Vienna expected to miss thousands of planned homes

Vienna is expected to complete only 9,600 of the 12,600 homes planned for 2026, ORF reported, as demand continues to exceed the supply of affordable housing.

Michael Pisecky, head of the real estate and asset trustees’ division at the Vienna Chamber of Commerce, said the final figure could be as low as 8,000 homes. That would leave at least one in four planned homes unbuilt in an already strained market.

Pisecky said reliable legal rules, particularly on tenancy law, sufficient financing on affordable terms and greater planning certainty were needed to address the imbalance. He was speaking at a press event organised by Pro Bauen & Sanieren, an initiative founded in 2013 by industry organisations.

Construction faces multiple obstacles

Higher interest rates, rising costs, regulatory barriers and a lack of planning certainty are holding back Austria’s construction and real estate industries, according to the organisers. Construction contracted for four consecutive years from 2022 to 2025, with a particularly sharp decline of 5.9 percent in 2024.

The current year is not expected to bring a turnaround. The Austrian Institute of Economic Research revised its forecast for 2026 in June from growth of 0.1 percent to a contraction of 0.2 percent. Construction investment is not expected to grow again until 2027, when it is forecast to rise by 1 percent.

The organisers said public authorities had contributed to the slowdown by stopping or postponing numerous projects as part of budget consolidation.

Industry calls for investment and renovation

Georg Bursik, chairman of the research association for Austria’s building materials industry and Austria head of building materials manufacturer Baumit, said appropriate regulatory measures could unlock growth and development potential in the construction and real estate sectors.

Alongside new construction and the more intensive use of existing sites, Bursik identified the renovation of existing buildings as an important lever. Building renovation generates a total of 5.5 billion euros in gross value added each year, according to the organisers.

However, the large need for renovation in Austria is being held back by a lack of planning certainty and bureaucratic barriers, which are discouraging private investment. Bursik called for a regulatory and funding system that was predictable, financially viable, socially workable and legally practical.

Small and medium-sized companies form the backbone of Austria’s construction industry, said Andreas Fetter, vice-president of the Association of Building Materials Dealers in Austria. About one quarter of employees work for companies with fewer than 10 people, he said, adding that these businesses were particularly vulnerable to economic fluctuations.

Billions in additional investment needed

A return to the level of completed construction seen in 2021 and 2022 would require additional annual investment of 7.8 billion euros, according to a study by the Institute for Austria’s Economy, a non-university research institute. The investment could generate an additional 4.6 billion euros in gross value added across Austria, the study said.