Subsidized housing will decrease sharply in 2021 – Vienna Online – Austria
Last year, subsidized housing in Austria collapsed drastically, falling by 22 percent.
The number of subsidized housing units fell by 22 percent in 2021 to 18,400 units across Austria, according to the housing subsidy and building permit statistics published on Wednesday by the Association of the Stone and Ceramic Industry and the Institute for Real Estate, Building and Housing (IIBW). The new construction boom of recent years has come to an end.
Subsidized housing collapsed by 22 percent in 2022
Expenditure on housing subsidies slipped below the 2 billion mark in 2021 to just 1.91 billion euros – a noticeable drop of 6 percent compared to the previous year and “the lowest level in 30 years”, according to the statistics. They are also 17 percent below the ten-year average. As a result, the funding figures also fell sharply in 2021. This reflects the massive economic upheaval and the multiple crises more broadly. There are only positive signals in the area of refurbishment funding.
The state’s housing subsidies in 2021 reached around 0.4 percent of gross domestic product (GDP). They were thus below the OECD average. In the 1990s, the value was still 1.3 percent of GDP.
The subsidy rate for subsidized buildings was below 15 percent in 2021
In the past year, the funding throughput – the ratio of building permits to subsidized buildings – was below 15 percent for private homes, in Carinthia, Styria, Vienna and Burgenland it fell below 10 percent. In the large-volume area, on the other hand, the throughput reached 36 percent in the past year.
“For the first time in many years, there were massive declines in building permits, subsidies paid out and subsidized housing units last year,” emphasized Robert Schmid, Chairman of the Stone and Ceramics Industry Association.
Rising construction costs due to rising energy prices
“The rising construction costs due to increasing energy prices and reorganized supply chains contributed to the fact that fixed price offers could be submitted less and less,” explained Schmid. Naturally, this variability dampened demand.
According to the information, while 78,000 residential units had been approved for construction in 2020, in 2021 there were only 73,000. A further decline to 62,000 building permits is expected for the current year 2022.
Renovation funding for residential units 2021 positive
However, the refurbishment subsidy is calculated positively in 2021 – the number of subsidized refurbished residential units (homes and apartments) increases by 20 percent to 72,000.
“Against the background of rising energy prices and the urgent need to reduce energy consumption, the importance of refurbishment funding cannot be overestimated,” says Schmid.
The new construction boom in Austria is coming to an end
“The new construction boom is coming to an end,” states study author and IIBW managing director Wolfgang Amann. After historical highs of 85,000 building permits in 2019, things went steadily downhill in the following years.
6.3 housing permits in Austria per 1,000 inhabitants
Across Austria there were 6.3 housing permits per 1,000 inhabitants in the past year. Relative to the number of inhabitants, Vorarlberg (8.3) and Tyrol (7.2) had above-average new building volumes. According to the information, new construction in Vienna is particularly volatile and fell back to the Austrian average in 2021 – after a value of 9.1 in 2020.
Austria-wide 18,400 subsidies for housing guaranteed in 2021
Of the 18,400 funding commitments nationwide in 2021, 3,700 were for private homes and 14,700 for large apartment buildings. In total, a third fewer housing units were subsidized than the ten-year average.
In almost all federal states, home ownership has “lost massively in importance”. More than 1,000 homes per year are only subsidized in Upper Austria. In all other federal states there are a few hundred units or even less.
Home ownership lost its importance, renovations are flourishing
Instead, the renovations flourished. Funding expenditure for home renovations will increase by almost 10 percent to over EUR 510 million in 2021. According to current statistics, just over 27,000 homes and around 45,000 apartments were renovated with subsidies – an increase of 20 percent. The refurbishment and funding programs of the federal government aimed at more climate-friendly heating.