Wienerberger's 2025 Revenue Falls Short as Austria's Housing Market Fumbles

Wienerberger's 2025 Revenue Misses Analyst Expectations

Austrian building materials giant Wienerberger reported a disappointing fiscal year 2025, with revenue failing to meet analyst projections due to a struggling new residential housing market. The company's performance highlights a broader contraction within Austria's housing sector, marked by a 17.3% decrease in residential construction starts in 2024. As economic challenges mount, a projected shortage of approximately 7,700 apartments in 2025 only exacerbates the situation. This revenue miss underscores the persistent supply shortages and dwindling demand that have impacted key players across Austria's real estate supply chain.

Residential Construction Starts Fall by 17.3% in 2024

The downturn in Austria’s residential construction sector has been significant. In 2024, new residential construction starts plummeted by 17.3%, reflecting a sector under pressure. This decline can be partly attributed to economic uncertainties and rising building costs. According to Kroy Immobilien, the Vienna real estate market is only starting to stabilize after a slump between 2023 and 2024. With fewer new projects, the market's ability to meet housing demand continues to weaken, setting the stage for an intensified shortage of residential units in the coming years.

Investment in Austrian Real Estate Sees a 14.6% Increase

While construction starts have declined, the overall transaction value in Austria's real estate market has seen a positive trend. As reported by International Investment, the first half of 2025 witnessed a 14.6% increase in transaction value, reaching €15.32 billion. Vienna contributed significantly, with €4.19 billion in turnover, suggesting that while new constructions are down, existing properties are experiencing heightened investor interest. This dynamic underscores a shift in focus from new builds to existing properties as investors seek opportunities in a challenging market.

Vienna's real estate turnover reaches €4.19 billion in first half of 2025.

Vienna's Real Estate Market Faces Low Supply and Rising Rents

Vienna, Austria's capital, is experiencing a notable shortage of new rental apartments. Only about 1,800 new rental units are expected to be completed in 2025, representing a nearly 60% decrease from 2024, according to Vigoimmobilien. With such limited supply, rents have risen significantly, by an average of 6.2% to 7.7% in 2024, and this trend is expected to continue. This scenario puts pressure on renters and could drive investment interest toward rental properties, given their potential for higher yields in a tight market.

ECB Interest Rate Cuts Boost Buyer Activity

The European Central Bank's decision to lower interest rates multiple times in 2024 has had a positive impact on buyer activity, despite the broader market challenges. As noted by Vigoimmobilien, the average interest rate on loans in Austria reached 3% annually by the end of 2024. This reduction has encouraged more buyers to enter the market, particularly for existing properties, though the high borrowing costs remain a barrier for some. The decrease in interest rates is pivotal for stimulating sales in a stagnating market.

Investment Apartments: Rising Prices Amid Falling Sales

The investment apartment market is experiencing a complex dynamic. According to the EHL Market Report, sales of investment apartments dropped from 839 units in 2023 to 452 in 2024. Despite the decline in sales volume, the average net purchase price rose by 5.6%, from €4,903 per square meter to €5,174. This increase suggests a strong demand for remaining units, reflecting investor confidence in the long-term stability and profitability of the sector, even amidst current challenges.

Future Implications and Strategic Insights for Investors

Looking ahead, the Austrian real estate market presents a mixed bag of challenges and opportunities. The anticipated apartment shortage and continued low construction starts suggest that supply will be a key issue. For investors, this indicates potential opportunities in existing residential properties and rental markets. Strategic targeting of high-demand areas, coupled with a focus on properties that can yield strong rental returns, may prove advantageous. As Maya Tarek, Senior Analyst at RealEstateAbroad.com, suggests, "Investors should focus on regions with robust transaction activity and rising rents, potentially offsetting the challenges posed by limited new builds."

• Focus on existing properties with strong rental potential
• Monitor ECB rate policies for potential market shifts
• Consider investing in high-transaction regions like Vienna