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PROPERTY

Property in Austria: A roundup of the latest news and info

Stay up-to-date on the latest Austrian property news with The Local's weekly roundup.

Property in Austria: A roundup of the latest news and info
Apartments in the Austrian city of Innsbruck. Photo by Jacek Dylag on Unsplash

Thinking of buying a house, moving house, investing or just curious about the property market in Austria? 

Here’s our first edition of our weekly property wrap. 

No sign of a price drop in the Austrian property market

Since the start of the pandemic last year, property prices in Austria have continued to increase with no sign of it slowing down yet.

Raiffeisen Research expects prices in the real estate market to keep rising throughout 2021 and interest rates are not expected to increase until 2025.

As a result, demand remains high among investors and private buyers with a recent survey by real estate broker Interhyp AG revealing 73 percent of tenants want to own property.

This coincides with results from the Property Index 2021 by Deloitte that shows new apartments in Austria are the most expensive in Europe at €4,457 per square metre – an increase of 5.84 percent from last year.

This means a 70 square meter apartment costs an average of 10.6 times the national annual salary. 

Gabriele Etzl, real estate expert and partner at Jank Weiler Operenyi / Deloitte Legal, said: “Despite the year of the Corona crisis, housing prices in Austria continue to rise. 

“The rising construction costs and the high attractiveness of real estate as an investment form are the main reasons for this price development.

“At the moment everything indicates that this trend will intensify in the next few months.”

READ MORE: New apartment prices in Austria are highest in Europe

The Austrian National Bank recently warned of overheating in the property market but other experts, like Michael Haller, CEO at Hypo Vorarlberg Bank, are not worried about a possible risk for investors.

Instead, Haller told ORF he expects prices will soon stabilise at the current rate, “with slight fluctuations upwards or downwards” after that.

Additionally, Andreas Luschnig, Manager of Interhyp in Vienna, told the Salzburger Nachrichten that this is a good time to consider housing finance as interest rates remain low.

The cost of renting in Austria is going up

According to the Kronen Zeitung, “private sector rents have exploded” in Vienna with a square metre now costing on average €10.

This means landlords are receiving 50 percent more in rent than they were 10 years ago.

An increase in rent prices in Austria’s capital city is not restricted to the private sector either, with the municipal sector going up by 23 percent and cooperatives by 29 percent in the past 10 years.

FOR MEMBERS: ANALYSIS: Where are real estate prices on the rise in Austria?

However, Innsbruck has been named as the most expensive city in Austria for rent following a study by Immowelt. In Innsbruck, the average rent is €18,80 per square meter.

Towns in the east of Austria, such as Jennersdorf in Burgenland, are the cheapest places to rent where people pay less than €7 per square meter.

Salzburg is the second most expensive city for rent in Austria at €16,0 per square meter.

In July of this year, the average rent price in Austria rose by 1.2 percent due to inflation.

Is it still possible to find a bargain in the Austrian capital of Vienna? Photo by Geula Prochazka on Unsplash

The luxury homes market is booming

The luxury homes property market has performed well throughout the pandemic as wealthy buyers search for more space and a quieter lifestyle outside of the main cities.

This is being driven by a move towards remote work and wealthy Austrian citizens overseas looking for a new base in their home country, according to an article in Der Standard.

Real estate agents in Austria are also reporting an increase in enquiries from people in Germany searching for a luxury home in Salzburg or the surrounding area.

READ MORE: Can foreigners buy property in Austria?

Another article highlighted the luxury property market in the Kitzbühel district of Tyrol, which has increased by 20 percent since the start of the pandemic.

Mortgage Broker Manfred Hagsteiner told Der Standard that some houses are selling for up to €25 million and that the ceiling on prices “has still not been reached”.

Earlier this year, Peter Marschall, CEO at Marschall Real Estate, told The Local that German buyers have been flocking to Kitzbühel in Tyrol due its close proximity to Munich. 

“People want to own a second home in a nice area,” he said.

“The crisis has highlighted these areas to international buyers more than Vienna.”

Did you know?

The City of Vienna has a rent calculator for tenants to find out if they are paying too much rent and might be due a refund.

Rent in Vienna is famously affordable due to rent control rules on buildings built before 1945 which are smaller than 131m2. These high-ceilinged buildings are also known as Altbau.

However, experts predict that 80 percent of tenants could be paying too much rent to live in these properties.

The rent calculator can be found at the City of Vienna website.

