Fewer new apartments: “The supply won’t be large for much longer”
Fewer homes will be built in the coming years – this is prompting the real estate industry, which fears a supply gap.
The construction cranes that have been turning in many conurbations in recent years have slowed down quite a bit. Less is being built – and this is mainly due to the high interest rates and construction costs and people’s reduced willingness to buy in view of the prices.
This is also shown by figures from the Exploreal property developer database on behalf of the Real Estate Association of the Chamber of Commerce. In recent years. More than 40,000 residential units have been reliably completed across the country every year. This year, the figure is likely to be just 39,100, but from 2025 onwards, the dip in completions will be much more noticeable.
Forecasts for 2025 assume only 27,100 residential units, which corresponds to a decline of 38 percent. “This affects all segments,” says Matthias Grosse from Exploreal – i.e. not only commercial but also subsidized residential construction.
Stable prices
In the privately financed housing sector, these figures are already ringing alarm bells: “We are two minutes to twelve. At some point, there will be a problem and the demand for housing will no longer be met,” says Gerald Gollenz, Chairman of the Association of Real Estate Trustees in the Austrian Chamber of Commerce.
And where there is less supply, prices will rise – that is the logic of the market. However, this is not yet noticeable. The asking prices are currently relatively constant nationwide at around 6,300 euros per square meter. This corresponds to an increase of two percent compared to the previous quarter. In Vienna, the price per square meter for new-build property development projects is currently just under 7000 euros, while the cheapest price per square meter is currently in Burgenland at 4500 euros.
Affordable housing
The WKÖ does not expect prices to fall. According to Michael Pisecky, Chairman of the Vienna Section, this is also due to the fact that this is not even possible in new builds. This is due to high land and construction costs and high interest rates. Although the decline in transactions is a problem for property developers, demand has been rising again since 2023. Those who are not currently reliant on financing would be well advised to act now: “There won’t be much supply for much longer,” says Pisecky.
He sees redensification as one way of making housing more affordable again. People always talk about social housing in connection with affordable housing. “But it’s not that much cheaper,” says Pisecky.
This is why commercial developers are still needed, which is why the necessary framework conditions are needed to be able to build affordably. Naturally, the industry does not believe in rent regulations to cap the rise in rents: “If you can’t earn more with it, you won’t build it anymore.” (zof, 22.5.2024)
Translated from the German:
Source: Der Standard – Franziska Zoidl
Image by Jürgen Rübig from Pixabay