The Austrian “Länder” spend some € 3,000 mill. per year for housing promotion. This is added with approx. € 300 mill. of other subsidies from the Federal State, e.g. for the “Bauspar”-scheme or for tax relieves of housing supply bonds. Almost half of housing subsidies of the “Länder” still is dedicated to the supply side in the multi-apartment sector, additional 11% are spent for the sector of detached houses. Strongly increasing are expenditures for housing refurbishments (28%) and for housing allowances (14%).
Despite of the very big share of subsidized housing on total housing construction, Austria spends “only” ca. 0.9% of GDP on housing subsidies. This is below the average of Western Europe. This is because State subsidies for a single dwelling are relatively low. It is e.g. in Vienna a low interest loan (1% interest rate) of around 600 €/m². This is an actual cash value of subsidies of approx. 20%.
Figure: Development of housing subsidies of all “Länder” (mill. €)
Source: BMF, Statistik Austriat, IIBW
Housing costs have to be distinguished from market prices. Housing costs describe the costs of all sitting tenants, market prices only the ones of new contracts. As in most countries, housing costs grow faster than overall inflation.
Following the EU Statistics on Incomes and Living Conditions (EU-SILC), household expenditure on housing (incl. energy) is with 17.4% significantly below EU average of 22.9. Even low income groups hardly spend more than 25% of incomes on housing. Some 5% of population suffers from housing cost overburden, which is defined with housing costs of more than 40% of the disposable household income. EU average is above 12%. Social quality of the settlements is high. There are no ghettos and relatively low segregation.