Austria's new-build crisis: A glimmer of hope in the housing market?
Vienna (OTS) – On July 29, 2025, the Austrian Economic Chamber published the long-awaited 1st Austrian New-Build Report for the second quarter of 2025. This release, which has been providing continuous analyses of new residential construction projects for four years, once again attracted attention. The report, prepared by the experts at ‚Exploreal‘, offers a detailed analysis of the current market and shows that despite ongoing challenges there is a faint light at the end of the tunnel.
An overview of the current figures
The report shows that the number of market-rate rental units published rose to just under 5,810 by the end of the second quarter of 2025. That represents a significant increase of 24 percent compared with the first quarter. Industry experts view this development as a positive signal for the real estate sector, which has been struggling with falling completions since 2023.
Roman Oberndorfer, the new chairman of the professional association for real estate and asset trustees, emphasized the importance of these figures: "A positive impetus is more important than ever. After all, two thirds of new builds in large-scale residential construction are carried out by the commercial real estate sector — it urgently needs support."
Historical background and current challenges
To better understand the current situation, a look at the past few years is essential. Since 2023 there has been a marked decline in the completions of residential properties. The area of subsidized rental apartments is particularly affected, where completions have fallen by 10 percent, while the owner-occupied segment has seen a decrease of 8 percent.
For the entire year 2025 around 30,270 published units are expected, with only about 26,000 actually completed — a decrease of 30 percent compared with the previous year. Despite this decline, Vienna remains the leader in new construction in Austria with a projected 9,400 completed housing units in 2025.
Comparison with other federal states
While Vienna remains at the top, the situation in other federal states varies. In Vorarlberg and Tyrol, where construction costs are traditionally higher, completion figures have also decreased, further increasing pressure on the housing market. In contrast, Styria and Upper Austria show a more stable picture, as they are increasingly focusing on subsidized housing projects.
Concrete impacts on citizens
For Austrian citizens, this development means that pressure on the housing markets will remain high. Especially in cities like Vienna, Graz and Linz, where demand for housing is traditionally high, this could lead to rising rents. Experts like Dr. Helmut Maier, a renowned real estate analyst, warn that the combination of high demand and limited supply could drive prices even higher. "Without targeted measures to promote housing construction, we will face a significant shortage of housing in the coming years," Maier says.
Political contexts and dependencies
The current situation on the housing market is also strongly influenced by political decisions. Tight lending regulations, high interest rates and persistently high inflation make conditions difficult for builders and investors. Roman Oberndorfer therefore calls on politicians to urgently take measures to make home ownership more attractive and to stimulate new construction activity. "We need a clear commitment from the government to support housing construction," he emphasizes.
Outlook: What can we expect in 2026 and beyond?
Oberndorfer takes a cautious look into the future: "2026 should bring stability in nationwide completions, and from 2027 positive trends could actually materialize – especially since with around 2,500 newly announced projects currently, the pipeline is well filled again." This forecast gives hope that the Austrian housing market could return to a more stable footing in the medium term.
Sales figures in the new-build segment also show a slight recovery. Although they are still below 2021 levels, there has been an upward trend in real estate transactions since mid-2023, albeit with slight fluctuations. This development could indicate that the market is gradually stabilizing.
Conclusion: A faint light at the end of the tunnel?
The 1st Austrian New-Build Report for the second quarter of 2025 shows that the Austrian real estate industry faces major challenges. Nevertheless, there are signs of stabilization and possibly even a recovery in the coming years. The next steps taken by policymakers will be decisive in determining whether the faint light at the end of the tunnel can turn into a radiant sunrise for the Austrian housing market.
More information on the latest quarterly update of the 1st Austrian New Construction Report is available at this link to be found.
