The Best Neighborhoods to Invest in Austria

Published on January 15, 2026 and written by Cyril Jarnias

Austria checks practically every box that real estate investors are looking for: solid economy, exceptional quality of life, modernizing infrastructure, and a very tight rental market in major cities. But beyond this overall picture, your investment performance largely depends on one very specific criterion: the neighborhood in which you buy.

Why Austria is a Prime Playground for Investors

The Austrian macroeconomic context remains one of the most reassuring in Europe for a medium- and long-term investor. The country is recovering from a phase of real estate correction: after a decade of increase (+50% over ten years nationally, over +160% between 2005 and 2023), prices have slowed, with a decline of about 2.1% in 2024 at the residential level, and even seven consecutive quarters of decline until the end of 2024.

This slowdown is occurring in a still very supportive environment:

On the market side, rental demand remains tight: owner-occupancy concerns only about 54% of households (and only 19.3% in Vienna), rents have jumped nearly 90% since 2005 nationally and 100% in the capital. Gross average yields are around 3.5 to 3.7% nationwide, with significant variations depending on cities and neighborhoods. In central Vienna or Salzburg, rates can drop towards 2.5–3%; on the outskirts or in certain medium-sized cities, they exceed 5–7%.

Vienna: Anatomy of the Best Districts for Investing

With about 2.03 million inhabitants, a population growth rate of about 1.2% per year, and a vacancy rate fallen to 3.6% (vs. 6.6% in 2013), Vienna remains the engine of the Austrian market. The city is overwhelmingly rental (nearly 77% of residents are tenants), and about 70% of the residential stock is held by institutional investors or companies.

In 2025, the average price stands around €6,800/m², with an increase of about 7% in 2024, and up to 8% in prime sectors. But behind this average lie three very different worlds:

– the 1st district (historic hyper-center, ultra-luxury)

– the Gürtel districts (2 to 9), close-in center belt

– the peripheral districts (10 to 23), more affordable but with strong growth and yield potential

Innere Stadt (1st): The Historic Heart, Ideal for Heritage Value

Innere Stadt concentrates prestige: St. Stephen’s Cathedral, Hofburg, luxury boutiques, law offices, bank headquarters. Prices there reach peaks, with averages ranging from about €17,600 to nearly €25,000/m², and peaks at €30,000/m² for the most exclusive properties. A recent estimate even showed a rise of nearly 30% in one year for some segments, proof that the very high-end resists cycles.

For an investor aiming for pure capital appreciation, the 1st remains a safe bet: absolute rarity of supply (UNESCO zone, strict regulation), constant international demand, growing luxury market (+10% in the premium segment nationwide).

Districts 2 to 9: The Central Belt, Compromise Between Prestige and Yield

The Gürtel neighborhoods show wide price ranges, from €6,000 to €12,000/m² depending on the address. They contain very different worlds, from the green and family-oriented Leopoldstadt to the trendy 7th filled with galleries, including the very student-oriented 4th.

A table allows comparison of some key districts of the Gürtel.

Prices and Yields in Vienna’s Central Belt

District	Dominant Profile	Indicative Average Price (€/m²)	Typical Rent (€/m²/month)	Estimated Yield
2 – Leopoldstadt	Green neighborhood, Prater, close to center	~7,900 (sources 5,455–7,918)	11–15	4–5%
3 – Landstraße	Embassies, Belvedere, Wien-Mitte	~8,200–8,500	12–18	~4–4.3%
4 – Wieden	Students, creatives, Naschmarkt	~10,200	14–20	~5%
6 – Mariahilf	Commerce, Airbnb, close to center	~7,900 (another source 6,732)	13–18	~5%
7 – Neubau	Very trendy, young professionals, MQ	~8,900–9,400	14–20	~4.5%
8 – Josefstadt	Small, quiet, bourgeois	~6,100	13–18	~4%
9 – Alsergrund	Universities, AKH, strong rental demand	~8,400–9,060	13–18	~5%

In these neighborhoods, the momentum is driven by several structural factors:

– concentration of prestigious universities (University of Vienna, TU Wien, WU, university hospitals), ensuring continuous demand from students and medical staff

– excellent connections by subway, tram, and S‑Bahn

– strong appeal for qualified expats, especially in Wieden, Neubau, Landstraße

Transforming Popular Districts: 5th, 10th, 15th, 16th, 20th, 22nd, 23rd

This is undoubtedly where the best current opportunities are located in Vienna: sectors long considered “secondary,” but which now combine population growth, major urban projects, and above-average yields.

