The Delphi of the property world - outlook for the property year 2025

Our first ACE Community TUesday of the new year took place on January 07, 2025. Matthias Grosse and Alexander Bosak from EXPLOREAL gave a review of the development of the property industry in recent years as well as an outlook for the near future.

Predicting the future has always been a fascination that attracts great interest, but while in ancient times the oracle interpreted the future with a bird's eye view and oracle bones, today collected data from past years provides the basis for an assessment of developments, including in the property sector.

A look into the future therefore first requires a review of recent years, where the figures analysed by Matthias Grosse and Alexander Bosak since 2022 show that there has been a steady decline in the number of completed residential units, taking into account both the entire federal territory and the result broken down by type of housing (ownership, rental, etc.).

This result may come as little surprise in view of the coronavirus crisis, rising construction costs and general inflation, as well as the effects of the KIM Ordinance, but it has now been objectified and quantified using Exploreal's data. Although the outlook for the current year and 2026 formally continues the downward trend in completions, this is levelling off and the last two quarters already show that the number of projects started that are reported as ‘in the pipeline’ has increased significantly. This leads us to expect a higher number of completions in all residential categories in the future. A corresponding increase in the number of new flats will also be necessary, as a comparison of data comparing the quantity of people moving to Austria, and Vienna in particular, with the amount of newly created living space shows an ever-widening negative ‘gap’ that will hopefully not widen any further in the future.     

On the price side, there are now also increases in the owner-occupied segment again, at least in Vienna; the average price per square metre for the federal capital was recently (Q4 2024) around €7,100, while the increase on the rental market is currently not quite as high as it was recently. Overall, the future is always uncertain, especially in our highly complex and volatile world, but the increased number of new projects means that positive conclusions can be drawn from the data, even though times remain challenging for the sector.