Austria Real Estate Market Outlook 2026

The Austrian economy has come out of a two-year recession and is showing signs of recovery, characterised by an increase in consumption and exports, while the inflation rate is gradually declining from its still elevated level and labour market dynamics remain stable.

Market dynamics in the investment market have returned to pre-crisis levels. Institutional investors are returning, as are international buyers. Prime yields are expected to continue falling in 2026.

With completion figures low and continuing to decline, conditions in the residential market remain extremely tight. As there is currently no sign of a trend reversal, rents will continue to rise at a comparatively high level in 2026.

After another year of subdued demand in the logistics market, developers have also responded to the current market situation and are increasingly focusing on pre-letting figures before bringing new projects into construction. This will result in a correspondingly volatile completion pipeline for 2026.

The Vienna office market has had a strong year in terms of leasing thanks to several major deals. The vacancy rate has risen slightly, and the project pipeline for 2026 has already been significantly reduced. Office rents continue to rise, especially in prime locations.

Sales in the retail sector saw stronger growth again in 2025, but inflation and high savings rates remain major challenges. Nevertheless, many brands will continue to expand into Austria in 2026, looking in particular for space on high streets and in successful shopping centres.

In Vienna, the hotel market saw strong momentum in 2025, driven by record overnight stays and growing investor interest. However, the challenges for operators remain high, and good concepts are required.

Vienna is one of the smaller Tier II markets for data centres in Europe but has gained in importance in recent years. The current installed capacity is around 53 MW, more than double that of 2016. Microsoft has three locations in operation in 2025.