The Favoriten – Simmering – Meidling Trio (10–12)

The southeastern districts (10–12) are in a range of €3,600 to €7,000/m² and offer high yields.

District	Average Price (€/m²)	Rent (€/m²/month)	Expected Price Growth	Estimated Gross Yield
10 – Favoriten	~4,980	10–14	up to 12%/year	~6% (studios up to ~6.6–6.9%)
11 – Simmering	~4,950	9–13	~9%	~7%
12 – Meidling	~5,270	11–15	~8%	~6%

Favoriten is the most populated district, hosts the main train station (Hauptbahnhof), and has a large population of students and young professionals. Simmering, formerly industrial, now shows the best average profitability in the entire capital (about 7%), driven by still low prices and a dynamic rental market. Meidling, very well-served and family-friendly, benefits from a gentle transition to a sought-after neighborhood status.

For an investor seeking a low price / high yield / strong future growth compromise, this southern trio is currently on the front line.

The “Transforming” Western Neighborhoods: Penzing, Rudolfsheim-Fünfhaus, Ottakring, Hernals (14–17)

On the west bank, several districts show a very clear trajectory of gentrification and upgrading.

District	Average Price (€/m²)	Price Growth (2025)	Indicative Yield
14 – Penzing	~6,350	+10%	~6.5%
15 – Rudolfsheim-Fünfhaus	~5,370	+11%	~6%
16 – Ottakring	~5,165	+10%</td	~6.5%
17 – Hernals	~6,050	+8%	~6%

These districts mix former working-class areas, reconverted brownfields, and new residential projects. They attract more and more cafes, start-ups, and cultural spaces. The case of Ottakring is emblematic: studios already offering more than 4% return in 2022, then acceleration of price increases thereafter.

For a long-term investor, buying today in Rudolfsheim-Fünfhaus or Ottakring, at €5,000–6,000/m², with annual growth of about 10–11% and a yield of 6–6.5%, is like betting on Vienna’s next “central belt.”

Long-Term Real Estate Investor

The Green and Expanding Peripheries: Brigittenau, Floridsdorf, Donaustadt, Liesing (20–23)

The districts 20 to 23 combine moderate prices, solid yields (often 6–7%), and marked population growth.

District	Average Price (€/m²)	Average Yield	Particularities
20 – Brigittenau	~5,140	~6%	“Zukunftsanker” project, neighborhood rejuvenation
21 – Floridsdorf	~5,930	~6.5% (3‑room up to 5.4% per detailed data)	Strong population growth, boom in modern family houses
22 – Donaustadt	~7,300	~6%	59% green spaces, Seestadt Aspern, U2 line to center in <20 min
23 – Liesing	~5,835	~7%	Population growth, City Park Vienna, green business park

Donaustadt, with its flagship project Seestadt Aspern, perfectly illustrates what investors are looking for: major urban development, improved transport, very strong and growing population (over 220,000 inhabitants), and prices still below the center. Floridsdorf and Liesing, for their part, benefit from a boom in energy-efficient family homes, with rental yields often exceeding those of the city center.

The High-End Residential Districts: Hietzing, Währing, Döbling

For investors targeting a wealthy family or international clientele, districts 13, 18, and 19 should be seriously considered.

District	Average Price (€/m²)	General Range (€/m²)	Yield
13 – Hietzing	~8,350–9,000	6,500–11,000	~4%
18 – Währing	~7,500–9,700	6,300–22,500	~5%
19 – Döbling	~8,950–8,800	6,400–12,000	~4%

These districts are filled with villas, international schools, and parks (Schönbrunn for Hietzing, Cottageviertel and renowned high schools for Währing, vineyards for Döbling). Yields are lower than in popular areas (4–5%), but capital stability and brand image make this a very defensive segment. For institutional investors or wealthy families, these are safe bets.

