The View from Vienna
Austria has set out plans to become one of the first countries in Europe to ease its lockdown against the coronavirus pandemic, with small shops and DIY stores due to reopen from 14 April.
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I spoke to Richard Buxbaum of Otto Immobilien (R), our partners in Austria and Knight Frank’s Head of Austria sales, Alex Koch de Gooreynd (A), to understand what impact Covid-19 has had on Austria’s property market and to gain their perspective on the shape of the recovery ahead.
What impact has Covid-19 had in Austria?
R: Austria has seen some 12,881 cases as of 8 April, with 14% of these in Vienna and cases are deemed to have peaked on 26 March.
What support has the Austrian government provided to households and businesses?
R: The Austrian government was one of the first European authorities to react imposing a lockdown on 16 March. Strict enforcement of quarantine measures saw the use of large police fines, which saw mobility levels drop significantly.
Austria has one of the highest numbers of intensive care beds per capita in Europe, and this combined with well-resourced medical centres have proved relatively successful in limiting the impact of the virus over the last month.
How did the real estate market adapt?
R: Throughout the crisis, buyers and sellers were able to transact. Some notaries remained open, and working to social distancing rules, sales were completed. Some removal services were also operational.
What is the outlook for Vienna’s prime property market?
R: I expect sales volumes to recover quite quickly in the third quarter of 2020, mirroring the trend we saw post-2008, and prices will remain largely resilient. Vienna’s credentials as a safe haven will strengthen; it is already recognised as a centre of wellbeing, ranked fourth in Knight Frank’s new City Wellbeing Index.
I expect domestic buyers will drive the initial upturn in activity with international buyers returning once travel restrictions ease and confidence returns. Some 80% of the prime residential market in Vienna is domestic-driven.
A: Unlike in previous years I think the seasonal downturn that we witness every August across Europe may not happen in 2020 as economies look to recover lost ground.
How different will the Austrian real estate market be after the crisis?
R: Online viewings whether drone videos or interactive 3D videos have existed for a while but I think they will become a standard offering for most agents. Online property auctions will become commonplace in Austria, as they are in Australia and we will see demand for properties in the Austrian lakes and mountains strengthen as buyers seek out a rural retreats.
Europe is watching
Austria is not the only one tentatively lifting restrictions; Denmark and the Czech Republic have also announced plans to reopen nurseries after the Easter break and several European countries have set up taskforces and committees to schedule their exit strategies.
Although phased steps towards the normalising of life may be underway, months of softer controlling measures lie ahead.
Policymakers across Europe and the Americas will be watching Austria and Denmark closely as they try to marry economic pressures with public health concerns.