Residential property price growth in Austria noticeably above the EU average
()International Property Market Review for the first quarter of 2019 available online
In its most recent property market review, the Oesterreichische Nationalbank (OeNB) examines residential property price growth in Austria, Central, Eastern and Southeastern Europe (CESEE) as well as in the rest of the European Union (EU). Price growth is driven by the continued strong demand for residential property in Austria and the favorable economic conditions in CESEE.
Strong demand continues to push up residential property prices in Austria
At +8.0%, residential property prices in Austria continued to rise vigorously year on year in the third quarter of 2018, with domestic price growth clearly surpassing the EU average. At nearly +10% year on year, the pace of the residential property price increase was particularly marked outside of Vienna (i.e. in Austria excluding Vienna). Yet, in Vienna, too, prices accelerated more strongly in the third quarter of 2018, namely at 6.5% year on year, following several quarters of relatively modest price increases. The year-on-year growth rate of housing loans came to 4.9% in December 2018, as lending conditions remained favorable.
| Q3 18 | Q2 18 | Q1 18 | Q4 17 | Q3 17 | 2017 | 2016 | 2015 | 2014 | |
|---|---|---|---|---|---|---|---|---|---|
| Annual change in % | |||||||||
| Austria | 8.0 | 5.0 | 7.3 | 4.7 | 4.5 | 3.8 | 7.3 | 4.1 | 3.5 |
| Austria excl. Vienna | 9.7 | 6.0 | 10.0 | 7.3 | 4.5 | 4.9 | 9.1 | 5.1 | 3.1 |
| Vienna | 6.5 | 4.2 | 3.5 | 0.3 | 3.0 | 1.5 | 3.8 | 2.2 | 4.2 |
| Quarterly change in % | |||||||||
| Austria | 2.8 | 0.6 | 3.8 | 0.6 | -0.1 | x | x | x | x |
| Austria excl. Vienna | 2.6 | 0.5 | 4.1 | 2.1 | -0.8 | x | x | x | x |
| Vienna | 2.9 | 0.7 | 3.5 | -0.7 | 0.7 | x | x | x | x |
| Index (2000=100) | |||||||||
| Austria | 203.2 | 197.6 | 196.4 | 189.3 | 188.2 | 187.2 | 180.4 | 168.1 | 161.4 |
| Austria excl. Vienna | 192.0 | 187.1 | 186.2 | 178.8 | 175.0 | 174.9 | 166.7 | 152.9 | 145.4 |
| Vienna | 236.1 | 229.4 | 227.7 | 220.1 | 221.6 | 220.4 | 217.2 | 209.2 | 204.6 |
| Source: Data Science Service GmbH (DSS), Vienna University of Technology, Prof. Feilmayr, OeNB. | |||||||||
Rising residential property prices mirror favorable economic conditions in CESEE
According to data published by Eurostat, the rise in property prices in most CESEE countries clearly outstripped the EU average of 4.3% in the second and third quarters of 2018. The high demand for residential property mirrors the region’s positive economic environment, as evidenced by strong income growth, historically low unemployment rates and a relatively optimistic growth outlook coupled with continued favorable financing conditions. At the same time, specific subsidy schemes continue to help boost demand in many countries.
Many other euro area countries also see residential property prices go up
Apart from Austria and the CESEE countries, the Netherlands, Ireland, Portugal, Spain and Luxembourg also recorded dynamic increases in residential property prices in the second and third quarters of 2018. Faced with a price decrease over the same period, Italy was the only country running counter to this trend.
