Vienna housing booms as market shifts to rental
Crisis or no, Vienna is in the midst of a residential boom that will see 19,000 apartments completed before the end of December. Work finished on around 9,000 of them during the first half of 2020, which is the first year in which supply will actually exceed structural demand caused by population growth and the reduction in average household sizes. This boom is being driven by a number of large-scale projects, each with several hundred units.
The biggest shift in the market structure is the move from owner-occupied apartments to rented flats thanks to strong demand from institutional investors interested in building long-term holdings. They are willing to accept ambitious price levels due to high liquidity and low interest rates. A particularly large proportion of the apartments that will be finished this year will be in the Donaustadt and Floridsdorf districts north of the Danube. The demand for apartments in central locations is still strong, and the development projects in Transdanubien and the residential towers currently coming onto the market are also being well received.