Record at Neue Heimat

1000 apartments under construction, are rents now falling?

Pollo (left) and Tratter with the key figures for NHT only

(Bild: NHT)

After a dip in new builds, Neue Heimat Tirol (NHT) is now stepping on the gas, with around 1000 apartments currently under construction. However, there is only cautious hope that rental costs could fall. Important factors are unpredictable.

With 271 apartments and a total volume of 166 million euros, Neue Heimat Tirol (NHT) built significantly fewer units in the 2023 financial year than in the previous year (434). This year, however, the pendulum is swinging in the opposite direction again: "We have brought forward numerous projects and around 1,000 apartments are under construction. We are aiming for 711 handovers in 2024 - a record year," announced NHT Managing Director Johannes Tratter.

A slight decline is possible, but that is looking into the crystal ball.

NHT-Geschäftsführer Markus Pollo zu den Mietpreisen

Things are slow in other residential construction
Will rents generally become cheaper if the non-profit developers step on the gas? "A slight decline is possible, but that's looking into the crystal ball," admitted the second managing director Markus Pollo.

One problem is that residential construction in the commercial sector is sluggish. The most predictable factor for future rent levels is the (rather constant) construction costs. However, interest rates and energy costs are unpredictable factors.

More building sites than ever are currently under construction at the NHT (symbolic image).

(Bild: Birbaumer Christof)

Gas prices caused outrage
Speaking of energy: the price of gas in NHT apartments exploded at times from 2.27 cents/kWh to 15.73 cents/kWh. "That caused a storm of indignation," Pollo admitted. At the same time, construction costs have risen by 35 percent since 2021!

"Only" 10.82 euros/m² thanks to countermeasures
The NHT managing directors emphasized that a total of around 26 million euros from the company's own funds had been used to reduce rents as a countermeasure. As a result, the gross rent including heating was kept at an average of 10.82 euros/m².

NHT generated a balance sheet profit of 24.7 million euros in the previous year. The land reserves amount to around 165 hectares, but this is only enough for two years. "Affordable land is the bottleneck par excellence," is the conclusion.