12.05.2016
 

2016 housing study: housing barely affordable anymore for young people

  • 56% of Austrians live in their own home
  • College students are “nest squatters”: 59% are staying with their parents
  • Fixed interest loans currently cheaper than ever before

Rising real estate prices and rents are creating difficulties for Austrians: more than half of all college students cannot afford to stay in a place of their own, among young adults overall, this applies to 23%. How does the rest of Austrians live and what are their dreams with respect to housing? How do they want to finance their dream home? Erste Bank and s-Bausparkasse have looked into these questions and are presenting a representative study by Integral:

Desire for home ownership

Living in one's own home remains the most popular form of housing in Austria: 56% are stating that they are living on premises of their own. 41% of Austrians own a house and 14% a condominium. 4 out of 10 respondents (44%) state that they are renting their accommodation, with the federal capital standing out with renters representing an 82% share. By contrast, Lower Austria's 71% has a conspicuously high share of single and multifamily homes.

The average living space of Austrians has also increased compared to 2010. Austrians currently live in an average living space of 116 m² (+4 m²). However, there are are regional differences with respect to this as well: as a result of the relatively high density of single family homes in Lower Austria, the average living space there amounts to 141 m², while in Vienna the average stands at 81 m².

 

More than half of all college students are staying with their parents

Josef Schmidinger, © Erste Bank, Daniel Hinterramskogler

83% are satisfied with their current housing situation. Every third Austrian is living with his or her family, slightly more, namely 35% with their partner and 21% are living alone. The number of young adults living with their parents has increased dramatically. 59% of students cannot afford a place of their own; this is more than 50% above 2010 levels. Among young adults overall, this applies to 23%. It is therefore not surprising that in this age group specifically, many are planning to move soon: 77% of students and 52% of young adults (18 to 39 years of age) want to move out within the next 5 years.

Where do young Austrians want to move to? Rental apartments are the most popular form of housing among students with 42%, a condominium is only considered by 18%. While home ownership is only of interest to 17% of students, 3 out of 10 young adults are taking this form of housing into consideration (34%), with almost one quarter wishing to stay in a rental apartment (21%). “Austria's population is attaching great importance to housing. Particularly young people want their accommodation to be tailored individually and adapted to their needs”, says Josef Schmiedinger, chairman of Bausparkasse der Oesterreichischen Sparkassen AG.

 

Financing one's dream home

Thomas Schaufler, ©Erste Bank, Daniel Hinterramskogler

In order to finance their dream home, 35% of respondents are able to fall back on their own savings, another 8% are helped out with family savings. As these own funds rarely suffice, additional capital is often needed. 36% of Austrians want to take out a loan for this purpose. The most popular form of financing the costs of new housing is the building society loan for 61%, while 57% are interested in a residential mortgage loan (multiple answers possible).

“We are strongly focused on fixed interest loans with long maturities in order to make monthly repayments calculable in advance, enabling one to rest easy for many years”, states Thomas Schaufler, chief retail officer of Erste Bank Oesterreich.


Need for security

What do Austrians require from their bank in the context of housing? Apart from favorable conditions (89%) and a good price-performance ratio (88%), primarily secure financing (87%) and competent advice from their personal advisor (77%) are expected. Customers tend to be quite well informed nowadays by the time they pay a visit to their bank branch office. Thus 64% are making use of online platforms to inform themselves about financing options ahead of an appointment.


Property registry replaces savings book

92% of respondents see real estate as a value-preserving asset and as a good investment option, particularly in a low interest rate environment (88%). 8 out of 10 moreover state that they would rather be making mortgage payments than paying rent. Property is the best form of retirement provision. Property ownership lowers the cost of housing and as a result creates more leeway in terms of disposable income in later years. “I strongly recommend taking advantage of the current opportunity to obtain a fixed rate loan at low interest rates. Particularly in the case of long term loans one should keep in mind that interest rates and with them monthly payments can rise again as well”, Schaufler adds.

About the study:
In an online survey conducted between 17. March and 07. April 2016, information on the housing situation of Austrians in the age group 18 to 69 years was compiled, along with their wishes and needs with respect to changing it. Based on demographic data, respondents were assigned to five different stages of life in order to define typical housing-related behaviour: students (18-29 years of age), young adults without children (20-39 years), established adults without children (40-59 years), families (20-59 years with children living in the household) and seniors (60 – 69 years). Overall, 1,749 persons took part in the survey. As a result there is now a thorough study of the housing situation based on the statements of individuals, which complements the micro-census surveys of Statistics Austria with personal perspectives.