Is summer 2025 the time to buy in Austria or should you keep renting?

Prices are rising again, affordable housing is in short supply, and interest rates are only just beginning to ease. So is summer 2025 the time to buy? Or is renting still the better choice?

Like much in Austria’s housing market, the answer depends on where you’re looking, how long you plan to stay, and whether you’re doing it for yourself or as an investment.

Are property prices rising again?

After more than two years of declining real estate prices, housing costs in Austria are creeping back up — and faster than many expected.

According to Die Presse, residential property prices rose by 0.8 percent nationwide in the first quarter of 2025. In Vienna, the increase was even sharper at 1.2 percent, driven primarily by demand for new-build flats. Prices for existing apartments also climbed, though more slowly.

But does that mean the downturn is over? Not necessarily. “The market may slow down again in the coming quarters, or even slip into neutral or reverse,” Raiffeisen Research housing market economist Matthias Reith told the newspaper. For now, any talk of a clear trend reversal is premature.

READ ALSO: MAP: Where in Austria can you still buy an affordable property?

What about affordability?

While real estate isn’t cheap, it has become somewhat more accessible in relative terms. 

Wage increases have outpaced property prices, especially during the sharp inflation years. Reith estimates that even though nominal prices have only dropped around five percent from their 2022 peak, property has become 21 percent more affordable thanks to rising incomes. 

In Vienna, used flats are now around 25 percent more affordable compared to wages.

That’s a significant shift, especially for buyers who were previously priced out of the market. But improved affordability doesn’t mean it’s easy to buy. Financing remains a challenge, especially with stricter lending rules still in place for many buyers.

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Is supply improving or getting tighter?

If you’re hoping that a construction boom might ease housing costs, the data doesn’t offer much hope. Austria’s housing output is on a sharp decline. In 2024, only 32,100 new flats were approved for construction — down 8.5 percent from the previous year and the lowest figure since 2010, according to Statistik Austria.

“We’re facing years of significantly lower housing completions,” said Tobias Thomas, Director General of Statistik Austria. The country is producing about 40,000 fewer units per year than at the peak in 2017.

This supply squeeze is made worse by fewer existing homes on the market. In urban areas, especially Vienna, demand is growing while availability is shrinking — a recipe for rising prices.

Are investors returning to the market?

According to real estate agency EHL, buyer interest from both individuals and investors is picking up. 

The 2024 interest rate cuts have made financing more attractive again, and the return on investment is improving. Average yields are now around 3.8 percent, thanks to rising rents and low vacancy rates, especially in the mid-price segment.

Demand for investment flats in top locations has increased, and purchase decisions are being made more quickly, according to EHL. That means greater competition for prospective homeowners and tenants alike.

READ ALSO: Why Austria’s property prices could rise again by 2026

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Renting isn’t getting easier either

It’s not just buyers feeling the pressure. The rental market is also tight, especially in Vienna. With fewer new units and limited existing stock, rents continue to rise faster than inflation.

Apartments in popular price brackets are snapped up quickly. EHL notes that many flats are re-let immediately after a tenant leaves, and prospective renters often need to decide quickly just to get a foot in the door.

What about affordable housing?

Publicly subsidised and non-profit housing in Austria has long served as a buffer against extreme price pressures, but even this sector is feeling the strain.

“Affordable housing is increasingly under pressure,” said Isabella Stickler, Chairwoman of the non-profit developer Alpenland, in an interview with Kurier. She cited rising construction costs, high land prices, and slow approval processes as key challenges.

Christian Rädler, CEO of the WET Group, agreed, saying that the focus must shift to renovating existing buildings, making economic and ecological sense.

Hannes Stangl from SOZIALBAU AG added that while completions in the non-profit and municipal sectors are holding up better than in private construction, “finding affordable land remains the biggest challenge.”

READ ALSO: Property buying rules for international residents in Vienna

So, is it better to buy or rent right now?

The answer depends heavily on where you are, how long you plan to stay, and your financial situation.

In places like Vienna and Salzburg, it takes about nine years before buying becomes more cost-effective than renting. That’s blockuming you live on the property, not just investing in it. In Vorarlberg, the break-even point is closer to eight years.

The higher the purchase price compared to rent, the longer it takes to “catch up” financially. And in some markets, buying might not make sense at all, even after 30 years, especially if you could invest your money elsewhere with better returns.

If you’re buying as an investment, Austria’s real estate market still offers stability and decent long-term performance. 

A research paper cited by Die Presse shows that over the past 145 years, residential real estate has delivered average returns of 7 percent per year, comparable to equities but with less volatility.

But the picture is more complex if you’re looking for a place to live, not just a financial blocket. Renting offers flexibility, fewer upfront costs, and in many cases, access to housing that would be prohibitively expensive to purchase.

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Austrian real estate has historically been seen as a safe bet in uncertain times, and that perception still holds for many. The question is no longer whether prices will ever drop again (they did), but whether the current rebound is sustainable.

For those with stable incomes, long-term plans, and access to financing, buying may make more sense than it did just a year ago. But with limited supply, rising rents, and stricter lending rules still in place, renting remains the more realistic option for many, especially in Vienna and other fast-growing cities.

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