Projects rescheduled

Cooperatives are now building more rent-to-own apartments

The WSG, which operates out of Linz - here Chairman of the Board Stefan Hutter - is increasingly planning to convert projects to installment plan.(Bild: Krone KREATIV/FotoKerschi, Zoe Goldstein,)

Housing cooperatives have responded to changing conditions and are increasingly converting owner-occupied projects into hire-purchase projects. Stefan Hutter, Chairman of the Board of the Linz-based WSG, talks about the flexibility for potential buyers, favorable timing and the advantage of a mix in the resident structure.

The stricter guidelines for granting housing loans, higher interest rates and significantly higher construction costs have led to a sharp slump in the property market. The housing cooperatives have also responded to this by adjusting their construction programs.

"We have already stopped some ownership projects at the end of 2022 and switched to rent-to-own," says Stefan Hutter, Chairman of the WSG Board. Together with Alexandra Petermann, he manages the business of Upper Austria's second-largest housing cooperative, which manages more than 13,500 residential units.

Particularly favorable opportunity after ten years
An installment plan is a tenancy agreement with a later purchase option. "The tenant has the right to buy the property after a certain period of time," explains Hutter. The opportunity is particularly favorable after ten years of renting: Anyone who buys the apartment at that point does not have to pay the 20 percent VAT on the construction work. A major advantage of moving into a lease-purchase apartment is the flexibility: the tenant can buy the property, but does not have to.

The WSG sets a fixed price at the beginning of the contractual relationship, which applies if the option to buy is exercised. It is the more transparent and usually much cheaper option for the buyer. Hutter likes the mix of owners and tenants in a building: "Owners look more at the building."