Sharp rise in apartment prices – oesterreich.ORF.at
business
The prices for residential real estate continue to show a marked upward trend. In the whole of Austria, growth above the 10 percent mark was recorded in the third quarter today, as the Oesterreichische Nationalbank (OeNB) stated in its latest real estate market analysis on Wednesday.
In Vienna there was an increase of 10.2 percent compared to the same period in the previous year, in the other federal states of 10.6 percent. According to the National Bank, the price dynamics have accelerated further.
The prices for more and more depend on fundamental factors. The OeNB’s fundamental price indicator for residential real estate “indicates an increasing overheating of the residential real estate market”.
Rate of increase slightly weakened
In Austria as a whole, the annual price increase in the third quarter of 2021 is believed to be 10.4 percent, after an increase of 11.7 percent in the second quarter. “The trend of significant price increases has been going on for five quarters across Austria,” emphasized the OeNB. Compared to the previous quarter, however, the price dynamics have weakened somewhat. After a plus of 3.9 percent in the first quarter, prices across Austria only rose by 2.4 percent each in the second and third quarters.
The dynamic in the federal territory excluding Vienna fell from 4.6 percent in the first quarter and 2.7 percent in the second quarter to 1.5 percent.
Meanwhile oversupply?
Compared to the previous quarter, prices in Vienna increased by 3.3 percent between July and September this year. In the second quarter they had increased by 2.2 percent compared to the first quarter. In the rest of Germany, the quarter-on-quarter trend has calmed down a little. In the period from July to September, prices increased by only 1.5 percent compared to the previous quarter, after an increase of 2.7 percent in the second quarter of the year compared to the first.
In the first half of the year there was a further expansion of construction activity and a sharp rise in construction costs, emphasized the National Bank. The number of building permits is still at a high level. The excess demand that had prevailed in the past few years had already been reduced in 2020. According to the OeNB, an oversupply of apartments can already be expected across Austria in 2021. However, there is still a housing shortage in some regions or market segments.