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January 22, 2019



As with cities in Italy next door, there is little persuasion required to visit the Austrian capital, replete as it is with awe-inspiring architecture developed over centuries, innumerable parks and first-rate inner city transport.


But the country’s fundamentals are stronger. Unemployment levels are low and population numbers are stable. Annual gross domestic product growth is at its highest level since 2011 (2.6 per cent in 2017 - OeNB and other sources), but its quarterly growth in 2018 in particular has really demonstrated its recent acceleration.


This is reflected in property prices. Austria real estate overall has risen between 4.1 per cent and 7.3 per cent, year on year, between 2015 and 2017, yet it was the quarterly growth during 2018 (up 8 per cent in Q3) that has pulled the country into ‘hot market’ territory.


Vienna property has risen - while up 6.5 per cent overall in Q3 just gone, it includes an 8.3 per cent rise in the same period in secondary market condominiums (6.6 per cent up for condos overall). Considering growth was near flat at the tail end of 2017, this is remarkable. 


Indeed, brokers told media in 2018 that while the 18th and 19th districts - the top end of mansion renovations and villas - have held up, newer areas such as the 17th district have also gained traction. Buyers are also looking further out, providing good transport links.


Numbeo, the data aggregator, found that city centre rental averages of EUR 840 per month, comparing to EUR 640 outside the city centre. Purchasing prices comparing city centre to outskirts has a sharper differential: around EUR 6,340 per square metre in the city compared to EUR 3,840-ish outside.








Kyoto is a curious example of how government can give with one hand and take with the other. The powers that be in Tokyo have spent heavily on tourism campaigns internationally in the run up to this year’s rugby World Cup and next year’s Olympics - around 28.7 million people visited the country in 2017, a record.


The ancient city down south has been busy with its own charm offensive. 


Tourists have flocked to the former Japanese capital, using short term accommodation sites such as AirBnB. But a backlash among locals saw Kyoto crack down by requiring owners to register with the government before using such online tools - the so-called Minpaku law. By September 2018, two lettings companies of this kind had fallen foul.


The move is curious since its was a just a few years ago that drawing more tourists was a serious challenge. It also comes as more young people have been forced out of the city following steep increases in property. Prices are between 20 and 50 per cent higher in Kyoto than in 10- surrounding cities, data from The Kyoto Shimbun found.


The priority towards hotel construction has also reduced plots available for residences, which has also helped increase prices. Curtails to the holiday let market might arguably make it even more difficult for first time buyers if current investors need to buy a second property to rent out long term, in the absence of the return from short term lettings.


Development has also threatened the future of the traditional kyomachiya houses. Authorities claim they are difficult maintain and, being constructed of wood, a fire hazard. Other would argue a slice of the past - ironically, popular with tourists - is being lost.









This year could be the year of mainland Western European capitals when it comes to developed-market price appreciation, and the Spanish capital is particularly buoyant.


By the end of Q1 last year Madrid increased in overall prices by more than 21 per cent over the previous 12 months. Strong successive quarters thereafter - albeit at a lower overall growth rate - led Knight Frank to predict a further 6 per cent rise over 2019, to compete with the famously new-supply-poor Berlin as well as Paris. 


While the research firm pointed out that relatively weak economic growth and uncertainty from the Brexit may have an effect on the total number of new buyers in Madrid, the relative value of the city internationally will be a plus point. 


Property Hunter Madrid cited a couple of reasons why not only 21 per cent up isn’t a bubble, but why the price appreciation should keep growing in the short term. Prices in areas such as Salamanca and Chemberi are now higher than the 2008 crash, though this doesn’t indicate a peak, necessarily.


Instead, recent structural changes provide a more positive backdrop this time around. The inventory of secondary market stock is higher quality than before, with buyers willing to pay more. ITP, the main property tax, is just 6 per cent in the capital compared to rivals such as Barcelona, which is 10 per cent. General business taxes have been lowered and administration more streamlined. 


The city has also benefited from the uncertainty generated by the Catalan independence. Where the coastal city offered a best-of-both-worlds for holiday home buyers, Madrid represents stability, particularly for businesses. One could add that there’s room to grow still - Idealista figures show the average property is still 19 per cent behind Barcelona. 




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