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.
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