In Upper Austria

Real estate prices are recovering at a “walking pace”

The dream of owning a home is unbroken - but high prices make it difficult to realize.(Bild: stock.adobe.com/KB3)

After the sharp slump, Raiffeisen Upper Austria is once again experiencing growing interest in real estate loans. What should potential buyers expect when they start looking for a new apartment or house? The current situation is that used properties are currently falling in price more than new ones.

Higher interest rates and thus higher financing costs, stricter lending guidelines and more expensive real estate projects because building materials, labor and land cost more - all of these factors have caused the real estate market to suffer drastic declines.

The Raiffeisen Banking Group Upper Austria recorded a drop of around two thirds in new residential construction loans from 2022 to 2023. Although the level is currently still significantly lower than before, the trend is clearly rising again.

The trough seems to have bottomed out. We are once again seeing increased interest in advisory meetings for real estate loans.

Heinrich Schaller, Generaldirektor RLB OÖ

"The focus is increasingly on renovations, conversions or even projects that are being thought about more long-term in the planning and construction phase than in recent years," says Heinrich Schaller, CEO of Raiffeisenlandesbank Oberösterreich, who presented the trends on the real estate market with experts from Raiffeisen Research on Friday.

New-build apartments remain expensive
What is currently emerging? New-build apartments remain expensive, the price of second-hand properties is falling, but declines are taking place at a "walking pace".

Where have prices in Upper Austria fallen in recent months? According to Gunter Deuber and Matthias Reith from Raiffeisen Research, prices for single-family homes fell in the districts of Linz, Steyr and Wels, while they remained constant in the districts of Freistadt, Grieskirchen and Ried im Innkreis.

3650 euros per square meter single-family home
In the second quarter of 2024, one square meter of a single-family home cost EUR 3650. Apartments became 5.9% cheaper on average in Upper Austria, with prices falling the most in Steyr.