Affordable property?

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Lawog CEOs Christoph Khinast (left) and Frank Schneider are satisfied with the results, but believe that the market for condominiums, for example, is currently very difficult.(Bild: Lawog)

Because ownership is becoming increasingly difficult to afford - especially for younger people - Lawog, which - as reported - had a very successful year with a construction volume of 109.7 million euros, recently had to convert 17 of 27 owner-occupied apartments into rental apartments. CEO Frank Schneider explains.

Prices for residential real estate in Austria and the eurozone have risen much faster than average net incomes over the last 15 years. In addition, there are significantly stricter lending guidelines for real estate loans. According to the so-called KIM regulation, only 40 percent of income can be used for interest and repayments. This is not the only reason why the affordability of housing has decreased significantly. A circumstance that poses challenges not only for private, but also for non-profit developers.

"This is also changing living habits"
Lawog CEO Frank Schneider: "There is a clear trend towards property being difficult to afford, especially for young people these days. Of course, this is now benefiting us in terms of rental housing, but of course this is also changing people's lifestyles and values. Because if I say I can never afford property unless I've inherited something, hit the lottery jackpot or married rich, then I might say to myself that I'll make my rented apartment nice and go on vacation more often."

"The market is difficult at the moment"
He continues: "Of course, we are committed to ownership, even if we build more rental properties. But we also want to have a certain mix. But just one current example: We recently sold 10 of 27 condominiums and therefore 17 of them have now been refinanced as rentals. This is despite the fact that the apartments in Linz-Wegscheid, with a price per square meter of EUR 3,800 including an underground parking space, are relatively inexpensive properties. We do have a few property projects in the pipeline. At the moment, however, the market is simply difficult and, according to many opinions, nothing will change before 2025."