• Europe: Housing costs “eat” between 20% and 41% of the consumption expenditure of the under-30s
  • Dream of owning your own home: domestic credit growth twice as strong as in the euro zone
  • ”BAWAG P.S.K. Kredittausch-Wochen”: better conditions on existing third-party bank loans or 250 € in cash

VIENNA, Austria - August 27, 2019 – As a recent analysis by BAWAG P.S.K. of 27 European countries shows, under-30s spend on average about one third of their consumer spending on housing. Austria's young adults are above average and need 36% to cover these expenses - and the trend is rising. "Here in Austria, the share of young adults' consumption expenditure on housing is growing steadily - compared to 1994, it has risen by about 23%. It is difficult to predict how rents will develop in the next 15 years, but the level of credit rates is," explains Markus Gremmel, Head of Marketing and Products at BAWAG P.S.K..

Europe: Consumer spending on housing at the forefront

According to Statistik Austria, the median annual income of the 20-29 year old employed persons in Austria in 2017 amounted to about € 19,530 gross, which is about € 1,400 gross per month (payout 14 times per year). If one takes a look at the structure of consumer spending, according to the latest data available from Eurostat, the under-30s in Austria spend around 36% of it on housing - in 1994 this figure was still around 29%. These include rent, expenditure on condominiums, maintenance and repair, as well as operating costs and costs for water, electricity and heating. These costs therefore still make up the largest part of fixed expenditure. Austria is above the European average, which is 33%. In Luxembourg it is even 41%, while young adults in Malta live more cheaply: on average they spend only 20% of their available funds on it.

Austria: Net rents rise faster than operating costs

"If you want to set the course for a higher standard of living at an early stage, you should reduce the biggest cost driver in Europe - the cost of housing - at an early stage. In the long term, the purchase of property pays off. Although the initial burden for freshly baked homeowners is higher, in the longer term the monthly burden decreases - in contrast to tenant households," explains Gremmel. Net rents and operating costs differ not only in absolute terms, but also in terms of long-term development: according to Statistics Austria, the average net rent (excluding BK) in Austria in 2009 was € 4.20 per square metre, whereas in 2018 it was € 5.80 - an increase of 38% overall. By contrast, operating costs have developed more moderately - from € 1.70 per square metre in 2009 to € 2.10 per square metre in 2018, a comparatively small increase of around 24% overall.

Austria: More dynamic development in residential mortgages than in the euro zone, albeit low home ownership rate

A look at the development of the housing loan portfolio of private households between December 2008 and December 2018 reveals a more dynamic development in Austria than in the euro zone: In a 10-year comparison, the housing loan portfolio in Austria has increased by 58%, from € 69.8 billion to € 110.5 billion in absolute figures - this is shown by figures from the ECB/OeNB. On the other hand, the housing loan portfolio in the euro area as a whole has "only" grown by 25% in recent years, from € 3,491.1 billion to € 4,358.6 billion. "The general debt-equity ratio of private households in Austria is still below average compared to the euro zone, as is the home ownership ratio. We therefore regard the trend towards more home ownership and credit growth in this area in Austria as healthy and sustainable and expect this trend to continue in the coming years. The underlying developments, such as low interest rates, a growing population and increasing urbanisation, continue to support these trends," explains Ingo Jungwirth, economist at BAWAG P.S.K.

Home ownership as a feel-good factor

BAWAG P.S.K. currently offers a variety of options for securing the currently low interest rate level for housing loans for its customers and for spending lower costs on housing in the long term compared to rents. As part of its financing offensive, BAWAG P.S.K. is currently offering mortgage loans with variable interest rates starting at 0.75% p.a. For security-conscious customers, BAWAG P.S.K. recommends agreeing a fixed interest rate in order to be able to repay consistently high monthly installments. Many customers also opt for longer fixed interest periods over 10 or 15 years with interest rates starting at 1.375% p.a. and 1.625% p.a. respectively. The timing for a fixed interest rate agreement is currently favourable. In addition, customers can apply for grace periods - for example, during the house construction phase or renovation - in order to avoid a double burden on the credit rate and current rent payment. BAWAG P.S.K. currently offers mortgage loans with a term of up to 35 years. "Anyone who is 30 years old today has on average a very good chance of becoming older than 81 - and of having paid off their home well before retirement," said Gremmel

BAWAG P.S.K. generally advises its customers and their families to optimize their financial situation in a personal consultation with their branch advisors. This also includes evaluating existing loans. Young people, in particular, are used to comparing prices when booking travel, flights or hotels in order to keep the total cost of their holiday as low as possible. That one can change also after the conclusion of a housing loan, is well-known only few. BAWAG P.S.K. offers customers who have taken out a loan with an external bank the opportunity to take a closer look at existing loan conditions as part of the "Loan Exchange Weeks". If it is not possible to offer better conditions for the loan at an external bank during the consultation, BAWAG P.S.K. will transfer € 250 for the mortgage loan to the customer's current account in the following month. The loan exchange offer applies to housing loans secured by mortgages of EUR 80,000 or more with flexible maturities. "We help our customers not only to optimise the financing itself, but also to optimise subsidies and hedging measures - here, too, costs can be saved in the short and long term," concludes Gremmel.


Manfred Rapolter (Head of Communications, Spokesperson)
Tel: +43 (0) 5 99 05-31210

Henriette Mußnig
(Press Officer) 
Tel: +43 (0) 5 99 05-32086

Doris Unterrainer
(Communications Specialist)
Tel: +43 (0) 5 99 05-32084

Press release (PDF)