Housing markets are cooling off, yet uncertainty remains high

(, Vienna)

The 91st East Jour Fixe of the Oesterreichische Nationalbank (OeNB) on June 27, 2023 and the OeNB’s Property Market Review Q1–Q2/23 give comprehensive insights into recent turnarounds of housing markets in Austria and Central, Eastern and Southeastern Europe (CESEE).

In Austria and CESEE, latest available data on annual house prices show that growth has moderated after a prolonged period of extraordinarily accelerating prices. The dynamics of housing transactions and housing loan dynamics indicate some cooling off of housing markets as well. These are good news, as lower price growth provides some financial leeway for people planning to buy a house; but new challenges have emerged. Households are struggling with increasing living and financing costs, which is worsening housing affordability. Going forward, financial stability risks in CESEE may come to the fore, given high household indebtedness and rising interest rates for variable interest rate loans, expectedly stretching the debt-servicing capacity of households.

At the current juncture, housing markets are characterized by a high degree of uncertainty. The 91st East Jour Fixe “Housing markets in Austria and CESEE: Homing in on prices, affordability and financial stability” to be held on June 27, 2023, aims at giving insights into the future path of housing markets. The half-day event will bring together academics and policymakers to exchange views on recent house price developments, on burgeoning financial stability risks linked to housing markets and on housing affordability. For example, Laura Valderrama of the IMF’s European Department, where she is currently leading analytical projects on European housing markets, will deliver the keynote speech. Jaime P. Luque, Professor of Real Estate at ESCP Business School in Madrid, will focus on rent control and housing affordability.

For more details on housing market trends in Austria and CESEE, please refer to the OeNB’s Property Market Review Q1–Q2/23 – Austria and CESEE.

For further information concerning the East Jour Fixe, see the program. The workshop will take place on the OeNB’s premises and online via Webex.