Austrian home prices fell for a third consecutive quarter, led by declines in existing apartments in Vienna as the once-hot property market adjusts to higher interest rates.
(Bloomberg) — Austrian home prices fell for a third consecutive quarter, led by declines in existing apartments in Vienna as the once-hot property market adjusts to higher interest rates.
The pace of Austria’s depreciation in residential real estate slowed to 0.2% in the second quarter, with the total drop since September adding up to 2.6%, according to data from the Austrian National Bank.
Prices for existing apartments in Vienna slumped 6% over the past year.
In the second quarter, detached homes and new apartments in the capital emerged as a bright spot, and new apartments outside Austria’s biggest city also recorded increases.
Vienna is more likely to face a slow correction to its overvalued housing market than a sudden shock, according to a June report from Austria’s central bank.
A more volatile measure tracking listing prices in the capital showed steep declines in excess of 10% in April, but has since paired most of that drop.
Read More: Vienna’s Overpriced Property Market May Take Years to Cool Off
While largely tracking the fall in property prices across most of Europe, stricter mortgage rules introduced in Austria last year contributed to a swifter pace of correction after years of appreciation.
Even so, Austrian flats are still about a third more expensive than economic fundamentals would imply, according to central bank calculations.
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