Graz: The Student and Tech Laboratory with Winning Neighborhoods

Second largest city in the country, capital of Styria, Graz has changed status a lot. Long considered more provincial, it now combines:

– property value growth of about 6% per year over five years

– a 7% price increase in the last measured year

– an influx of young people (+5% population over two years)

– nearly 60,000 students for about 330,000 inhabitants

– yields frequently exceeding 4% and reaching up to 6% in some niches

Average prices remain lower than in Vienna: around €3,650/m² for an investment apartment, with peaks at €6,000/m² in the hyper-center.

The Most Promising Neighborhoods: Lend, Innere Stadt, Geidorf, Jakomini, Mariatrost, Puntigam

From an investment perspective, Graz is structured around a few strong poles.

Graz Neighborhood	Purchase Price (€/m²)	Average Rent (€/m²)	Investor Profile
Innere Stadt	6,500–7,500	17–19	Capital appreciation, high-end, solvent tenants
Geidorf	5,500–6,000	15–17	Students, professors, good rental stability
Jakomini	4,800–5,500	15–16	Urban neighborhood, interesting price/yield ratio
Lend	~<5,000 (depending on micro-location)	rising rents	Trendy neighborhood, gentrification, young professionals
Mariatrost	4,000–4,500	12–14	Quiet residential, families, good appreciation potential
Puntigam	3,500–4,200	11–13	Entry-level, industrial and commercial dynamism

Lend is probably the symbol of Graz’s transformation. Its population grew from 27,859 to nearly 33,800 inhabitants between 2011 and 2024. The neighborhood attracts bars, independent boutiques, creative spaces, and concentrates a large portion of young professionals. This is typically where an investor can hope for above-average value increases, at the cost of greater selectivity regarding micro-locations.

In the medium term, the commissioning of the Koralmbahn – which will reduce the Graz–Klagenfurt journey from about 3 hours to 45 minutes – should further strengthen the city’s attractiveness and its neighborhoods, especially for commuters and companies.

Linz: Third City, Top Choice for a Yield/Price Couple

Linz, capital of Upper Austria, is often described as the “third way” between Vienna and Graz. With strong industrial roots (voestalpine, logistics), a growing tech scene (+15% for the technology sector, arrival of companies like Dynatrace or Runtastic), and a UNESCO “City of Media Arts” status, the city combines several demand drivers.

The numbers speak for themselves:

– +6% average annual increase in property values over five years

– +10.1 to 12.2% on some segments of recent apartments

– a growing population (about 204,000 inhabitants)

– yields displayed up to 4.5%, often higher than those of Vienna for comparable ranges

Where to Invest in Linz: Innenstadt, Urfahr, Rehabilitating Neighborhoods

The 16 statistical districts of Linz offer varied profiles, but some clearly stand out.

Linz Neighborhood	Price / Profile	Interest for the Investor
Innenstadt (center)	~€4,800/m², high rents, low vacancy	Ideal for long-term rental to solvent tenants, but gross yield a bit compressed (2.8–3%)
Urfahr	Sought-after residential, north bank of Danube, well-served	Mix families / students, good value prospects but higher entry tickets
Pöstlingberg	Villas, view, high-end	More capital appreciation than yield, affluent clientele
Spallerhof, Bindermichl-Keferfeld	Lower prices, former working-class neighborhoods, good tenant turnover	Yield targeting, potential appreciation through renovation and requalification
Ebelsberg, Pichling	Development zones in the south, many new projects	Interesting for new builds with decent yield and future appreciation
Bulgariplatz, “Grüne Mitte Linz”	Young households, changing urban landscape, green projects	Typical of an “up-and-coming neighborhood,” to watch closely

Gross yields, according to aggregated data (Numbeo, real estate portals), are around 2.8–3.5%, but reality is more nuanced: on small apartments for students or on renovated old buildings in districts like Bindermichl, Spallerhof, or Bulgariplatz, one can reach 4–5% gross. In fact, a case study cited mentions an investor in Linz achieving an 18% net yield via well-positioned tourist rentals.

