How do rental prices change in Austria?

Renting a property, few people think about the fact that the cost of rent may increase in the future for a number of reasons. That is why in this article we would like to explain when and how rent prices can change and how to protect yourself from disproportionate rent increases.

To begin with, the Austrian Ministry of Justice determines the recommended rental rates (Richtwertmiete) on 1 April – once a year/every few years (depending on inflation and other economic factors).

The Richtwertsystem was introduced in 1994. This system sets recommended rates per m2 of rented housing for the different federal states of Austria.

Recently, the Richtwertmiete in Austria have changed twice – on 1 April 2022 and 1 April 2023. In this table, which is taken from the WKO report of 23 March 2023, you can see the recommended cost per 1m2 of housing in different regions of Austria.

It is important to understand that base rents do not include additional costs such as heating, water, electricity, building maintenance, etc. Therefore, the final rent is usually higher than the recommended rate.

As an example, we can cite the cost of 1m2 of a rented apartment in Vienna. Starting from 1 April 2023, the rental rate recommended by the Ministry of Justice is EUR 6.67/m2. However, in fact (according to the statistical website immopreise.at), in August 2023, the average price per 1m2 of rented apartments in Vienna ranged from EUR 15.87/m2 in the cheapest Ottakring district to EUR 22.31/m2 in the most expensive Innere Stadt. That is why the recommended rate is only a rough guide to the real estate market.

There are special rent calculators (Indexrechner) to determine the approximate base rate for the apartment you want to rent or lease. For example, in Vienna, you can check the basic rental rate on the official website of Stadt Wien or other private websites.

The amount of rent is influenced not only by the amount of rents recommended by the state, but also by other factors. These include, in particular:

• indexation;
• market conditions
• contractual terms and conditions;
• housing improvements.

As far as indexation is concerned, it is mostly related to the state-recommended base rates and inflation conditions. This means that rents can be automatically adjusted in line with the consumer price index (inflation).

Inflation-based rent increases can occur at different rates depending on the terms of the contract:

• Automatic indexation – some lease contracts have automatic indexation based on the consumer price index. In this case, the increase may occur annually.
• Fixed period – some contracts may specify that rents can be reviewed and increased, for example, every 2, 3 or 5 years based on inflation.
• No indexation – there are also contracts that do not provide for automatic rent increases based on inflation.

Market conditions are an equally important factor in the increase in rental prices. Depending on the region, supply and demand, rental prices may increase. In Vienna, for example, there is a continuously high demand for housing, which is why prices rise in proportion to demand.

The contract may specify the terms and frequency of rent reviews. For example, the tenant and the landlord may agree that the rent will be lower for the first 3 months, and that the rent will automatically increase from the 4th month of the lease.

If the landlord makes repairs, purchases new appliances or makes other changes that improve the living conditions, he or she may ask for a rent increase.

In view of the above, we advise you not only to be careful when choosing a property, but also to take into account other factors, such as the economic situation in the country and the world, which may lead to inflation, statistical information on the real estate market and the terms of the lease agreement. To avoid unnecessary misunderstandings, you can always contact VigoImmobilien real estate agency. We are happy to help you!