The Vienna Investment Apartment Market
A diverse, multi- faceted offering
The investment apartment market in Vienna is the oldest and by far the largest in Austria. The offering is impressive, not only in numbers – the wide range of projects on the market give investors the best opportunities to find made-to- measure products that meet their special demands.
Increase in the share of investment apartments purchased without input tax deduction These impressive figures only partly reflect the pace of the current market development. An increasing number of apartments are being pur- chased for investment purposes, whereby the buyers are waiving potential tax benefits and specifically the input tax deduction. These apart- ments are not included in the investment apart- ment statistics although they were purchased by private persons for rental purposes. The underlying reasons are, on the one hand, the declining importance of the tax benefits because the (already VAT-exempt) land component is continually increasing as a percentage of the total purchase price and the input tax deduction is, con- sequently, becoming much less important.
The residential construction boom in 2021 and 2022 also expanded the supply of investment apartments. The market has easily absorbed these new projects and set a new record with nearly 970 units in 2021. That represents an increase of more than one-third in a two-year comparison with 2019. Investments rose to a total of 235 million Euros in 2021, the average square metre price increased by roughly nine per cent year-on-year to 4,829 Euros, and rents reached 12.42 Euros/sqm. The positive trend that characterised recent years generally continued during the first half of 2022, despite a noticeable slowdown caused by the war in Ukraine and the related economic turbulence. All in all, roughly 770 investment apartments were sold in 2022 at an average purchase price of approximately 5,855 Euros/sqm.
Average rental prices on first-time occupancy and purchase prices (in Euros/sqm)
5,855*
6,000
14
12.95*
4,829
5,000
13
4,454
12.42
12.21
4,176
4,088
12.00
11.84
4,000
12
3,000
11
2,000
10
2018
2019
2020
2021
2022
Rental prices
Purchase prices
Source: EHL Market Research | Q4 2022
*Preliminary data
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