Austrian construction industry and housing crisis

The Austrian construction industry is undergoing a prolonged crisis, marked by a 12 percent decline in real production since 2020. The sector, particularly residential construction, has faced significant contraction. Experts anticipate the industry may continue to shrink through 2026, with a potential turning point not expected until 2027.

Economic pressures, including a one-third increase in construction prices between 2020 and 2025, have been driven by material shortages, supply chain issues, and rising labor costs. While non-residential and civil engineering sectors have remained more stable, the residential sector saw a 30 percent real decline.

This downturn has led to a significant housing shortage. In 2025, housing construction reached a significant low, with 48,597 apartments completed, representing a 12.3 percent decrease from 2024. New builds saw the most pronounced decline, dropping roughly 20 percent to 34,217 units, marking the lowest number of new residential completions since records began in 2011. The remaining 14,380 units were created through the addition, expansion, or conversion of existing buildings.

Regional disparities exist: Vienna reported the highest number of completions with 11,081 units, while Styria and Carinthia recorded the lowest rates per capita. Building permits for new homes fell by 7.1 percent in 2025. Due to the multi-year gap between permits and completion, Statistik Austria Director General Manuela Lenk anticipates continued declines in completion numbers in the coming years. This trend coincides with a projected increase in private households, which could rise to 4.28 million by 2030.