"Demand is picking up"

Real estate costs “only” eleven years’ salary

Anyone who wants to call 100 square meters their own will have to fork out more than eleven years' salary.(Bild: Markus Wenzel)

It takes around eleven annual salaries to finance an average 100-square-meter apartment. This means that home ownership has become more affordable since 2022. However, high levels of uncertainty are causing many to continue to hesitate—and in a long-term comparison, real estate is still not a "bargain."

Home ownership is becoming more affordable again – as shown by both credit growth and prices, which have risen less sharply than real incomes. Since 2022, average net incomes have risen by 20 percent, while real estate prices have fallen by 2.7 percent. As a result, an average 100-square-meter apartment now costs 11.2 times the average annual income, or around €360,000. Around four years ago, the figure was 14.4.

Interest rates also play a decisive role. From 2022, the ECB raised key interest rates to up to 4.5 percent, and now they are back at around two percent.

"Demand is picking up noticeably again"
"Demand for residential construction financing is picking up noticeably again," says Daniela Barco, member of the Executive Board of Bank Austria. The volume of loans across all banks increased by a whopping 50 percent, but remains a good third below the high level of 2021 and also below the pre-corona level of 2019. At that time, however, there was a zero interest rate phase and a real boom in construction.

(Bild: Krone KREATIV/stock.adobe.com)

So why are so few people confident enough to buy property? It's mainly a question of psychology. Even though the facts show that the dream of owning your own home is becoming more affordable, in uncertain times people are more hesitant to take out a loan or even inquire about one.

Not a bad time
Right now might not be such a bad time, because real estate prices are showing a trend reversal: prices are rising again, and according to the OeNB's residential price index, they have been on the rise again since the third quarter of 2025. However, there are big differences between new and existing apartments, with new construction picking up more significantly, and Vienna standing out.

Bank Austria is responding to the improving mood with a "housing package worth 150 million euros," according to Barco. The fixed interest rate is 2.8 percent p.a. fixed for five years. Fixed interest rates appeal to a relatively large number of customers, as people have become more sensitive since the end of zero interest rates. Due to the falling interest rate trend, fixed interest rates are currently even cheaper.