Is Austria In A Real Estate Bubble? Could This Bubble Burst In 2021?
Real estate investments are in very high demand both in times of economic uncertainty and during stable economic growth…
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- Sell Guide – Property Sale
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- July 13, 2021
- Posted by: 4m
So-called bubbles arise when markets overheat. In this process, real estate prices rise disproportionately fast and sharply compared to other economic factors. At the same time, falling interest rates strengthen purchasing power. Over the last 10 years, house prices in Austria have risen by more than 5% per year, which was significantly above the European average. What is alarming, however, is that banks are taking on too much risk when granting loans. Low equity contributions and loan terms of over 40 years are no longer uncommon. This is precisely why the Financial Market Stability Board has pointed out that a real estate bubble, once it bursts, can also drag the banking sector down with it.
- Too 'favourable' financing conditions
- Speculative buying behaviour
- Population growth
- Insufficient construction activity
- Real estate prices can fall rapidly
- Construction projects may in some cases not be completed
- Over-indebtedness of private individuals and investors
- Economic and banking crisis
Experts, however, continue to believe that there is currently little reason for alarm. Additional far-reaching factors would be needed to bring down the real estate market. Only if the unemployment rate were to rise so drastically that a large proportion of borrowers could no longer afford their properties would there be reason to panic. For now, however, there are no real indications of this.
Rating agencies also view Austria as less vulnerable. Household debt is low by European standards and is more likely to be found among above-average-income households. Investors and private individuals alike will therefore continue to buy apartments, houses and plots of land, thereby investing in bricks and mortar – which suggests that we will not be seeing a bubble burst any time soon.
REGARDLESS OF THE TYPE OF PROPERTY, REGARDLESS OF WHETHER IT IS VIENNA OR THE SURROUNDING AREA – YOUR 4M REAL ESTATE AGENT WORKS FOR YOU, AND YOU CAN ONLY BENEFIT FROM IT!
For further questions and information, please feel free to contact me at any time!
Ivan Lovrinovic [email protected] +43 660 230 2309 About us
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