The appeal of vibrant European cities such as Berlin and Vienna goes far beyond their rich history and culture. For many, these cities offer a dynamic lifestyle and a potentially lucrative property market. One of the most popular trends in recent years has been the growth of short-term rentals, with platforms such as Airbnb offering travellers a unique accommodation experience. However, the short-term rental landscape is changing, with recent government regulations affecting both Berlin and Vienna. Let’s take a look at these shifts, as well as Vienna’s new construction market as a potential alternative for investors looking for a new opportunity and a stable income.
Balancing tourism and housing
For years, short-term rentals have been a popular option for both tourists and property owners. However, concerns about housing availability and rising rents have prompted stricter regulations in some major cities.
Berlin has introduced strict regulations on short-term rentals to prevent the city from becoming a holiday rental or Airbnb centre. The main law regulating short-term rentals in Berlin is the Zweckentfremdungsverbot. It prohibits property owners from renting out their entire apartment for short-term use without permission from the city authorities and limits the rental period to 90 days per year. In turn, property owners who wish to rent out entire flats for short-term use must apply for a special permit from the city. If found to be in breach of the law, property owners could face hefty fines of up to EUR 100,000.
As we can see from Airbnb’s statistics, the new regulations have had a significant impact on Berlin’s property market, in particular, the number of “entire home” listings on the platform decreased by 49%, which in turn has affected demand and prices.
Vienna, which is also concerned about the rapid development of the short-term rental market, recently introduced new regulations aimed at balancing tourism with the needs of city residents.
Under the new regulations, property owners offering short-term rentals must now digitally register for Airbnb hosts. This creates a transparent system for tracking rental activity.
In addition, if the owner rents out their property for more than 90 days per year, it is mandatory to obtain an exemption permit outside of residential zones — Ausnahmebewilligung — from the city authorities. To obtain one, it is necessary to provide detailed information about the property, proof of ownership and rental history. Offering an apartment online, such as on Airbnb, in violation of building regulations is punishable by fines of up to EUR 50,000 or substitute imprisonment of up to two weeks. In light of the recent agreement between Airbnb and Vienna, the city has access to rental data. This cooperation could lead to stricter regulations in the future.
Vienna’s Baunovelle market — an emerging opportunity?
The recent changes to short-term rental regulations in Berlin and Vienna present both challenges and opportunities for investors. As the landscape changes, investors looking for stable returns could consider Vienna’s Baunovelle market. This refers to new construction projects offering modern apartments with the latest amenities.
New-build apartments boast energy-efficient features, high-quality eco finishes and modern amenities such as in-building gyms and roof terraces. These features are highly sought after by tenants, making them easier to let and potentially commanding higher rents. New-build properties tend to increase in value over time due to their modern features and limited availability.
Unlike short-term rentals with their limitations, Baunovelle apartments are ideal for medium and long-term rentals, providing investors with a steady cash flow. In addition, investing in new construction often comes with tax breaks and other financial incentives.
Ready to explore Vienna’s Baunovelle market? Dwell Bell embracing technology and diversifying revenue streams enabling swift pivots, and ensuring resilience and long-term growth. Through experience and perseverance, we have come to appreciate the importance of foresight, prudence, and adaptability in safeguarding investments and ensuring financial stability. Together, let’s turn the current situation into an advantage!
