Poor balance sheet 2023

Carinthia’s real estate market also slumps

The real estate market is under pressure throughout Austria, but in Carinthia the situation is relatively less severe.

(Bild: stock.adobe.com)

Sales of apartments, houses and commercial properties fell in 2023. Carinthia was less affected than other federal states. Experts expect a slight recovery.

High interest rates, inflation and strict credit rules left their mark on Carinthia's real estate market in 2023. Although the declines here were less severe than in the rest of Austria, the sector was still hit hard. "9057 contracts signed in Carinthia represent a drop of 16.4 percent, compared to 25.3 percent in Austria," explains Daniel Lobnik, RE/MAX Carinthia. "In this environment, however, a smaller decline is already a success." Property sales achieved a turnover of 1.95 billion euros in the previous year - a drop of 20.8 percent. "We used to sell almost directly from the brochure. With the lower demand, prices are also falling," says Lobnik.

Even a small decline is currently a success. Interest rate cuts and the abolition of fees will bring recovery.

Daniel Lobnik, RE/MAX Pro Klagenfurt

Demand was still strongest in Villach and the surrounding area. "With 2373 bookings, Villach Stadt und Land is the second strongest rural district in Austria. There was only a drop of eight percent," confirms Lobnik. "Things look less good in the rest of Carinthia." Klagenfurt is only slightly behind at minus 10.5 percent. The decline was particularly sharp in the district of Hermagor. After a record 2022, minus 32.4 percent and 315 bookings mean last place.

For the real estate experts, the KIM regulation is the main problem. "It has broken the back of the market. Something needs to be done about it," emphasizes Lobnik. "But otherwise, interest rate cuts and the abolition of fees will bring a slight recovery." Inflation will also be cushioned by wage increases. "Capping interest rates on loans at 1.5 percent up to 200,000 euros will also help," explains the expert.

However, the situation is completely different for luxury properties. "Regions such as the Kreuzbergl in Klagenfurt and around Lake Wörthersee are still in demand. These are more exclusive areas with higher-priced properties," says Daniel Lobnik. "Strict credit rules don't play a role for these buyers. Nevertheless, they are also waiting a little to see if prices continue to recover."