Austria’s housing market will see notable developments in 2025. From changes for renters to new opportunities for homeowners, find out what’s in store. From rising rents to relaxed property regulations, 2025 is shaping up to be a pivotal year for both renters and homeowners in Austria. Whether you’re considering buying your first home or navigating changes in your rental costs, here’s what you need to know.
Rents in Austria will increase starting April 1st, 2025, following the end of a rent freeze in 2024. This will affect the so-called “guide value” and “category rents” in older buildings regulated by the Tenancy Act, but it usually also affects private agreements. These increases will be capped at five percent, based on the average inflation rate for 2024. However, tenants in non-regulated flats may face higher costs, as these rents can rise according to pre-agreed clauses without legal limits. According to Vienna.at, nonprofit landlords will also adjust rents and maintenance contributions by up to five percent.
The expiration of the KIM Regulation (Credit Institutions Real Estate Financing Measures Ordinance) in June 2025 is expected to make home loans more accessible.
This regulation, introduced in 2022 to prevent risky lending, required buyers to provide at least 20 percent equity and capped loan terms at 35 years. While effective in reducing defaults, it also created barriers for middle-income earners and young families. With its expiration, lending terms will likely become more flexible, opening doors for many prospective buyers. The easing of these rules is expected to boost property purchases and encourage more residential construction.
Interest rates are easing after years of increases. The European Central Bank has gradually reduced rates, and ten-year mortgage rates now hover around 3.2 percent - down from 3.6 percent a year ago. Although still above the ultra-low rates of the past, the decline could save buyers hundreds of euros monthly. Experts predict a modest recovery in the property market, with slight price increases in high demand areas such as Vienna and Tyrol.
While buying may become more manageable, renting will remain competitive. A RE/MAX study shows that rental flats in central and urban locations will continue to be the most sought-after properties. Demand is expected to rise by nearly 10 percent in central areas. However, the supply of rental flats decreased by over 13 percent in 2024, creating challenges for renters. Newly negotiated rents are anticipated to rise significantly, particularly in city centres, further intensifying competition for affordable options.
Demand and supply are set to grow for single-family homes in 2025. The RE/MAX study notes that single-family homes remain a top choice for buyers, with prices expected to stabilise after a period of decline. Increased supply will make this a favourable time for buyers looking to invest in these properties.
Tenants must remember their responsibilities when it comes to maintenance. While landlords must handle major repairs to heating systems and boilers, tenants are responsible for routine maintenance, such as cleaning and ensuring proper functioning. The Chamber of Labour advice tenants to keep records of maintenance checks to avoid disputes. If heating systems fail, tenants should report the issue in writing. If repairs are delayed, tenants may be entitled to a rent reduction. However, self-repairs could void this right, so following proper procedures is best.
Unlike the residential market, commercial property is expected to remain subdued. The RE/MAX study highlights low demand for office spaces and retail properties, likely keeping prices stagnant in this sector.
Whether you’re renting or buying, 2025 brings significant changes to Austria’s housing market. For renters, understanding your rights and responsibilities is key to navigating rising costs. For prospective homeowners, experts say the expiration of strict lending rules and lower interest rates offer an opportunity to invest.
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By Proptechbuzz
By Ravi Kumar