If you take a look at Austria, the real estate world seems to be in balance which allows a pleasant break from the regular crisis news that is currently reaching us worldwide. Despite the record slump in the economy, the residential real estate market here is largely unaffected by the pandemic and continues to show itself to be crisis-resistant.
The strong rebound in Q3 is also fuelling hopes that the economic comeback will be dynamic even after the renewed corona restrictions have been lifted and will continue to be supported by fiscal measures. Nevertheless, the country with its relatively high GDP share in tourism is not entirely immune. To put it more simply: The forecast for the ski season 2020/2021 is more volatile than the forecast for the housing markets.
Here are a few facts that underpin our basic optimism:
- The government’s quick reaction with a large emergency fund of €38 bn (equal to about 10% of GDP) is cushioning the negative effects of the crisis.
- About 29% of the workforce was on short-time working at the end of April.
- Price dynamics accelerated further as growth amounted to 9.5% in the first three quarters.
- At 13.8%, the growth rate for single-family homes is strongest compared to the previous year.
- Compared to the first three quarters of 2019, the residential transaction volume fell only by 13% in 2020.
- International investors market share climbed to 45%, confirming Austria as preferred investment location.
- Yield compression in the multi-family housing sector has persisted across all cities.
- We expect that the demand of residential real estate investments will remain high.
- A possible spread of remote working by companies could further stimulate the overall demand.
These are just some of the reasons why we have dealt intensively with the Austrian real estate markets between Bregenz and Vienna, between Linz and Klagenfurt. We would therefore like to describe the market from our analysis as stable and resistant.