Restrictive new construction raises the prices of investment apartments in the Austrian Alps

While the year 2023 was a disaster for the residential real estate market throughout the European Union, apartment prices in the tourist areas of Austria grew at a double-digit rate. Is that what it was for?

Average price of an apartment of the area 60 m² in the Tyrolean Kirchberg has grown by 51.5% over the last two years 7,300 EUR not at all 11,000 EUR / month². In Velden on the Carinthian Lake Wrthersee, the same large apartment cost only a year at a 40% discount 5,400 EUR were spent on items no 7,700 EUR per square meter. Last year, even in famous Alaskan centers such as Zell am See, Kaprun or Schladming, residential real estate prices grew at a rate of 19%, and with a large reserve, they beat the inflation rate.

In the surrounding countries, the real estate market stagnated at best, but in the tourist areas of Austria, real estate prices rose as if the rates and the situation on the global real estate market had not affected them at all. Stable price growth and resistance to external changes is the result two factors, which we cannot find in other European countries. The first of them is defined by law in the way residential real estate is used, the second is an article limiting new development projects.

source: www.wohnungsboerse.net

The allowed way to use it is the longest

The first and key factor is by law, the method of disposal, which is defined in the Austrian Alps for every property intended for housing. According to this criterion, the meme is divided into t groups:

– real estate for permanent residence,

– real estate belonging to the type of dwellings (so-called Zweitwohnsitz), or use unlimited time,

– real estate for tourist rental.

Houses and apartments of the first variable category are intended for those who have lived or want to live in the given area. The owner suddenly decided to live here, and his dau residence is also derived from him. Real estate for leisure use, which corresponds to the cottages and cottages so popular with us, is at an absolute minimum in Austria, and in the most popular tourist areas there are practically none at all.

Foreign investors are thus left with the last option, which is apartments, chalets or even individual hotel rooms, which must be converted into tourist hostels. The owner of such an apartment is registered in the real estate cadastre as the owner, but with regard to its use, it is subject to an operational contract with a management company that takes care of the complete operation (quietness, maintenance, repairs, drinking water, running the reception, managing reservations and offering accommodation on advertising portals). The owner usually only uses his apartment for a few weeks a year.

If you take a vacation or an extended weekend in Austria and live in a classic apartment in a typical boarding house, it is quite possible that each of the apartments in a given hostel has a different owner, a domestic and a foreign investor. In this form, he can safely deposit his pension and, in addition to their appreciation in the form of an increase in the price of the property, he also realizes income from the lease, reported Tom Chrobk from SUR Real Investments, which specializes in the sale of investment apartments in the Alps.

source: www.wohnungsboerse.net

In recent years, the hrt has also taken on the role of an overpass, in which the development project and the location itself are located. Investors are slowly opening up the resort in countries where the lack of snow and closed slopes threaten the occupancy of local accommodation facilities during the winter season. It is obvious that the attention of foreign private investors is shifting towards the Austrian Alps as a result of climate change. And even here, the sky above the sky is a factor in guaranteeing snow in five years. noted Michael Frlich, business editor of the development company Limestone Holding GmbH. She recently completed a luxury hotel in Hinterstoder at about 1,400 meters above sea level, and individual apartments for private investors.

Source: www.wohnungsboerse.net

Stable price growth and attractive income

The reason why Austria decided to restrict the form of real estate for non-residents (and foreigners or residents of other parts of Austria) is the following. Instead of the uncontrolled construction of houses and apartments for the duration of holidays and weekends, only a limited number of aparthotels with a high occupancy rate arose in the popular tourist areas of Austria. Thanks to this, localities like Slden or Kaprun did not double in size and turn into ghost towns with hundreds of houses and apartments that only open a few times a year.

At first, due to the limited supply, investors can therefore expect a stable increase in the prices of their real estate without fluctuations, which are typical for example for Spain and Portugal.

Meanwhile, the long-term average growth of real estate prices in the Austrian Alps is falling 8% (and in selected areas bv you), certain income from the tourist hostel after deducting operating costs and remuneration for the maintenance company reaches other 4 7% renter prices ron, complements Bug.

Living in the Alps – luxury only for locals?

However, there is one reason behind the limited supply of investment property, which leads to a steep rise in prices. The pressure to limit the number of non-resident property owners is gradually spreading to buy-to-let projects, especially in the federal state of Salzburg. The operator of the apartment complex is also often benevolent to the use of the apartment by the owner during the off-season. The local municipality considers this practice to be a hidden use of unlimited free time for women owners, and will try to fully prevent the creation of new apartment houses in the future.

As a result of the amendment to the local law on the transfer of land (different from March 1 this year), the apartment operator in Salzburg is obliged to submit an operating contract with the owners for approval. Any over-standard first wear by the owner, which deviates from a normal paid hotel stay, may be against the law. The current situation even leads to a lawsuit and a judgment that will determine the rules of private education in this federal country for years to come.

The courts will most likely side with the owners of the apartments, because the effort to limit the use of their own apartments has, according to many expert opinions, gone beyond the limits of the construction violations of the first owners of real estate. Even so, the very essence of the dispute shows the attitude of the Austrian public towards the spitting of non-resident investors, which has the result that there are significantly fewer new building permits for projects with investment apartments.

The prices of investment apartments in the Austrian Alps will therefore rise even higher.