House hunting in 8230; Austria

Foreigners usually receive approval to buy large luxury properties. However,apartments in popular tourist destinations are harder to get....

A seven-bedroom vacation home with a bell tower in the Salzkammergut region. Built in 1897 for the mayor of Bad Ischl,the house is typical of summer homes built in the area during the Industrial Revolution,when people built elaborate homes to flaunt newly acquired wealth. The 6,000-square-foot house has three stories,including the above-ground basement level.

The kitchen has painted cabinets,wooden countertops and a tiled backsplash. The master bedroom has an en-suite bathroom lined in white marble. The grounds have fountains and sculptures. Cedar,spruce and red beech can be found throughout the property.

Bad Ischl was the summer home of Franz Josef I,emperor of Austria until 1916. The town had its heyday during his era before World War I. Today,hiking,skiing and sailing are popular in the area,as are the towns spas,and operettas presented at the TheaterHaus. Salzburg and its airport are a 45-minute drive.

Market Overview

In Austria we have a different philosophy of homeownership, said Leo Hohla,a partner in the Salzburg company Stiller and Hohla Immobilien. Real estate stays in the family for several generations. The countrys property market was stable as transactions were few then.

In price,the residential market went up 5.2 per cent in 2009,according to a report issued by Knight Frank in April. Anton Holzapfel,the general manager of the Austrian Association of Real Estate Experts,said prices had been rising in the downtown areas of major cities,while prices in other parts of the country had been flat since 2008. He said there had been no significant change in volume. An average single-family home in the Salzburg area costs about 3,000 euros per square meter 353 per square foot,at 1.26 to the euro,Hohla said. New construction can reach 6,000 euros a square meter,he added,although the upper end can reach 8,000 to 9,000.

New condominiums cost about 3,000 to 6,000 euros a square meter,depending on location.

Who buys in Austria

Ninety-five per cent of all real estate transactions were done by Austrians in the last 10 years in Salzburg and the Salzkammergut, said Hohla. The remaining 5 per cent represent sales to foreign buyers. Hohla said Germans were most prevalent in the Salzburg area; but buyers from all over the world are represented.

Buying basics

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Buyer restrictions vary by province,Hohla said. They are intended to stabilise the market by keeping out foreign speculators. In most cases,foreigners who intend to make their Austrian residence their primary home receive approval to buy. In Hohlas experience,foreigners usually receive approval to buy large luxury properties like the property featured here,but it is harder to get approval to buy apartments in popular tourist destinations.

Closing costs include a 3.5 per cent transfer tax paid to the Austrian government,and an additional 1 per cent to register the deed. The buyer and the seller each pay a 3 per cent real estate agent commission. Hohla says the legal aspects of the sale can be handled by either a notary or a lawyer; legal fees are usually around 1.5 per cent,but vary from case to case.