Investment Property Report 2023

must also include the availability of the required service providers. Otherwise, you can’t reliably calculate. Dornaus: We also need to urgently solve a number of problems related to rental laws. In particular, legal regulations indicate that the installation of sustainable ESG-compatible heating systems is also possible without tenants’ consent. For tenancy conversions, the unanimity principle must at least be questioned where, in the sense of balancing interests, there is no objective reason to arbitrarily prevent this type of upgrading. Included here are environmentally re- levant measures as well as areas that involve an increase in value or the improvement of residenti- al quality, for example through loft extensions or the addition of balconies. Let’s turn to the issue that ultimately counts: Where do you see investment property prices after one and a half rather difficult years? Dornaus: According to our estimates, this de- velopment will remain with us – especially in view of the steady increase in interest rates. Prunbauer: If legislators establish appropriate framework conditions, I am optimistic for the long run. The fact that negative market interven- tion like the suspension of indexing or a vacancy duty were not implemented at the federal level provides grounds for hope that, in the end, eco- nomic rationality will also prevail in the political sector. Erath: In any event, substantial equity resources will be required in the coming years, and these funds will only be available when there is a return. And only then will it be possible to preserve the supply of older buildings over the long-term. Pöltl: Over the short-term, I see a number of challenges, but am optimistic for the long-term. I expect prices will remain under pressure up to the end of the present interest rate cycle. That will be followed by a new market level which, ho- wever, will be lower than the top values recorded in 2021. In other words, we are facing a number of difficult years and the “buy, cosmetically

improve and quickly sell at a profit” business model won’t work. But Vienna is growing steadily, investment property locations are becoming more popular and the outlook for long-term inves- tors is very good. A number of potential buyers have already realised this. We are in discussions with a Swiss fund that wants to use the changed environment for market entry. I am therefore very optimistic that we will soon see a revival of the interest of sceptical investors like insurance companies in investment properties.

Kaspar Erath is Chairman of the Association for the Revitalisation and architectonic Upgrading of Vienna’s 19th Century Buildings.