Residential property prices in Austria continued to rise also in third quarter of 2021
(, Vienna)Vienna saw price growth accelerate, while the rest of Austria recorded a marked slowdown
According to the most recent property market review of the Oesterreichische Nationalbank (OeNB), the growth of residential property prices in Austria has picked up further momentum, with growth rates remaining above the 10% mark year on year also in the third quarter of 2021, both in Vienna (+10.2%) and in the other provinces (+10.6%). In Austria as a whole, prices climbed by 10.4% in the third quarter, following 11.7% in the second quarter. When compared against the previous quarter, the pace of price growth accelerated in Vienna in the third quarter of 2021 (+3.3% after +2.2% in the second quarter), while subsiding markedly in the other provinces (+1.5% after +2.7%).
The clear uptrend in Austrian residential property prices continued for the fifth quarter in a row, although the quarter-on-quarter pace of growth has been weakening somewhat. Having picked up by 3.9% in the first quarter of 2021, quarter-on-quarter price growth for Austria as a whole increased by no more than 2.4% both in the second and in the third quarters of this year, respectively. For Austria’s provinces excluding Vienna, the change in growth amounted to +2.7% in the second quarter and +1.5% in the third quarter of 2021, down from +4.6% in the first quarter of the year.
| Q3 21 | Q2 21 | Q1 21 | Q4 20 | Q3 20 | Q2 20 | Q1 20 | Q4 19 | Q3 19 | 2020 | 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Annual change in % | |||||||||||
| Austria | 10.4 | 11.7 | 12.3 | 10.0 | 9.5 | 5.2 | 3.4 | 3.0 | 2.3 | 3.9 | 6.9 |
| Austria excl. Vienna | 10.6 | 12.8 | 14.9 | 10.7 | 9.7 | 6.8 | 2.8 | 1.2 | 1.7 | 2.6 | 8.5 |
| Vienna | 10.2 | 10.7 | 10.9 | 9.4 | 9.4 | 4.1 | 3.9 | 4.3 | 2.7 | 4.9 | 5.2 |
| Quarterly change in % | |||||||||||
| Austria | 2.4 | 2.4 | 3.9 | 1.3 | 3.6 | 3.0 | 1.7 | 0.8 | -0.4 | x | x |
| Austria excl. Vienna | 1.5 | 2.7 | 4.6 | 1.5 | 3.5 | 3.8 | 1.5 | 0.6 | 0.8 | x | x |
| Vienna | 3.3 | 2.2 | 3.3 | 1.1 | 3.7 | 2.4 | 1.9 | 1.0 | -1.2 | x | x |
| Index (2000=100) | |||||||||||
| Austria | 251.2 | 245.3 | 239.4 | 230.4 | 227.5 | 219.5 | 213.1 | 209.5 | 207,8 | 208.0 | 200.1 |
| Austria excl. Vienna | 236.9 | 233.3 | 227.3 | 217.2 | 214.1 | 206.9 | 199.3 | 196.3 | 195.2 | 194.8 | 189.8 |
| Vienna | 292.2 | 283.0 | 276.8 | 268.0 | 265.1 | 255.6 | 249.5 | 244.9 | 242.4 | 243.2 | 232.0 |
| Source: Data Science Service GmbH (DSS), Vienna University of Technology, Prof. Feilmayr, OeNB. | |||||||||||
OeNB fundamentals indicator suggests that deviation of prices from fundamentals continued to increase
The OeNB fundamentals indicator for residential property prices points to increasing signs of overheating in Austria’s residential property market.
Construction activity expanded further, and related costs rose sharply in the first half of 2021
The first six months of this year saw construction activity expand further and construction costs surge, with the number of building permits remaining at high levels. Excess demand for residential property, which had prevailed in recent years, started to subside in 2020; in fact, the market is expected to tip into a state of oversupply already this year. That said, a number of regions and market segments will continue to see shortages.