Densification necessary

“Construction package does not create a single private apartment”

Additions and extensions can help to meet the high demand for housing.

(Bild: Rene Knabl)

The construction package is a good first step, but does not go far enough for the private real estate industry. In Vienna alone, up to 100,000 additional apartments are possible through densification. However, this requires simplifications to the building regulations, for example.

"Accurate allocation, refurbishment of existing buildings and new living space through additions and extensions - that would boost the overall market without additional subsidies," emphasizes Michael Pisecky, Chairman of the Vienna Real Estate Trustees. Without new infrastructure costs, 60,000 new non-profit apartments would only be possible in the federal capital; there is also potential in other metropolitan areas. He is therefore calling for an "obligation to densify" for non-profit housing developers.

If commercial real estate construction collapses, living space will become even scarcer

(Bild: stock.adobe.com - Pormezz)

"But commercial property developers could also join in, the only thing that needs to be done urgently is to remove the restrictions from the building regulations and zoning." In some cases, these make it impossible to increase density and thus reduce land consumption. Up to 40,000 additional apartments would also be possible in the private sector in Vienna, i.e. a total of 100,000 units in the federal capital alone. "At the moment, we often only have greenfield sites to build on." However, this is hardly affordable at the moment due to high land prices and increased construction costs. The one billion euros estimated by the government for the construction and renovation of 25,000 apartments only affects the public sector, i.e. cooperatives and non-profit organizations. "However, the current construction package will not create a single private apartment," says Gerald Gollenz, chairman of the specialist group, expressing his concern.

New construction to fall by 86 percent by 2025
The industry is also expecting a dramatic decline in the construction of new commercial apartments due to the crisis. Private developers are currently building 30,000 new rental and owner-occupied units a year, but by 2025 this figure will be just over 4,000. "That is a projected decline of 86 percent. We are the largest house builder in the country and we are running out of steam," says Gollenz.

"However, the around 8,000 non-profit apartments built and renovated each year will not cover the shortage in supply compared to demand," adds Pisecky. In the past year, the private sector built two thirds of the apartments, and one in two people from the lower income bracket do not live in non-profit housing.

Gollenz is therefore convinced that the construction package can only be a first step. Although the shorter depreciation period for properties and the eco-surcharge for environmentally friendly measures are very welcome, this will not save private companies. Johannes Wild from the Lower Austrian real estate trustees: "Access to subsidies and loans must also be made easier for us, not just for private house builders and non-profit organizations."

"Quick clarity on measures"
The removal of the land register fee and the lien registration fee on the first home up to an allowance of 500,000 euros will naturally also help private individuals. However, clarity is needed here very soon, otherwise too many people will wait. "We can't afford it if everyone waits for months. It would be best if the abolition applied from tomorrow," appeals Gollenz. Announcing this and then taking time to implement it has a direct impact on buyer behavior. Therefore, at least this part of the package should be adopted very quickly.

Commercial landlords would naturally have little joy with a vacancy tax to combat the housing shortage, which is also being discussed. "Vacancies are never desirable from a commercial point of view anyway," emphasizes Pisecky.