AUSTRIA Law and Practice Contributed by: Christoph Urbanek, Irena Gogl-Hassanin and Mario Schiavon, Urbanek Law
1. General 1.1 Main Sources of Law In Vienna, the main sources of real estate law are as follows. • Austrian Civil Code (ABGB – Allgemeines Bürgerliches Gesetzbuch ) – the primary source of private law in Austria, including real estate transactions. The ABGB governs con - tracts, property rights and land ownership. It sets out rules for the transfer of property, leases and other real estate matters. • Land Register Act (GBG – • Grundbuchgesetz ) – regulates the Austrian land register, a central tool for recording prop - erty ownership, liens and other rights related to real estate. It is crucial for ensuring the clarity and security of property transactions in Austria. • Austrian Tenancy Act (MRG – Mietrechtsge - setz ) – regulates the relationship between landlords and tenants in Austria. It covers rent control, tenant protection, notice periods, and the rights and obligations of both parties regarding maintenance and repairs of rental properties. In Vienna, the MRG plays a central role in tenant protection and in setting the conditions for lease agreements. 1.2 Main Market Trends and Deals Market Trends Price adjustments Residential property prices in Vienna have seen a decline. In Q4 2024, house prices decreased by 2.08% year-on-year, marking the seventh consecutive quarter of price falls – the longest streak since the 2000s. Increased rental demand The influx of new residents has sustained high demand for rental properties across all dis -
tricts. Since 2016, apartment prices have risen by approximately 22.5%, maintaining Vienna’s position as the Austrian federal state with the highest average property prices. Impact of Inflation and Interest Rates High inflation and stricter lending guidelines have led to reduced purchasing power and financing challenges for potential buyers. This environment has resulted in a slight decline in the transaction volume of real estate purchases by 0.7%, amounting to EUR24.1 billion. This fig - ure contrasts with EUR43 billion during the real estate boom in 2021, highlighting the market’s cooling effect under current economic condi - tions. Adaptations to Emerging Trends Technological innovations The real estate sector is increasingly embrac - ing technological advancements such as block - chain, decentralised finance (DeFi) and property technology (PropTech). These innovations are being integrated to enhance transaction trans - parency, streamline processes and introduce new financing models. However, the extent of their adoption varies, and stakeholders are navigating regulatory and operational challenges There is a growing trend of converting com - mercial office spaces into residential units. This adaptation addresses the evolving needs of the population and optimises urban space utilisa - tion. The success of such projects depends on factors like location, design and alignment with urban development plans. Financing trends Traditional bank financing remains prevalent, but alternative financing sources are gaining associated with these technologies. Repurposing commercial spaces
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