Residential property prices continue to rise also in first quarter of 2021()
Price growth still driven by single-family homes and new owner-occupied apartments
According to the most recent property market review of the Oesterreichische Nationalbank (OeNB), the growth of residential property prices in Austria has accelerated further, reaching 12.3% in the first quarter of 2021, after 10.0% in the fourth quarter of 2020. In Vienna alone, price growth was similarly strong at +10.9% in the first three months of 2021 (fourth quarter 2020: 9.4%); in all the remaining provinces taken together, prices rose by 14.0% in the same period compared with the previous quarter (10.7%).
|Q1 21||Q4 20||Q3 20||Q2 20||Q1 20||Q4 19||Q3 19||Q2 19||2020||2019||2018|
|Annual change in %|
|Austria excl. Vienna||14.0||10.7||9.7||6.8||2.8||1.2||1.7||3.6||7.5||2.6||8.5|
|Quarterly change in %|
|Austria excl. Vienna||4.6||1.5||3.5||3.8||1.5||0.6||0.8||0.0||x||x||x|
|Austria excl. Vienna||227.3||217.2||214.1||206.9||199.3||196.3||195.2||193.7||209.4||194.8||189.8|
|Source: Data Science Service GmbH (DSS), Vienna University of Technology, Prof. Feilmayr, OeNB.|
Prices increasingly deviate from fundamentals
In the first quarter of 2021, the OeNB fundamentals indicator for residential property prices in Vienna suggests a 25% deviation of prices from fundamentals; for Austria as a whole, this figure amounted to 19%.
Construction activity in 2020 clearly impacted by COVID-19 pandemic
Restrictions during the first lockdown in spring 2020 led to a temporary cooling of construction activity. Thanks to a comparatively quick recovery, construction has already reached pre-crisis levels, however. Housing investment fell by 4% year on year in real terms in 2020, while the number of property transactions rose by 5.1%.
Households’ intentions to renovate or buy remain unchanged according to survey data
The monthly consumer confidence barometer surveys households across Austria not only about their confidence but also about their plans to improve, renovate or buy property – either for themselves or family members, be it vacation homes or rental property. According to the survey, households’ plans for renovating or buying remained more or less unchanged during the COVID-19 crisis. In light of increased property prices, people’s aspiration for home ownership, which was fueled by the pandemic, did not, on balance, increase their propensity to buy property.