EXPLAINED: How Austria's new property buying rules could impact you
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- 27 Jan 2023
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Anyone buying property in Austria will now need a minimum deposit of 20 percent. Why has this new rule been introduced and how could it impact people trying to get on the property ladder?
From August 2022, anyone applying for a mortgage in Austria is subject to new rules related to equity and terms and conditions for loans.
The aim is to take some heat out of the property market in Austria, especially after both the Austrian National Bank (OeNB) and the European Council for Systemic Risks recently issued warnings that lending criteria was too lax, according to a report by ORF.
But for some, it will now mean home ownership will become an ever more distant dream as property prices, interest rates and the cost of living continue to rise.
Here's what you need to know.
READ MORE: EXPLAINED: Why Austria’s rising property prices are causing alarm
What has changed?
The biggest change to house buying rules in Austria is that there is now a mandatory deposit of 20 percent of the value of a property, including additional costs. Previously, banks were simply issued with recommendations about a minimum deposit.
As a result, the OeNB expects a "dampening effect" on the number of home loans being granted in Austria, followed by a drop in property prices in the coming years.
However, in an interview with Der Standard, Willibald Cernko, the new head of Erste Group, called for exceptions for young families who are particularly impacted by the new lending criteria. Read More…