For a limited budget, Linz offers a rare combination: contained entry tickets, solid rental market (over two-thirds of the stock is rental), and a growing urban economy.

Salzburg: Balancing Tourist Prestige and Yield

Salzburg, the fourth largest city in the country, is a very particular market: extremely desirable (Mozart’s birthplace, UNESCO historic center, massive tourist flows), but constrained by severe supply scarcity and strict regulations. The result: very high prices and compressed yields.

Recent data indicates:

– average price for a 150 m² house around €868,000 in 2024, up 5%

– apartment price in the city center around €6,600/m², vs. €5,240/m² on the outskirts

– prime segments (Altstadt, Riedenburg, Aigen) beyond €8,500/m², with peaks at €20,500/m²

– overall gross yields around 2.7–3%, with a projection of 3.8% in the coming years for good locations

– average rents around €18.30/m², reaching over €23/m² in the best sectors

Mapping Salzburg’s Neighborhoods

The interest of Salzburg for an investor heavily depends on the chosen strategy.

Neighborhood Type	Examples	Price Range (€/m²)	Potential
Prime / Luxury	Altstadt, Riedenburg, Aigen	>8,500, up to 20,500	Capital appreciation, high-end clientele
High-end Residential	Parsch, Gneis, Morzg	7,500–8,500	Affluent families, stability, moderate progression
Mid-range	Maxglan, Mülln, Salzburg South	6,500–7,500	Good yield/risk compromise, constant local demand
Affordable / Up-and-coming	Lehen, Gnigl, Itzling, Elisabeth-Vorstadt	5,500–6,500 (even <5,500)	Rehabilitation potential, regeneration projects, better yields
Entry-level	Liefering, Taxham, Kasern	<5,500	Lower tickets, gradual progression

For those targeting rental income, the affordable neighborhoods undergoing recomposition – Lehen, Gnigl, Itzling, Elisabeth-Vorstadt – offer an interesting entry point: rising rents, still contained prices, enhancement through urban projects and transport improvements. In these sectors, achieving 3.5–4% gross yield is realistic, especially if one works on the quality of the properties.

Innsbruck: Capturing the Student and Tourist Income

Innsbruck, capital of Tyrol, combines three major audiences: students (28,000 enrolled at the university, about half international), four-season tourists (ski resorts, hiking, winter sports), and workers in the tertiary and tourist sectors.

Key figures for the investor:

– annual property appreciation around 3.5%

– average rental yields of 4 to 4.3%

– population growth of 3% over two years

– tight rental market, very low vacancy

The Hötting neighborhood is emblematic: perched above the city with a view over the valley, it attracts students, professors, and expatriates, and delivers particularly attractive rental returns on shared apartments or studios. Nearby villages like Axams or neighborhoods like Pradl offer slightly cheaper alternatives for housing seasonal workers and families.

For an investor focused on short-term and seasonal rental, Innsbruck is undoubtedly, along with certain tourist municipalities in Tyrol and Carinthia, one of the best playgrounds in the country.

Klagenfurt, Villach, Wörthersee: The Vacation-Yield Bet in the South

In the south, in Carinthia, several cities and lake areas stand out, combining quality of life and yield.

Klagenfurt and Wörthersee

Klagenfurt shows:

– an average annual growth of 5.5%

– an average rental yield around 4%, sometimes 4.3%

– a population growth of 3.5% over two years

The nearby Wörthersee lake is becoming a hotspot for second homes and vacation rentals. Between large waterfront villas and upscale apartments, prices are rising, but still remain below those of Salzburg or Tyrol. The future improved rail link (Koralm, Semmering) will further enhance accessibility from Graz and Vienna.

Villach: Connectivity and Affordable Prices

Villach, the second largest city in Carinthia, benefits from its strategic position near Italy and Slovenia, with new cross-border trains. Prices there are significantly lower than in major metropolises, rents for a 1-bedroom are around €450 and about €800 for a 3-bedroom, with reasonable expenses.

For an investor seeking a low cost / decent yield / low volatility compromise, a small portfolio of apartments in Villach, targeting retirees, cross-border commuters, and soft tourism, can be a good complement to riskier assets in major cities.

