Homeownership of young adults in Austria from a national and regional perspective since 2010 – a fading dream?

Abstract

Since around 2008 there has been a sharp decline in homeownership rates in many OECD countries, particularly among young adults. This may reflect changing preferences for more flexible housing options or a decline in affordability due to a combination of house price increases and more difficult access to finance (mortgage loans, deteriorating labour market conditions, insufficient income, etc.). We first examine how these trends affect Austria as a whole and then focus on two regions with long-term policy strategies to promote homeownership through tailored housing subsidy programmes (Lower Austria, Vorarlberg). We use survey data from three sources (Microcensi, EU-SILC, HFCS) and regional administrative data. Our results show that young adults (up to 35) are less likely to become homeowners in 2020 than in 2010, although this is more pronounced for the middle-aged (35–49) than for younger people. We show that the analysis at national level is insufficient, as there are large differences between regions and between types of dwelling. Focusing on the regional level reveals that price dynamics in urban areas, which exceed income developments, appear to be the main drivers. As young households participate less in homeownership than previous generations, this points to a latent and deepening problem of intergenerational equity. Current regional policies to promote homeownership do not reach the necessary scale to counteract the dominant market trends. We discuss regional policy options that make use of the Austrian housing policy framework and focus on increasing the overall supply of housing rather than exclusively on demand-side measures.