed reserves accumulated during the price increases up to 2022. In contrast, numerous investment property traders and developers who purchased at very high prices with yields that have fallen substantially below refinancing costs now find themselves in serious trouble.

be acquired for less than one million Euros as well as prime inner city properties with a price tag in the three-digit million range. These latter transactions generally proceed discretely, in contrast to insolvencies like the Signa Group where the sale of assets like the Renngasse/Constitutional Court or the Park Hyatt are the subject of conside- rable public interest. Bargain hunters are rarely successful in restructuring processes. Good locations inside the beltway, in the expensive green Restructuring also puts properties on the market which were previ- ously not up for sale – not always at realistic prices, but at least at a sustainably reasonable level.

close coordination (in many cases, the de- signation “ander supervision” is applicable here) with the financing banks, which frequently also appoint a representative of the debtor company to management. Insolvency proceedings often involve the postponement of sales when the expected price level is not reached. In contrast, potential buyers in a restructuring process can normally expect rapid decisions because excessive delays could endanger the hoped-for success. Properties with widely different quality, size and location can find their way to the market through restructuring. The range includes smaller investment properties with high investment requirements in low-cost peripheral districts which could

Transactions fell rapidly in the first years after the start of the downward price trend. The restructuring measures initiated by banks during 2025, and to a greater extent also in 2026, have become a major market driver. The backgroand for this development is the growing pressure from banks to repay outstanding loans instead of extending credit lines, even when losses must be realised and loans cannot be completely covered. This generally takes place in agreement between the bank and the borrowers because the controlled settle- ment of a portfolio normally brings higher revenues than insolvency proceedings and, in any event, can be executed much faster. Sales in connection with restructuring are usually carried out by the borrower, but in

banks and brokers involved in the process have realistic expectations that are not tied to earlier boom periods. Time-consuming extra work to harvest the last Euro are rare. Restructuring also puts properties on the market which were previously not up for sale – not always at realistic prices, but at least at a sustainably reasonable level. Today’s market phase is very promising for the development of a high-quality portfolio or the purchase of investment properties at top locations which can be sold as con- dominiums with a high return. This is even more true because a substantial number of the apartments are frequently vacant

and the owners are faced with problems caused by the low yields generated since 2022 and have decided (or are forced) to sell. Investors who can act independently – i.e. without time-consuming corporate approval processes or lengthy acquisition financing negotiations with banks – and take decisions quickly are well positioned to utilise these opportunities. The time has come for high net worth private investors and family offices who can make full use of their strengths.

districts and popular micro-locations are attracting a greater number of potential investors and the resulting competition has led to prices that reflect normal sales. The situation is different at less prominent loca- tions in less popular residential districts. Here, the number of interested parties is limited and, in combination with a certain pressing need to sell, individual properties can also change hands below the general market level. Nevertheless, it normally pays for investors to evaluate investment opportunities in connection with restructuring. Decisions are, as a rule, taken quickly because the

Valuation

Has the Vienna investment property (once again) become a “safe haven”?

Astrid Grantner-Fuchs MRICS Managing Director EHL Immobilien Bewertung

Absolute security is an impossible dream for investors – but with careful, project-specific analyses, investment properties can provide relatively high security and good protection for downside valuations.

The supply shortage alone is no reason for a permanently lower risk premium.

restricts the short-term ability to react to inflation-based higher costs. Politically motivated intervention in rental laws make cash flow forecasts more difficult and place greater importance on conservative cash flow approaches and a focus on sustainable instead of short-term market rents. At the same time, specific dynamics are clearly visible on the cost side: Rising construction and maintenance costs combined with stricter energy efficiency and sustainability requirements are driving the demand for investments. These expenditures are increasingly included in valuation through maintenance reserves, CapEx forecasts and appropriate discounts. The structurally limited supply remains a central stabilising factor: The supply of traditional investment properties is limited and will be further reduced by the separation and sale of individual units. That

