A look at individual districts reveals who the winners and losers are from interest rates. Price rises and falls are sometimes only a few kilometers apart.
In the last ten years, the price of residential property in Austria has doubled. However, incomes have only risen by about 50 percent. When interest rates rose, demand for residential construction fell significantly. As a result, new home loans were halved. In this environment, construction activity also went to a long-term low. Politicians are now trying to alleviate the situation with a “housing package”.
With that in mind, the price has come down, but surprisingly little. Home ownership has fallen just four percent since prices peaked in the summer of 2022. In comparison: real estate prices rose 23 percent in the previous two years alone (2021 and 2022). There are strong regional differences. Sometimes the areas of price increase and significant price decrease are few kilometers apart. How can it be so?
