Vienna Records Decrease in Real Estate Prices, Becomes Weakest Market in Europe

According to the Bloomberg news agency, prices per square meter in Vienna have fallen by an average of 12.2 percent.

In Vienna, stricter regulations for housing loans and competition from a large rental market are exacerbating the slump and pushing asking prices down to an average of EUR 7,084 per square meter in May. Further declines are expected. The prices were derived from an average of the asking prices in the 23 city districts on the internet portal immopreise.at.

In the face of rising interest rates and high inflation, more Viennese families are staying in rented apartments instead of buying, according to real estate agency s Real Immobilienvermittlung. However, real estate prices in Vienna are still high. First, easy financing conditions during the Covid-19 pandemic have fueled demand for housing. According to the Oesterreichische Nationalbank (OeNB), real estate prices in Vienna were 40 percent above the fundamental value at the end of 2022.

Since then, according to OeNB data in March, the volume of new mortgage loans for households has fallen by more than 60 percent year-on-year. “The next few months will remain challenging,” said Martina Hirsch, head of s Real, via email to “Bloomberg”. “We expect continued weak demand and a market that is cautious and slow to adjust.”

In comparison, the price drop in Stockholm is relatively small at 6.4 percent. Of the nine cities currently being monitored, only Madrid, Milan and Zurich recorded increases.

Data for Dublin shows prices fell 2.4 percent in March. With the Irish government considering reintroducing mortgage relief to help consumers. There were also declines in Berlin, by 1 percent in April. For Spain, a weakening of the residential real estate market is expected in the second half of the year, Borja Garcia-Egotxeaga, CEO of Spanish housing construction company Neinor Homes SA, told Bloomberg. “But real estate prices will continue to rise.”