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Property Prices In Austria Growing Strongly

News Posted On: 03 November 2011

According to the latest data, low interest rates and rapid economic growth is fuelling strong growth in Austria property prices. In Q1 property prices grew 2.5% compared to the previous quarter, and by 2.36% on the year, with prices in Vienna up by 9.52% year on year – a growth of 6.45% in real terms. The Q1 growth follows an increase of 1.4% during the fourth quarter of last year.

The lower price rises throughout the rest of Austria are less predictable, Vienna has seen steady growth since the third quarter of 2004, which may be partially due to the fact that there is very little building land in the centre of the city.

Property prices are expected to continue increasing in Austria during next year as people look for safe assets. Inflation in the country is rising, but mortgage rates are low and this is increasing the demand for housing. The average fixed rate on deals of between one and five years was 2.45% in August, compared to 3.7% two years earlier, while mortgages fixed for more than 10 years were 4.87%, down from 5.12% two years ago.

Austria was affected by the global crisis, with a sharp decline in the number of new mortgages taken out in 2009. However, the country’s strong subsidised housing sector helped stabilise construction activity, and the government took action at the end of 2009 to make lending easier, fuelling a growth in mortgages taken out in 2010.

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