An interesting year. The institute for real estate industry (IFI) concluded in their trend report that 2017 is going to be an interesting year for the Austrian real estate sector. The real estate experts forecast an increase in supply in almost all asset classes for 2017 except for the supply of landed properties.
The institute for real estate industry (IFI) concluded in their trend report that 2017 is going to be an interesting year for the Austrian real estate sector. Real estate experts expect very dynamic market activity alongside good options for steady returns, but they also predict uncertainty on the rise.
88% of the polled Austrian real estate experts work in the residential real estate sector, 67% are active in the office segment, 63% work at least part time in area concerning property. 44% work in other areas such as industry real estate, logistics and commercial properties, 36% work in the luxury sector, 35% work in retail real estate and 23% work in real estate concerning student housing. 65% view Vienna as the dominant region when it comes to economic real estate experience. As it is to be expected in Austria - a country where the economy including the real estate sector are dominated by small companies - 46% of the questioned real estate experts work in the smallest category of companies (up to 9 employees). 22% work in companies with 10 to 49 employees, 17% work in medium sized companies (50 to 249) and 15 % work in large companies.
The real estate experts forecast an increase in supply in almost all asset classes for 2017 except for the supply of landed properties.
Their opinions are differ significantly when it comes to questions concerning demand: Residential properties are dominating here (69% say demand is going up); followed by the submarket: student accommodations (61%) and land (60%). There is a clear decrease in demand for retail property in 2017. Assessments of the demand for other asset classes are modest.
There is a lot of variation concerning price expectations: 70% expect an increase in prices in 2017 compared to 2016, only 1% expect a drop, the remaining experts expect no change or didn’t specify. Residential real estate paints a similar picture: 60% think prices will go up, 2% down. The remaining asset classes achieve this level.
The most frequently named challenge for 2017 is the tax framework (60%), the second challenge named is the development of the economy (42%).
Other big challenges: interest rate development (35%), purchasing power (33%) and the national political development (30%). Further wishes concerning laws and other changes: 78% would like to see a reform of the rental laws, 59% would like tax cuts for energy-efficient revitalisations, 54% would like to see a reduction of non-wage labour costs, 51% would like to stimulate the investment tax allowances for the purchase of housing.
Further interesting details:
16% think that investments in housing subsidies are too high in Austria, 50 % say they are too low and 16% think they are exactly right (18% gave no information).
45% view object funding (funding property) as the most sensible housing subsidy, 41% prefer subject funding (paying housing assistance directly to eligible tenants), 14% provided no information.
The Austrian real estate sector has a very relaxed outlook on possible effects of BREXIT: 25% predict positive effects, 57% expect none and 10% expect negative effects (9% no information)
The two most important characteristics for buildings of the future are energy efficiency and low operating costs (79% each), then space efficiency (69%) and the optimisation during the life cycle (50%).
51% believe the risk factors on the Austrian real estate market are going up, only 3% think they are going down.
23% think there will be a decrease in returns, 20% predict an increase.
26% foresee better conditions before the end of 2017 in their own branch, 12% think the conditions are getting worse.
However, regarding the Austrian real estate industry, only 7% expect better conditions by the end of 2017 (compared to the end of 2016), 22% expect worse conditions in comparison.
6 Top Trends for 2017
- Increased risk while returns remain unchanged
- Big challenges concerning the legal framework and tax laws
- Strong growth and market pressure concerning residential properties
- Property is scarce and prices are going up
- Mediocre or modest development in all commercial sectors
- Danger of real estate bubble is highest in the investment sector
The “IFI” trend study 2017 was created in cooperation with …
- CARI (Collegium Academicum Rerum Immobilium)
- FIABCI AUSTRIA
- ImmoABS Immobilienabsolventen der TU Wien
- Immobilienring IR
- IMMOEBS
- IMMOZERT Zertifizierungsgesellschaft mbH
- IMMQU Verein zur Förderung der Qualit.t in der Immobilienwirtschaft
- ÖGNI (Österreichische Gesellschaft für Nachhaltige Immobilienwirtschaft)
- ÖVI (Österreichischer Verband der Immobilienwirtschaft)
- RICS (Royal Institution of Chartered Surveyors Österreich)
- Salon Real Frauen in der österreichischen Immobilienwirtschaft
- Vereinigung der allgemein beeideten & gerichtlich zertifizierten Sachverständigen für das Immobilienwesen