“Upper Austria’s Building Land Speculation Crisis: Why Young Families Struggle to Afford Land”

Building land has become unaffordable for many people. This is not only due to inflation, but above all to the fact that many owners are speculating with their properties. Instead of building on their land, they withhold it from the market to drive up the price. This makes it impossible for many young families to obtain land at fair prices. An SPÖ application should stop speculation with rare building land in Upper Austria – black and blue rejected it.

In Upper Austria, a total of 11,000 hectares are dedicated to building land. This corresponds to an area larger than the provincial capital Linz. Within the last five years, between 220 and 380 hectares of building land have been added. Nevertheless, affordable building land is scarce on the market. Because many speculators hoard their properties and thus hold them back from the market. In doing so, they reduce the available supply and artificially inflate prices. In order to stop this speculation, the SPÖ is calling for building land to be automatically reclassified as grassland after 7.5 years if it is not built on. This would ensure that owners actually use their building land for building – and not misuse it for speculative purposes.

Building land speculation in Upper Austria: the market situation will continue to worsen

Already on April 20, the SPÖ submitted a corresponding application in the state parliament session. ÖVP and FPÖ rejected this. SPÖ spatial planning spokeswoman Heidi Strauss says on the vote:

Especially in times of high inflation, the retention of building plots as a replacement savings book is all the more attractive for the owners. Today’s rejection with a black-blue majority will make the market situation even worse, which is of course bad for all prospective house builders.

Black and blue protect speculators

Instead of bringing affordable building land back onto the market, Black and Blue are protecting speculators by rejecting the application, stresses Strauss. The trend, according to which fewer and fewer people can afford their own home, is thus being further promoted. According to the real estate index of the Chamber of Commerce, the average price per square meter for a building plot in Upper Austria continues to rise. For a plot of 600-800 m² it is now between 104 (Schärding district) and 838 euros (Linz Stadt district). This corresponds to a price increase of 11 or 20 percent compared to the previous year.

Wifo expects stagnation in the construction industry

Because of the high interest rates Demand for housing loans has already fallen to a record low. The high prices for land do the rest. The Wifo Institute therefore expects one for this year and for 2024 real stagnation in the construction industry.