OeNB Expands Online Information on Austrian Real Estate Market

Starting today, the Oesterreichische Nationalbank (OeNB) makes available on its website comprehensive information about, and analyses of, the Austrian real estate market. The information is targeted at both the general public and experts. The OeNB Residential Property Market Monitor of December 2014, which is also published on the website, shows that the rise in residential property prices lost considerable momentum in the third quarter.

Residential Property Market's High Relevance Calls for Ongoing Monitoring of Prices

The real estate market plays a crucial role in a country's economy, with residential property being the most important component of households' wealth. As the purchase of property is usually, to some extent, debt financed, changes in property prices affect households' ability to repay loans and, as a result, also have an impact on the banking sector. Furthermore, the construction industry is a major employer, and investment in construction influences economic activity. Residential property is of key importance also from a social perspective. Property price developments therefore have far-reaching implications for the economy as a whole and for financial stability.

Information about current developments in the Austrian residential property market has so far been incomplete, however. To identify potentially adverse trends at an early stage, the OeNB has developed methods facilitating the ongoing monitoring and analysis of the residential property market.

Comprehensive Information on the Austrian Residential Property Market

The OeNB website now provides access to the OeNB's property market analyses and their underlying data. This includes, in particular, the quarterly publication of the Residential Property Price Index for Austria, compiled by the Vienna University of Technology in cooperation with the OeNB, and the ongoing monitoring of the Austrian residential property market. The monitoring results are published monthly as a fact sheet providing an overview of the most important data on the Austrian residential property market. In addition, once every quarter, the OeNB publishes its fundamentals indicator for residential property prices, which helps detect potentially harmful market developments. Twice a year, the OeNB compiles a comprehensive analysis of residential property market developments, covering both price developments and key supply and demand factors as well as aspects in connection with how households fund property purchases and with their indebtedness. Apart from these regular contributions, the website also offers access other publications and studies related to the Austrian real estate market (e.g. the Household Survey on Housing Wealth 2008, the housing cost survey 2010, Household Finance and Consumption Survey 2010) and material on workshops and conferences organized by the OeNB. Finally, the website also includes an extensive list of useful links.

The OeNB Property Market Monitor of December 2014: Marked Slowdown in Residential Property Price Growth in the Third Quarter

The year-on-year growth of property prices in Austria slowed to 2.5% in the third quarter 2014 (Vienna: 2.2%); against the previous quarter, there was even a decline in prices (Austria: –1.2%, Vienna: –2.5%).    The OeNB's fundamentals indicator for residential property prices indicates that the overvaluation of residential property in Vienna fell from 23% in the second quarter to 20% in the third quarter of 2014. For Austria as a whole, the indicator still shows that prices are justified by fundamental factors. Housing loans to households continue to grow only moderately, although the conditions for taking out housing loans have remained favorable. The currency breakdown shows that foreign currency loans continue to lose ground in favor of euro-denominated loans.