Vienna, 21 September 2021 – In 2021, the excess demand in the apartment building market will continue to lead to solid increases in values of residential and commercial buildings. However, according to Arnold Investments, prices in the very good and good locations have currently stabilised at a high level. Entry-level prices for local properties within the “Gürtel” (beltway), are currently starting at €4,000 to €5,000 per square metre.
"Private investors and foundations are increasingly venturing to look beyond Vienna," reports Markus Arnold, CEO at Arnold Investments. In particular focus are Graz and Linz, where in many cases the apartment house prices in the mid-level lcations begin at €3,000. But also dynamic growth cities with good transport connections to Vienna, such as St. Pölten and Wiener Neustadt, are increasing in interest due to the more favourable entry-level prices, which start at around €2,500/m2.
Income-oriented investors are currently looking for properties with optimisation potential in less central areas. Entry-level prices for apartment buildings in the outskirts - peripheral locations - are currently around €3,000/m² and upwards. "Despite the good demand, there should be no price corrections here in the near future," Arnold expects.
Multi-family residences with a property value of between €2 million and €5 million are also becoming increasingly popular. These "new" apartment buildings may generate far higher returns than their pre-1945 counterparts, as they are not subject to the Tenancy Law (MRG) or any other restrictions. These apartment buildings may well be located also in close-by neighboring countries.
"Anything that can be reached within a few hours by car is in demand," says the expert Arnold, who in addition to Vienna, also operates branches in another seven European cities - from Berlin to Lisbon. "Whether a property is located in Innsbruck or Prague, for example, sometimes makes little difference to investors."
Incidentally, entry-level prices in Prague are increasingly on their way to being similar to those of the mid-range locations in Austria. Investment properties for solely residential use are valued by banks with lower risk premiums, which is "similar in all our markets."
Increasingly, the value of a property is also influenced by sustainability criteria. "In the case of commercial real estate, the sustainability of a property is very much an important issue," explains Markus Arnold, whose second major focus alongside residential real estate is commercial investment.
According to Arnold Investments, the topic of sustainability - or ESG ( Environmental, Social and Governance) - will also increasingly affect residential real estate, as the climate targets of the Austrian federal government provide for an increase in the refurbishment rate from the current one percent to three percent. Gründerzeit buildings in particular - due to their good building materials and structure - could make a significant contribution to achieving these goals, as they are usually easy to refurbish and can therefore be developed into a sustainable building class. "The low income from old rental contracts or capped MRG rents could rather prevent instead of promote sustainable refurbishments," Markus Arnold says, making another strong argument for the urgent need for reform.
EXPO REAL: 04 - 06 October 2023
We look forward to welcoming you at the largest B2B real estate fair in Munich.
Selective targeted investments have already started
Q2 2023: Transaction volumes are still low. However, most attractive yields in years.
Viennese duo expands Residential
Julian Giesecke und Benjamin Grauss join the team as investment brokers.
Arnold Investments expands Hospitality
Sara Brenner and Pauline Vayrac join the team as investment brokers.
Zinshausmagazin: Third edition out now
Added Value, parification, different mentalities and many more.
EXPO REAL 2022: Strong fair with demand for productive dialogue
Inflation fuels demand for core products.
Three years of Arnold Investments in Germany
Trends, asset classes & importance of cross-border deals.
Dynamic upswing for commercial properties
After 6 months: Transaction volume of about 100 million EUR and 90,000 sqm of space brokered.
Alternative investments to residential real estate
Retail properties offer security
and attractive returns:
Investment from € 500,000.
Successful start into the New Year
Arnold Investments Italy acts as sell-side advisor for Immobiliare Industriale Srl (Saleri Group).
Apartment building: security in uncertain times
The coronavirus crisis has increased demand for real estate investments.