Market Development in 2025/26
Investment properties on hold
Transactions on the Vienna investment property market fell visibly short of expectations during 2024 and the first months of this year. With a total volume of only 1.10 billion Euros –roughly 1.01 billion Euros for entire properties and 90 billion Euros for investment property shares – the previous year marked the lowest level in nearly a decade. It also represents a
Price declines in the 1st District were limited to 10 to 15 per cent on average. For larger properties like the Renngasse from the portfolio of the bankrupt Signa Group, plenty of interested buyers are still prepared to pay acceptable prices.
frequently risen up to four per cent or even higher in districts outside the beltway. In the outlying districts (apart from the popular green areas and attractive micro-locations), yields currently reach five per cent or more. Transactions with six per cent yields have also been concluded when location factors are negative and/or the building substance is in poor condition. This development has, in total, led to a stronger differentiation between locations and submarkets. Compared with the boom phases when top prices were also realised in remote areas, the price differences between good and average locations have increased significantly. In other words, this gap reflects the different scope of risks and potential for value appreciation in these submarkets.
Prices in the prime central locations have remained considerably more stable than the market average.
decline of more than 60 per cent compared with the record set in 2021.
All the same, volume develop- ments show a slight easing. The year-on- year decline slowed considerably to less than ten per cent in 2024, and the second six months actually brought an increase after the first visible signs of a gradual decline in interest rates. There are, however, no indications of a recovery in prices. Square metre prices remain under pressure and a turnaround is not yet in sight. The prices for investment properties have not remained stable in any of the Vienna districts during the past three years. The declines vary widely but the general rule shows that the better the location, the lower the price declines. A comparison of the Vienna districts shows – and this is hardly surprising – the best performance in the Inner City.
The declines become stronger compared to pre-2022 prices as the distance to the city centre increases. Attractive locations between the beltway and ring road generally see reductions of 20 to 30 per cent, while average to weaker locations in the outlying districts are confronted with a minus of up to 50 per cent in extreme cases or even higher in exceptional situations. Furthermore, these submarkets are currently very illiquid. Sales outside the beltway often take quite long to complete, independent of the price. The price declines have led to a significant increase in yields. They are still compar- atively low at 2.25 to 2.5 per cent at top locations in the 1st District, but have
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Investment Property Report
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