Austria's strict rent controls spark debate over housing affordability in 2026
Austria has extended strict rent controls to ease housing pressures, but critics warn the measures could backfire. The rules, passed in early 2026, cap rent hikes and lengthen lease terms while freezing some prices entirely. Meanwhile, building society savings plans remain popular, with over a third of Austrians relying on them to fund future home purchases.
In early 2026, the Austrian National Council expanded the Mietpreisbremse to cover open-market rents from 2026. The new laws limit increases to 3% above inflation, freeze regulated rents in spring 2025, and allow adjustments only once yearly from April 1. Regulated rents will rise by just 1% in 2026 and 2% in 2027, while minimum lease terms stretch from three to five years for contracts signed after November 1, 2025. Critics, including the Freiheitliche Wirtschaft and the Haus- und Grundbesitzerbund, have called the reforms 'Marxist experiments' and an 'attack on property.'
Susanne Riess-Hahn, CEO of Wüstenrot Bausparkasse, argued the changes would deepen housing shortages and push costs higher. Her concerns come as 82% of Austrians say they want to own property, yet 56% admit they cannot afford it. Currently, 48% rent, 42% own their homes, and the rest live with family or in shared flats.
Building society savings plans remain a key tool for aspiring buyers, with 37% of Austrians holding a contract. A state premium of €18 per year—totalling €33 million—helps sustain these plans, though its value is largely symbolic. Despite this, total savings in such schemes grew by €626 million to €15.2 billion. Lending by building societies now stands at €20.54 billion, with average loans exceeding €200,000.
The extended rent controls aim to stabilise housing costs, but industry leaders fear unintended consequences. With most Austrians unable to afford homeownership, building society savings continue to play a vital role. The government's €33 million premium, though modest, supports these efforts as the housing market faces further strain.
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