According to analyses by DIP partner Aengevelt Immobilien, the House Price Index of the Federal Statistical Office has recorded a continuous upward movement over six consecutive quarters. This increase follows a period of price decline for residential properties, which spanned from the fourth quarter of 2022 to the second quarter of 2024. In the first quarter of 2026, however, the price increase was moderate at 1.4 percent compared to the same quarter of the previous year.
Aengevelt classifies the current price development as not solely attributable to the interest rate level for mortgage loans. Interest rate increases typically have a dampening effect on the real estate market, as capital investors expect higher returns and financing bottlenecks can arise for owner-occupiers. At the end of 2022, price declines in this segment were still explained by the rise in construction loan interest rates from approximately 1.3 percent to around 4.0 percent. A subsequent interest rate reduction to approximately 3.4 percent at the end of 2023 was only reflected in house prices after a time lag of about twelve months.
It is noteworthy that the price increase observed since the fourth quarter of 2022 occurred even though the interest rate level rose again from approximately 3.3 percent to around 3.9 percent during the same period. Aengevelt interprets this as a loosening of the traditional connection between interest rate levels and real estate prices. The observed time lags between changes in interest rates and prices are attributed to the longer decision-making, planning, and realisation processes in the real estate sector.
Regional Heterogeneity of Price Development
Real estate prices are largely dependent on the respective local supply and competitive situation. This manifests itself in regionally differing developments of the House Price Index. For example, in the first quarter of 2026, the strongest price increase for condominiums was recorded in sparsely populated rural districts, where supply is considered scarce and transparent.
- —In sparsely populated rural districts, prices for condominiums rose by 3.6 percent compared to the same quarter of the previous year.
- —In more densely populated rural districts, a slight price decrease of 0.4 percent was registered.
- —In the “Big Seven” metropolitan areas, the price increase was lower at 0.3 percent, while prices in the other independent large cities increased by 2.9 percent.
- —For detached and semi-detached houses, heterogeneous developments were also observed: in sparsely populated rural districts, prices fell by 0.8 percent, while they rose by 1.4 percent in the Top 7 metropolitan areas and by 1.2 percent in the other independent large cities.
Dr. Wulff Aengevelt, managing partner of Aengevelt Immobilien, notes that residential property prices are increasing nationwide, but at the same time, the regional supply situation is gaining importance for price formation, in contrast to the interest rate level. He emphasises the option and obligation of local politics to influence house price levels and thus rents in a dampening manner by more consistently designating sufficient building land and refraining from additional cost-driving regulations. Furthermore, he sees it as the public sector's duty to initiate a timely expansion of supply in regions with chronic housing shortages through the socially responsible sale of no longer needed land and buildings.
