The prices rose year-on-year by 9.5 percent, the price drivers being mainly single-family houses.
The trend of rising house prices accelerated in the third quarter. According to the Oesterreichischer Nationalbank (OeNB), prices rose by 9.5 percent nationwide in the period from July to September compared to the previous year.
In the second quarter, the increase was only 5.2 percent. The OeNB suspects that the price hike is due to the corona crisis (lockdown, home office) and the greater desire for green living and single-family homes. Because in Vienna the increase was slightly lower.
Overvaluation
In Vienna, residential property prices rose by 9.4 and 4.1 percent respectively – in the federal territory excluding Vienna a little more strongly by 9.7 percent in the third and 6.8 percent in the second quarter. Once again, the OeNB pointed to a noticeable overvaluation: The OeNB's fundamental price indicator for residential property in the third quarter indicated a 24 percent deviation in prices from the fundamental factors in Vienna, according to an analysis on Friday. Nationwide it is 17 percent. According to the OeNB, this has accelerated a development in the past few months that points to increasing overheating of the residential property market.
The price increase for single-family houses in Vienna was again above average in the third quarter – with 13.8 percent after 11.7 percent in the second quarter. The prices for used condominiums rose by 9.8 percent within a year, after 2.3 percent in the second quarter.
In the rest of Austria, single-family house prices recently climbed by 12.1 percent, after 10.6 percent; however, with a plus of 7.2 percent (after 2.6 percent in the second quarter), prices for used condominiums also increased significantly.
A special OeNB survey among private households in the second and third quarters revealed that older people are more likely than younger people to expect increases in residential property prices.
This involved assessing the price development for houses, apartments and land in one's own residential area in the coming twelve months and the amount of the expected price change. The proportion almost doubled from 17 percent among those under 30 to 31 percent among those over 60.
Less housing
According to the OeNB, the slowdown in residential construction that began in 2019 continued in the first half of the year. Residential construction investments fell by 3.0 and 7.9 percent year-on-year due to the first lockdown in the spring of the first two quarters. The production index in building construction was similarly subdued in the second quarter at minus 11.4 percent. “The end of the residential construction cycle, which had been emerging for two years, was intensified by the Covid 19 pandemic,” said the OeNB's conclusion.
In Vienna, on the other hand, according to estimates by EHL Immobilien, a new record will be reached in 2020 with almost 20,000 apartment completions – after 10,100 completions on average in the years 2015 to 2018.