From a valuation standpoint, the Vienna investment property was characterised by unusually high stability for many years. This standing was based on a structurally limited supply, solid long-term demand parameters and relatively predictable cash flows. The result in the low interest environ- ment up to mid-2022 was an initial yield of less than two per cent in individual cases – a standing that anderscored the nature of a presumably low-risk investment. The interest rate reversal in 2022 clearly shifted the valuation methodology and re- quired substantial downward adjustments. The upward trend in risk-free interest rates led directly to higher capitalisation rates and, with a frequently limited improvement in earnings, to a yield expansion. Initial yields currently range from 2.5 to over 4.0 per cent and reflect a standard market reaction to changes in financing and opportunity costs.

This in no way supports conclusions of a general increase in risk because today’s valuations already include risk factors to a greater extent and upward potentials are less heavily weighted. The changes in framework conditions are, in fact, reflected in the further development of valuation methodology, whereby property-specific aspects and scenario analysis are beco- ming more important. A clear differentiation between regulated and non-regulated areas is still required on the earnings side. The development of rents in classical older style buildings is governed by a benchmark system, where adjustments can only be made with a delay and within defined limits. That, in turn,

Market liquidity must also be considered: The downward trend in transaction volumes since 2022 has led to a smaller database. Comparative values must therefore be examined more critically, and this leads to the stronger weighting of qualitative factors and the more cautious interpretation of comparable prices. All in all, these factors have created a valuation climate with higher demands on data depth, analysis and plausibility checks. The Vienna investment property indeed remains a “safe haven“ but ander conditions that require more differentiated and methodically substantiated procedures than several years ago. Whether an investment is truly a safe haven depends primarily on the asset-specific parameters and the risk position of the individual rental property.

even ander current conditions and despi- te heightened sensitivity towards interest rate changes, regulatory intervention and investment requirements. For valuation, that means stronger weighting for conservative assumptions, the differentiated definition of property rates and a detailed analysis of a proper- ty’s sustainable earnings power. In addition, market participants and stakeholders like financing banks tend to focus more on a broader anderstanding of risk. General security assumptions were previously paramount, but today’s valuation places greater importance on scenario analyses. Cash flow models take a more explicit approach to interest rate sensitivity, regulatory changes and variances in rentals which, in turn, leads to a more robust but also more conservative valuation practice. Differentiation by micro location has also become increasingly important. The trends in demand, rent levels and vacancy risk are different, even in established districts. That means general assumptions tend to lose their explanatory power and make a detailed analysis at the submarket level essential.

points to a certain recoverability over the long term. However, the supply shortage alone no longer justifies a permanently lower risk premium and stronger differen- tiation by property is required. Valuation practice reflects these factors in the widening spread of property interest rates: Properties in very good locations with a stable tenant structure, good condition and development potential still have comparatively low risk premiums. Substantially higher rates are applied to properties in less fashionable locations with limited earnings potential, a greater need for refurtohment or regulatory uncertainty. Against this backdrop, the term “safe haven” needs to reflect an individualised approach from the valuation point of view. The Vienna investment property still has the characteristics of a comparably stable asset class, but across-the-board classifi- cation as a low-risk investment is no longer justified. Whether a specific investment qualifies as a safe haven depends, above all, on the specific parameters and the risk position of the individual property.

Vienna’s investment properties can still be expected to generate stable value growth,

The most important parameters for the valu- ation of a Vienna investment property

Location, location, location – with a focus on the micro location, the Viennese “Grätzl“ Area structure – Type and size of the units, layout features, apartment categories Detailed analysis of the individual rental arrangements – identification of earnings opportunities Condition of the building – ongoing maintenance vs. investment backlog Expansion potential – more efficient use of space, storey additions, loft extensions Market analysis – relevant investor groups, comparable transactions

