Austria's new-build crisis: A ray of hope in the housing market?
Vienna (OTS) – On July 29, 2025, the Austrian Federal Economic Chamber published the eagerly awaited 1st Austrian New-Build Report for the second quarter of 2025. This publication, which has continuously provided analyses of new residential construction projects for four years, has 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 apartments rose to just under 5,810 published residential units by the end of the second quarter of 2025. That corresponds to a significant increase of 24 percent compared to the first quarter. Industry experts view this development as a positive signal for the real estate sector, which has been struggling with declining completions since 2023.
Roman Oberndorfer, the new head of the trade association of real estate and asset trustees, stressed the importance of these figures: "A positive impulse is more important than ever. After all, two-thirds of new construction in large-scale residential building is 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 years is essential. Since 2023, there has been a marked decline in residential property completions. The area of subsidized rental apartments is particularly affected, with completions down by 10 percent, while the owner-occupied segment has seen a decline of 8 percent.
For the entire year 2025, around 30,270 published units are expected, with only about 26,000 actually to be completed – a decrease of 30 percent compared to the previous year. Despite this decline, Vienna remains the leader in new construction in Austria, with a projected 9,400 completed residential units in 2025.
Comparison with other federal states
While Vienna continues to lead, the situation in other federal states varies. In Vorarlberg and Tyrol, where construction costs have traditionally been higher, completion numbers have also decreased, further increasing pressure on the housing market. By contrast, Styria and Upper Austria show a more stable picture, as they are placing greater emphasis on subsidized housing projects.
Concrete impacts on citizens
For Austrian citizens, this development means that pressure on 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 such as Dr. Helmut Maier, a renowned real estate analyst, warn that the combination of high demand and low supply could push prices even higher. "Without targeted measures to promote housing construction, we will be confronted with a significant housing shortage in the coming years," Maier said.
Political contexts and dependencies
The current situation on the housing market is also strongly influenced by political decisions. Strict lending regulations, high interest rates and persistently high inflation make conditions difficult for builders and investors. Roman Oberndorfer therefore urgently calls on politicians to take measures to make property 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 awaits us in 2026 and beyond?
Oberndorfer takes a cautious look to the future: "2026 should bring stability in nationwide completions; from 2027 positive tendencies could actually materialize – especially since the pipeline is well stocked again with around 2,500 newly announced projects." This prognosis gives hope that the Austrian housing market could return to a more stable footing in the medium term.
Sales/utilization figures in the new-build segment also show a slight recovery. Although they are still below the level of 2021, an upward trend in real estate transactions has been observed 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 political steps will be crucial in determining whether the faint light at the end of the tunnel can turn into a radiant sunrise for the Austrian housing market.
Further information on the current quarterly update of the 1st Austrian New-Build Report is available at this link can be found.
