The right time to invest is now

Falling purchase prices, the ECB's key interest rate cuts at the beginning of June and growing demand for residential space: as announced, 2024 promises to be a good year for investments in investment property. We have compiled the four most important arguments for you that show why buying a residential or commercial property is promising right now.

Find out more here - plus a tip for investment beginners at the end of the text.

Favourable purchase prices

The past two years have been characterised by key interest rate hikes and inflation. At the same time, transaction figures on the investment property market declined and purchase prices fell. Investment properties, in particular residential and commercial properties, are currently being offered on the market at significantly lower prices than in 2020 or 2021. Purchase price factors fell sharply, particularly in Austria's larger cities. The properties are often developable properties that offer high potential returns.

More favourable loans

The reduction in the base rate is expected to result in more favourable loans and an increased supply of money. This will also make it easier and cheaper to obtain and service a property loan. Lower building interest rates make construction financing more affordable, which means that more people will once again be able to afford to buy a property.

Stable cash flow

In Austria's major cities, there is currently significantly higher demand from investors in the residential property sector, combined with an increasingly positive market assessment compared to the previous year. The reason for this is the foreseeable massive excess demand for rental flats in the coming years, particularly in the conurbations. In Vienna, for example, the prime yields for new-build residential property were 4.10% in the city centre and 4.50% in the outer districts, resulting in excellent lettability of the properties and a correspondingly stable cash flow for investors.  

Positive value development

Anyone who acquires an existing building that is capable of development will inevitably also invest in its refurbishment in view of the German Building Energy Act (GEG). The costs for a comprehensive core refurbishment generally amount to between 800 and 1,200 euros per square metre. In many cases, the refurbishment costs eat up the savings from the more favourable purchase price. However, investors will end up with a property that has excellent energy efficiency and is fit for the future. It is inexpensive and climate-friendly to manage, complies with legal requirements and enjoys positive value growth.

Tip: Opportunities for investment newcomers

For a long time, the investment property market was dominated by professional investors. Residential and commercial properties were in high demand and usually sold before they could be offered to the public. This has changed over the past two years: Professionals also have to make greater efforts to obtain financing and are taking more time to decide on a property. The longer marketing periods are now also opening up good opportunities for private investors and newcomers to find interesting investment properties.