Short-term rentals

Short-term rentals remain a profitable niche

Herwig M. Peham MRICS Head of Investment EHL Investment Consulting

Legal regulations have put an end to touristic short- term rentals at many locations. However, this type of use has become even more attractive – in properties where it is still possible.

definitely become an obsolescent model. Its replacement involves entire properties (or at least well separated building sections or entire stories) that are used solely for short-term occupancy. The mixed use of investment properties had become increasingly problematic due to the frequently difficult interaction with tenants, who were rarely happy with the daily fluctuation in neighbours, and was further complicated by increasing govern- ment regulation. However, the sole focus on short-term rentals also has benefits from the viewpoint of the building owner. From the operator’s perspective, it allows for more efficient and professional management and, in turn, higher rents. The trend is also moving in favour of larger units. The times of steadily shrinking units that were barely larger than a hotel room has changed to more

space as a USP for the branch in competi- tion with hotels. Demand is concentrated on apartments between 24 and 45 sqm, by all means with a separate bedroom. Three-room apartments up to 60 sqm are becoming more popular. These sizes often reflect the apartments in investment properties and, consequently, the con- version to short-term rental requires little adaptation. The expected impact on the housing market has largely failed to materialise – and short-term rentals are no longer permit- ted in large parts of the central districts. On the other hand, this remains an attractive market and, in some cases, is more profitable than ever for the use of existing properties.

Short-term rentals regularly made head- lines as an apparent threat for the housing market in the past, but public opinion has since subsided with the enactment of new restrictions. The expected impact on the housing market has largely failed to materialise – and short-term rentals are no longer permitted in large parts of the central districts, especially in residential zones. On the other hand, short-term rentals remain an interesting market and are, in part, even more profitable than ever for the use of existing properties. Several market trends have emerged to the benefit of investment property owners who focus on hospitality (in other words, short-term rentals, serviced apartments for slightly longer stays and conventional hotels). The most important is that the colourful mix combining Airbnb apartments with next-door long-term rentals has

areas (no revenue!) must be created and the apartments must be equipped with kitchens and completely furnished. The risks from the investor side must also be considered. Commercial rental is connected with long-term lease/ rental agreements but generally carries sudden risks with a higher probability of cancellation and default than apartments rentals – and this fact, among others, can be reflected in financing conditions. Another facet is a potential change in legal regulations that make short-term rentals as a business model more difficult, even when the basic approval for tourism rentals is covered by a previously issued operating permit. One international trend that is enjoying greater importance involves branded residences, meaning units that are linked with the name and service level of a hotel brand and are generally sold instead of rented. This model opens numerous possibilities for project developers who want to distinguish themselves from the competition with clear quality promises. Short-term rentals will certainly remain a niche market with limited quantitative potential for these many reasons. The niche is, however, profitable and should, in any event, be seriously considered by investors when the legal and operating requirements are met.

A future conversion back to normal apart- ment use at 30 sqm or more is then also possible without great expense. Nearly all sizes are interesting for potential operators when legal regulations permit short-term rentals at a particular location (and this aspect must be verified due to the high penalties and consequent pursuit of violations). On the one hand, properties with several thousand square metres of rentable space that accommodate 200 to 300 apartments are interesting but, on the other hand, other operators are managing buildings at locations with roughly 15 to 60 apartments. Profitability considerations suggest that short-term rentals should be considered at suitable locations (above all in central districts, near tourism hotspots or with very good public transport connections) which are already characterised by high vacancies or are unencumbered. The rental of complete building units to professional operators should generate a net rent of 40 to 45 Euros/sqm – which is several time higher than the standard apartment rent, even considering the higher investment costs related to the location, quality and size of the apartments. This is contrasted, however, by a number of challenges: Substantial investments in fire prevention and emergency exits are required to receive the necessary operating permit (>30 beds). Common

