Thinned-out offering in the federal capital
The decline in residential construction activity in Vienna is also leaving its mark on the investment housing market. In practically all submarkets, fewer apartments are on offer than in 2022 and especially 2023, although developers are again focusing on indi- vidual sales of apartments instead of overall sales to institutional investors. In the first half of 2024, however, there is (still) a suffi- ciently diverse and high-quality offering.
Vienna is by far the largest submarket of the Austrian investment housing market and the development in the federal capital is therefore in many ways also trend-setting for other federal states. Vienna trends are therefore reflected in the overall Austrian market figures, albeit with a time lag in some cases. The most significant change occurred in the second half of 2023 and the beginning of 2024: The decline in the number of completions in new residential construction is reflected one-to-one in the supply of invest- ment apartments, as the vast majority of owner-occupied projects now offer a choice between purchase for owner-occupation and investment apartments. The downward trend is mitigated, but not fully compensated for, by the trend towards individual sales rather than overall sales to institutional investors. As some projects from the building permit boom years of 2019 and 2020 are currently still being completed and coming onto the market, the supply is still good and varied. In the course of 2024 and especially 2025, investors will only have a limited choice. Initial yields are higher
year-on-year because rents are rising. The increasing shortage of living space in Vienna suggests that this positive trend will continue. Yields are currently mostly in the range between 2.8 and 3.6 percent. There is also a continuous change in the number of residenti- al units acquired for investment purposes: It is no longer just one- and two-room apartments that are in demand; compact three- and even four-room apartments (approx. 60 or 80 sqm) are also sought after. This segment is experiencing strong growth due to the shortage of three- and four-room apartments on the Viennese rental market. The yields are similar to smaller apartments thanks to the compact, highly efficient floor plans. This is also advantageous from an investor‘s point of view, as larger units have fewer tenant changes on average.
Klederinger Straße 63-65 1100 Vienna
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