How to Choose Your Neighborhood in Austria: Some Concrete Benchmarks

The data from the different cities allow us to draw several practical rules.

1. Distinguish Capital Appreciation and Yield

Some areas offer excellent appreciation prospects, but modest profitability:

– Vienna hyper-center (Innere Stadt)

– luxury neighborhoods of Salzburg (Altstadt, Aigen) or Tyrol (Kitzbühel with +150% increase since 2012)

– posh residential districts of the capital (Hietzing, Döbling, Währing)

Conversely, other territories optimize gross yield rates:

– districts 10, 11, 15, 16, 20, 21, 22, 23 in Vienna (5–7% depending on segments)

– Linz (up to 4.5%, or even more on furnished or seasonal rentals)

– some neighborhoods in Graz outside the center (Mariatrost, Puntigam, areas with 3.6–4.5% yield)

– intermediate cities like Klagenfurt or Wels, with moderate prices and yields around 4%

The choice must therefore align with your strategy: preserve capital, generate cash flow, or balance both.

2. Rely on Demographics and Infrastructure

The neighborhoods that perform best often combine: proximity to public transport, quality of schools, leisure infrastructure, and a pleasant environment. These elements attract both families and young professionals, which fosters sustained real estate demand.

A simple rule frequently holds true: walking proximity to a subway, tram, or S‑Bahn stop can add 10 to 20% value to a property in Vienna, and even more when it comes to new or extended lines.

3. Take the Sustainability Axis Seriously

Data shows that 70% of buyers declare themselves willing to pay more for housing with “green” characteristics. Public policies (thermal renovation bonuses, targets of having 35% of the residential stock energy-efficient by 2025) and tax incentives (specific depreciable deductions) further reinforce this advantage.

For an investor, this means that housing:

will not only have higher rents, but also a much lower risk of depreciation in the medium term.

4. Understand Taxation and the Regulatory Framework… Neighborhood by Neighborhood

Austria remains fiscally reasonable for real estate (transfer tax at 3.5%, base property tax rate at 0.2%, capital gains tax generally at 30%). But two elements weigh particularly on the investor:

– strong rental regulation (ceilings for certain leases, rental law, temporary freeze of some rents in 2025)

– taxation of short-term tourist rentals, which can affect business plans in Salzburg, Innsbruck, Vienna, or on the lakes

To this is added the need for specific authorization for non-EU/EEA nationals in several regions to acquire residential properties. Each Land and sometimes each municipality may have its own restrictions on second homes (Zweitwohnsitz) or aparthotels.

Summary: The Main Profiles of Winning Neighborhoods in Austria

Considering all the data, several families of neighborhoods emerge as particularly attractive for investing in Austria.

1. The Dynamic Peripheries of Vienna
Favoriten, Simmering, Meidling, Penzing, Rudolfsheim-Fünfhaus, Ottakring, Brigittenau, Floridsdorf, Donaustadt, Liesing: still affordable prices (about €4,000–6,000/m²), yields of 5–7%, price growth reaching 10–12% per year in “transforming” districts.

2. The Student and Tech Neighborhoods of Graz
Geidorf, Lend, Jakomini, Innere Stadt: high density of young people, extremely fluid rental market, yields of 3.5–4.5%, appreciation potential supported by population growth and the rise of start‑ups.

4. The Prestige Residential Neighborhoods for Defensive Placements
Hietzing, Döbling, Währing in Vienna, Altstadt and Aigen in Salzburg, lake areas of Wörthersee, neighborhoods like Hötting in Innsbruck: prioritize capital protection and use value (second home) rather than gross yield.

5. The Secondary Cities of the South and West
Klagenfurt, Villach, Wels, Bregenz: less volatile markets, lower prices, yields around 4%, driven by tourism, industry, or border proximity.

In a country where the majority of households will still be tenants in the coming years, where urban growth remains strong, and where new supply is contracting, neighborhoods that are well-connected, in a transformation phase, and driven by the green economy and technology have strong chances of remaining, durably, the best places to invest in Austria.