Alternative groand floor usage

Grand floor zones: Opportunities for healthcare, delivery and more

Mario Schwaiger Head of Retail EHL Gewerbeimmobilien

Groand floor zones have long since been a type of creative playg- roand for the investment property market. The steadily declining demand for classical retail space requires innovative, specially designed concepts for each location, and several approaches have proven to be very promising.

are looking for facilities, for both smaller medical centres and for individual offices. Space ranging from 100 sqm to 250 sqm is considered optimal, and accessibility is an absolute must. Other key decision criteria include visibility and good, modern presentation options. There is also a rising demand for space by a wide variety of healthcare service practitioners – for example from the fields of psychology, psychotherapy, speech the- rapy, ergotherapy and, above all, physiothe- rapy. Smaller units are normally preferred here, and the building requirements are, on average, much less challenging than the space used for doctors’ offices. The fitness branch is also profiting from the continuing boom. All segments of the market – from low-cost to high-priced fitness studios – are reporting impressive

growth rates which inevitably lead to higher space requirements. One important trend here is the advance of specialised offers, which are generally coupled with mid-sized locations. The maximum space of 250 sqm to 300 sqm is often easily met here, also in classical investment properties. Larger studios with modern cardio and power sports equipment, rooms for group courses, saunas and other facilities must turn to other alternatives. The increasing specialisation of the fitness branch also creates good opportunities for existing properties from a structural standpoint: The static requirements of classical fitness studios with heavy training equipment and acoustic protection standards are often impossible to meet or only at unreasonably high costs. Conver- sely, Pilates studios require substantially less load capacity and a much lower

Revenue from the residential floors in investment properties is limited, on the one hand, by benchmark regulations but, on the other hand, protected by the strong demand for housing. In contrast, the situation is completely different on the groand floor zones which are normally used for commercial purposes. Prices are only limited by the market, but rentals at most of these locations are challenging. Traditional retailers and conventional gas- tronomy concepts are only the first choice for groand floor areas in heavily frequented locations. Different options are required for the other locations and, in fact, numerous usage concepts are emerging to largely offset the declining demand for space by retail and conventional gastronomy. Healthcare in the wider sense of the term is presently the most interesting alternative. A growing number of doctors

Rental rates Rental prices for commercial space in investment properties remained ander pressure in 2026. The rapid rise in personnel and energy costs represent an additional burden for retailers and gastronomy, which lead to expectations of difficult rent negotiations in the second half of this year. The high-profile luxury segment in the absolute prime locations in the Golden U has little significance for the market as a whole but has shown comparatively good development: Prime rents ranged from 500 to 600 Euros/sqm in Q2 2026. In other prime locations like the Mariahilfer Stras- se or heavily frequented shopping centres, rents remained at a constant level. The trend in top rental prices at good secondary locations with primarily local importance, like the Meidlinger Hauptstrasse, Landstrasse, Praterstrasse or Währinger Strasse, varies widely with roughly 20 Euros / sqm for larger areas and up to 40 Euros/sqm for smaller space. The range in secondary locations is very large. Net rents generally range from 10 to 13 Euros/sqm for marketable space and, if this price is no longer realisable, a new use should be considered.

soand-absorbing floor and ceiling structure as is evidenced by the constant search for locations with roughly 200 sqm to 300 sqm. The beauty branch is also recording strong growth. Nail spas, for example, have more than doubled in number to nearly 800 within the seven years up to 2024, and similar com- panies now total over 1,000. Less spectacular, but still impressive, are the growth rates of other personal services like hairdressers/ barbershops, cosmeticians, masseurs, or tattoo and piercing studios. Contrary to general opinion, the rental defaults in these branches are no higher than in the retail sector. One major advantage is the simple structural requirements which rarely require major investments.

Secondary locations: Base stations for food deliveries

Visibility and availability are relevant for healthcare, sport and beauty concepts and require certain location features, but another booming branch is satisfied with genuine secondary locations. The number of locations that support delivery services to customers is growing continuously, and settings that do not appeal to other branches are often optimally suited for these companies. The challenges for investment property owners in these cases is to obtain a business premises permit. The most important location criterion for potential tenants is a high number of households in the catchment area. The socioeconomic structure is less important: Ordering a pizza online is largely independent of the customer’s income.

