Market Data
Next generation investment apartments
Investment apartment buyers currently have a wide variety of options which, in spite of the challenging economic environment, contain outstanding prospects for success.
Over roughly 30 years, or a generation after the term was used for the first time, the “investment apartment“ has become increasingly attractive for private investors. And although the name of the product is still the same, it has developed to optimally meet the steadily changing demands of the real estate and financial markets. The next generation investment apartments, meaning the properties currently entering the market, differ from their predecessors not just in details – and that exactly explains why this asset class continues to offer prospects for excellent and sustainable success and yields many decades after it established a fixed position as an invest- ment alternative. The changes and further development of the in- vestment apartment as an investment instrument are apparent in all key product characteristics: Different locations In the beginning, investment apartments were almost exclusively found in central locations (in Vienna, within the beltway). Today they are being built primarily in previously suburban areas and increasingly in urban development quarters. These locations offer higher current yields and, due to the lower purchase prices, frequently good prospects for value growth. Mixed use properties The concept of new buildings dedicated entirely to investment apartments has been largely replaced by mixed use construction. The anticipated con- flicts of interests between tenants and resident
owners has, for the most part, not materialised, and the combination of owner-occupied and investment apartments has often proved to be an optimal hybrid solution. This is especially true for larger properties with wide-ranging internal price structures, for example residential towers with high-priced units on the upper floors and more moderately priced units suitable for investment on the lower floors. Stability in size The average size of investment apartments in Vienna has declined slightly from nearly 52 sqm to roughly 51 sqm over the past three decades. This reduction is principally attributable to today‘s planning for new apartment types with its greater focus on efficient layouts and high functionality, also in smaller units, with no loss of living quality. In contrast, the provincial capitals of Graz, Klagen- furt and Linz have seen a considerable increase in the average apartments size from 47 sqm to 58 sqm in the last three years. This development basi- cally reflects the end of the trend towards smaller
Usable space in investment apartments in Austria (in sqm, based on transactions)
40 45 50 55 60 70 65
2019
2020
2021
2022
Vienna
Linz
Graz
Klagenfurt
4
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