FOR MEMBERS: How to find out if you are paying too much rent in Vienna

The property roundup is new addition and we’d welcome any feedback or suggestions for areas it should cover. Please email us at [email protected]

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For members

FAMILIES

EXPLAINED: What you need to know about parental leave in Austria

Mutterschutz, Papamonat, Karenz, and Familienbeihilfe: here's your guide to the main concepts and schemes for parental leave in Austria

EXPLAINED: What you need to know about parental leave in Austria

When it comes to parental leave, Austria has one of the most extensive systems in the European Union and the world.

This is mainly because, when you consider all the combined benefits, parents can have paid leave for years – even if not on their full salary or working part-time. The system is also very flexible, with different options that parents can choose.  

There are a few essential words and schemes that people looking to take parental leave in Austria should know. The Local talked with Severina Ditzov, legal advisor and co-founder of Austria for Beginners, to understand how parental leave and family benefits work in Austria. 

Mutterschutz

In Austria, there is a period of Mutterschutz, or “maternity protection”, that starts eight weeks before the baby’s due date and continues for eight to 12 weeks after birth. The mothers are not supposed to work during this time, and companies need to follow this period strictly. 

READ MORE: The smartphone apps that make living in Austria easier

During Mutterschutz, mothers receive an allowance known as Wochengeld, which consists of 80 percent of their previous salary. The process for the leave and the benefit is made by the company directly with the government, and the idea is to protect the pregnant woman.

When the child is born, fathers can take up to one month of unpaid leave, known as Papamonat (Daddy month). “This can be taken within the first three months of the birth of the child”, Ditzov explains. 

The “daddy month” is considered unpaid leave, but fathers can ask for a up to € 700 payment (equivalent of €22 a day) compensation from the state. Certain companies will offer new dads a couple of days off paid after the birth but this depends on the company and sector agreements in place.

Karenz

After the end of Mutterschutz, parents can ask to go on a Karenz, or parental leave period – the release from work in return for a suspension of wages. 

Austria has a quite flexible scheme, and parents can switch twice between who takes the benefit. They can stay on Karenz for a total of two years, though the minimum period for parental leave is two months. There’s also a protection against employment termination that ends four weeks after the end of the parental leave.

During parental leave, the families receive government payments, known as Kinderbetreuungsgeld, depending on the scheme they choose.

READ MORE: Six helpful tips to save money on food shopping in Austria

It is possible to obtain a lump payment every month or a percentage of average salaries, and the actual amount will be calculated based on how long the parental leave will last. Parents who take longer leaves will receive a lower monthly allowance. 

“The payment and the time on leave don’t need to match, so parents can choose to stay for two years on leave but only receive the payment for six months, for example,” says Ditzov.

Of course, that would mean the payments would be higher, even if for fewer months.

Persons who have not had gainful employment subject to compulsory insurance in Austria in the 182 calendar days preceding the child’s birth, which includes homemakers, and people who recently moved to Austria, will be entitled to the flat-rate childcare allowance.

“Even if you never worked in Austria before, as long as you follow certain requirements, mainly proving that your centre of living is in Austria, you are entitled to the flat-rate payment”, Ditzov says. 

Parents need to apply for childcare allowance, and the mother will need to show the Mutter Kind Pass, a document proving she has correctly carried out the mandatory examinations. 

Elternteilzeit

The parents who have worked with the same company for at least three years are entitled to request Elternteilzeit or “parents part-time”.

In that case, they can negotiate with employers to find a part-time working solution, usually working fewer hours every day or working fewer days a week.

However, not all companies can provide the scheme, as they need a minimum number of employers, and there are also requirements for employers.

Family benefits

Austria offers several benefits packages to families – some not conditioned to having worked in the country at all. 

For example, the Familienbeihilfe is paid monthly to every child resident in Austria until they turn 24 – with some exceptions. The amount depends on the child’s age but can reach € 165.10 a month for one child.

The only requirements are that the parents’ centre of life is in Austria and they live with the child. From 18 years of age, there are also requirements and conditions regarding education and schooling.

“Even if the child just moved into Austria, and even if they are not babies, they are entitled to that money as long as parents live here legally and are insured”, the advisor added. 

In addition, families get tax benefits for having children or in case of single parents, for example. Families with children between the ages of six and 15 also get the yearly Schulstartgeld every September, an automatic €100 payment before the beginning of the school year. 

Among the bonus possibilities is a € 1.000 partnership bonus that parents can request if they have received childcare allowance in approximately equal proportions (50:50 to 60:40) and for at least 124 days each. 

Austria has several online calculators to help families check their benefits depending on income or duration of parental leave.

Most of the benefits are either automatic or can be requested online with the insurance provider or FinanzOnline, and it’s worth checking the resources and making a plan based on what works best for your family.

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