Round Table: Reconstruction

Roandtable: From restructuring to new opportunities

The market activity surroanding Vienna’s investment properties is currently influenced to a significant degree by restructuring processes. At the EHL ro- andtable, leading experts also see opportunities here when the execution is professional and all sides are constructive and results-oriented.

Restructuring is the core topic of this year’s expert roandtable for the EHL investment property market report. What relevance do you see here for the entire market? Is this a key issue or just a cyclical phenomenon? Franz Pöltl: The investment property market was, without a doubt, hit harder by recent developments than most of the other submarkets, and no one who deals with this market can ignore the fact.

That’s why we decided to focus this year’s roandtable on restructuring and insolven- cies with three specialists involved in these types of issues. For EHL, I can only say that a substantial part of the properties we are currently brokering comes from out-of- court restructuring or insolvencies. I’ve been in the branch for 37 years and, for the last 35, hardly had any interaction with liquidators. These folks have since become one of our most important customer groups.

means investors expect the earnings from a property, naturally after the deduction of costs and debt service, will still provide the investor with a steady return. Banks no longer see the LTV (“loan to value“) as the most important factor for their investment Now is a good time for pro- fessionals who have mastered the market and the operational side of the real estate business, because they can now buy at reasonable prices.

When you look at price levels, you need to mention that rising interest rates are trans- forming the investment property market from a “value product” where the expected value appreciation was the main investment motive to a new standing as a “cash product”. That

– Franz Pöltl

property financing, they look at the ability to meet the debt service from recurring cash flow as measured by the DSCR (“debt service cover ratio”).

Gabriele Schiemer: It’s become common practice to criticise the banks for excessive

applicable for the real estate sector: Buy without taking any serious steps to increase value, wait for a brief period and then sell at a premium. The market works completely differently in other areas, for example, in the industrial sector where you generally only generate a profit with value-creating measures. The past correction is obvious, but I wonder whether the past is really behind us or whether something else is on the horizon. Bernd Winter: I’d like to modify my criticism of opportunistic investors a bit. You’re not just looking at wicked investment property traders and respectable banks – and there is something else you shouldn’t forget: The low and zero interest rates that led at times to a negative interest policy resulted in a situation where money and leverage were free of charge. The market participants who maximised leverage and took high risks were the big winners for ten years.

investors purchased investment properties with virtually no equity and then sold fast – and created their own market. When you work with more or less 100 per cent debt financing, you are always in the red with a market correction. And that is exactly what happened due to the Ukraine crisis, not because the banks were suddenly financing less. In this respect, the present situation is not unusual from the long-term point of view and we shouldn’t really be surprised. It’s logical that Franz Pöltl is increasingly dealing with liquidators, and I don’t consider that very dramatic: Prices at good locations haven’t fallen as much as we can see from several examples in the first district. Anyone who made opportunistic purchases in clearly weaker locations at fantasy prices is paying the price.

financing in the past. And in certain cases, that could be true. But you can’t overlook the fact that we have a roughly ten-ye- ar zero interest phase behind us when financing could also be seriously presented at low returns. Naturally, these years also attracted a large number of opportunistic players who were too young to have gone through a full real estate cycle and believed interest rates would remain at the zero level while prices continued to rise. They were the first to get into trouble when interest rates started to rise in 2022 and are now our problem cases. Bernd Winter: I don’t think we should exaggerate the role of the banks here. In reality, what we are experiencing today is a normal market correction. The zero interest phase led to a situation where it was almost a “must have” to buy a few investment properties – whether as a retirement cushion or as a type of financial status symbol. We then had a completed overheated market where a new class of

Gabriele Schiemer: We saw the emergence of a business model that is really only

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