Vienna's Prices are slowing, but elsewhere Austrian Real Estate's Prices are soaring
Austria is a year-round destination, its alpine slopes attracting winter sports enthusiasts from November to March, and hikers and mountain bikers in spring and summer. In March this year, the Global Property Guide reported that outside of Vienna house prices were soaring, while Vienna itself had seen a cooling off of the market, as prices had simply become too expensive. However, Vienna remains one of the best places to live in the world, and as such, there will always be high demand for a property located in Vienna's First District, the Inner City of the Old Town, which is a UNESCO World Heritage Site simply bristling with stunning Baroque architecture and home to Austria's Imperial Palace.
Here investors will find the most expensive luxury real estate, where a square metre can easily cost between 6,000 and 16,000 euros, according to Alex Koch de Goorevnd, head of Knight Frank Austria. The very finest properties can even command prices of 30,000 euros per square metres. But even outside of this exclusive circle, Vienna is very expensive. Look at a fairly average apartment in the 13th District and you might still be asked to pay between 10,000 and 15,000 euros per square metre.
Away from the Baroque pomp and circumstance, however, prices become much more reasonable. An apartment in the beautiful city of Graz costs on average 3,500 to 4,300 euros per square metre. Mozart's home town, Salzburg, is overrun with tourists all year round, and this is reflected in the average price of between 4,600 to 5,500 euros per square metre.
With the exception of Vienna, cheap Austrian properties are generally found in the east of the country, for example in Lower Austria, or the Burgenland or Steiermark regions. Vienna's house prices are at least five times higher than those found in Burgenland and K�rnten, and rental prices are three times as high in the Austrian capital and touristy places like Salzburg. Steiermark is a particularly good place to look for apartments and single-family houses if you're looking for a holiday or second home, as this is one of the cheapest real estate markets in Austria.
Austrian Rental Yields
If you are looking for an investment with good rental yields, then Vienna should not be your first choice. Compared to other upmarket areas of Vienna, rental yields in Old Town Vienna, the First District, are actually quite poor. And compared to other parts of the country, they simply don't pass muster, given the high purchase price of a property.
Outside of Vienna, however, rental yields can be very lucrative. Buy a new ski apartment in the Tirol for example, and you may get juicy 8% return on your investment (Kristall Spaces Development for example in St. Anton, completion scheduled for December 2017).Winter tourism to St Anton rose by 3% last year, and by 10% in summer. According to UBS, prices in St Anton have risen by 8.2%, which means that rental yields based purely on winter income lie at an average of 3.6% return, and that's before summer income is taken into account. In Vienna, the average is just around 1.82%.
Most ski resorts in the Tirol region of Austria double up as summer resorts for hiking tourists. Prices in ski resort Fieberbrunn for example, which boasts 270km of pistes, start from 225,000 euros, promising 8% return on capital invested (calculation based on a purchase with a 55% mortgage).
In Austria's highest ski resort, K�htai, developers are so confident that they offer a guaranteed return of 4% in the first three years. Sitting pretty at an altitude of 2,020 metres and within a 35-minute drive of Innsbruck Airport, this resort is one of the most sought-after destinations for domestic and foreign investors, as is the famous dual resort of �tztal, which is a mere 25-minute drive from Innsbruck Airport. Here apartment prices start from 215,000 euros. The aforementioned resorts all boast some of the highest snowfall in the Tirol, but nearly all of them also attract tourism in spring, summer and autumn.