Vorarlberg construction sector faces sharp rise in insolvencies

Vorarlberg’s construction industry is facing difficult times, with insolvencies doubling year on year and 22 cases recorded in the sector during the first half of 2026, ORF reported. Strict rules for housing loans and the weak economic situation are adding to the pressure.

Two companies from the construction and property sectors recently became insolvent with debts of 11.3 million euros and 15 million euros respectively. A business owner has also filed for personal insolvency.

The Credit Protection Association of 1870 said the cases were linked through company relationships. “All insolvency proceedings opened in the property sector within one week came from the circle around Mario Kmenta,” said Nathaniel Heinritz, head of the association’s local office.

The construction and property market is generally performing poorly, with the sector recording the most insolvencies in Vorarlberg. The Credit Protection Association expects the trend to continue into the third quarter.

Some creditors may struggle to recover their money during insolvency proceedings, lawyer Lukas Pfefferkorn said. This applies not only to private individuals but also to tradespeople and other companies that have provided services for property projects.

Unlike banks, these creditors often do not have mortgages or other security over the properties. They therefore receive payment only after the bank, leaving little money available in many cases.

Property agents are cautiously optimistic despite the difficulties in construction. Sales were about 20 percent higher than a year earlier, property entrepreneur Philipp Feurstein said. However, he described the market as challenging and said it remained a buyer’s market, with more properties available than buyers.

Pfefferkorn advised potential buyers to check the seller’s background and seek advice on applicable rules, including the Property Developer Contract Act. Instalments should be paid to the developer only after appropriate confirmation of construction progress, he said, and buyers should actively monitor the process.