Buy-to-let demand is booming in Vienna, as overseas buyers increasingly turn to the Austrian capital for reliable yields.
Vienna has long been a city on the watchlist for many overseas house-hunters, thanks to its persistent ranking among the world’s best places to live, both in the Economist and Mercer indices. Culture, too, abounds in levels that rival New York and London, although “it adds a level of privacy, discretion and security that few other global cities afford”, notes Knight Frank.
Nonetheless, Austria is not a company of homeowners. Like Germany, at 56 per cent, Austria has one of the lowest residential ownership rates in Europe – a figure that drops even lower in Vienna to 20 per cent. With 6.6 million tourists visiting the city every year, generating 14.3 million overnight stays, the potential for landlords is appealing.
Now, Knight Frank reports that investors are increasingly targeting the city’s pied-a-terre market, where attractive yields are on offer in “key up-and-coming districts”.
“The metropolitan area of Vienna accounts for a third of Austria’s population and in the last decade the population of wealthy people living in the city has expanded faster than any of its neighbouring northern European cities, including that of
London,” notes Knight Frank. “It comes as no surprise therefore that mainstream property prices across Austria are up 52 per cent since 2008 and Vienna’s prices have edged even higher, up 72 per cent in comparative terms.”
As capital growth in the prime areas has slowed, the pied-a-terre and development markets have come under greater scrutiny from investors. Gross residential yields of 3 to 4 per cent are being achieved in areas surrounding the inner city districts.
Particularly popular are the 21st and 22nd Districts, which is where population growth is strongest, resulting in similarly high development activity.Google+