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Austria is 'new kid on the block' in property abroad

25 February 2008 / by Rachael Stiles
Austria is the next big thing when it comes to choosing a holiday home abroad, offering cheaper properties and an easier buying process than many of its continental counterparts.

The Austrian property market has been changing, according to Liz Rowlinson of the Daily Mail, as demand is causing the market to make a transition from holiday destination to second-home territory, making Austria the "new kid on the block" in the realm of Alpine homes.

While much of Europe has seen house prices rise considerably over recent years, Austria's market has remained relatively stagnant, Ms Rowlinson said, seeing a low number of homes changing hands each year. This is shifting however, as mortgages in Austria are becoming more easily available as a result of EU regulations, encouraging buyers from abroad.

Property prices in Austria are now rising at a rate of six to seven per cent a year, and investors can avoid the 50 per cent capital gains tax by owning the property for at least 10 years. Indeed, the BBC's A Place in the Sun found Austria to be in their top 20 best locations to buy in order to get the most positive returns.

There are still several restrictions on foreigners buying a second property in Austria however, for example owners must agree to make it available to rent through the local tourist office. Properties are priced relative to their proximity to various amenities and services available, such as the quality of local skiing if it is a mountain property, or the amount of rent which it is expected to generate.

British buyers looking for an alternative to snowy slopes and a continental climate are often drawn to the southern provinces, which offer lakes, forests, and mountains in more Mediterranean climes.

According to Austrian Chalets, an estate agent which specialises in Austrian property, Austria has one of the highest standards of living in the EU and one of the lowest crime rates, whilst ensuring "a stable home property market with many reasonably priced properties remaining within the budget of the UK investor."

An overseas mortgage is available from Austrian banks for up to 70 or 80 per cent of the property value, at an average interest rate of five per cent. However, many new properties do not come with kitchens or parking as standard, these are extra and can add six per cent to the total cost.

Many prospective buyers of second homes are drawn to Austria as an alternative to the more expensive properties on the market in France, where resorts are already established and quite heavily populated with tourists. Austrian property, on the other hand, offers a new experience, are "still charming and generally unspoiled by tourism", according to one investor, whilst still offering ample opportunity for good returns on rentals.

© Fair Investment Company Ltd