Investment Property

Why Invest in Property?

  • Property returns (capital appreciation plus rental income) outperform financial products such as equities or bonds in the long term (source: French National Office of Statistics, Professor Shiller "Irrational Exhuberance", Professor Rogoff "This time is different").
  • Property is particularly effective as a hedge against inflation.
  • Property prices are less volatile than shares (equity) prices.
  • Property is a safe haven - prices in most of the major world cities as well as storn economies in Eurozone have continued to increase strongly through the financial crisis.

Austrian Property - A Strong Investment Asset

  • Austria has a stable, growing economy with some of the lowest unemployment in Europe.
  • Austrian economy has strong links to that of Germany and healthy countries of CEE.
  • Very low levels of private (as well as government and corporate) debt compared to the rest of the developed world.
  • Below average increase in house prices in the last two decades compared to the developer world.
  • Austria property remains cheap compared to that of most of Western Europe.
  • Tourism is one of strongest and growing sectors of the economy.
  • The building of second home investment developments in Austrian ski resorts is restricted to prevent creation of "ghost towns" on the slopes known from France.
  • The demand for holiday property is higher than the supply and prices and rentals continue to grow.
  • Typical annual net rental yields of Austrian holiday apartments and chalets are 5-7%. And that does not include property price appreciation!
  • The investment is "hands off", with no need, but an option for own use of the property
  • Up to 50-60% of the investment could be financed by a low interest rate mortgage (2% in 2015)

Austrian Investment Property Returns Example

Typical Austrian Rental Apartment Annual Yield Calculation

Conservative scenario:

Notes:

1. , 4. - Net VAT - VAT is claimed back at purchase and must be paid from rental income 

2. Stamp duty, land registry fee, agency commission, notary fee

4. Based in 20 weeks (winter and summer high season) full occupancyat average price 1500 EUR+ VAT. No occupancy in 32 weeks of low season. - Conservative scenario.

5. Usually ranges from 18 - 30%

6., 7. Typical values

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