Hidden Gems of Austrian Real Estate: Why Invest in Graz

Graz, the capital of Styria, is Austria’s second-largest city. Known for its well-preserved medieval architecture and dynamic student population, Graz offers a compelling mix of tradition and innovation. For real estate investors, Graz presents attractive opportunities with rental yields close to the rates in Vienna.

Graz Market Overview

Graz's real estate market is characterized by its affordability and higher rental yields compared to other Austrian cities. According to data from the Global Property Guide, the average price per square meter in the city is about €4,400 per sq/m. In the inner city the prices gravitate around €6,000 per sq/m, while outside the center it’s approximately €4,200 per sq/m. Rental prices are competitive, with one-bedroom apartments in the city center renting for around €800 per month, and similar apartments outside the center renting for about €600 monthly. These figures result in gross rental yields of approximately 3.00% in the city center and around 3.60% in the outskirts. Comparing it to other cities - Graz offers a little less return on real estate investments than Linz and about the same rate as Vienna.​

Demographic Trends

As of 2024, Graz has a population of approximately 330,000, reflecting a steady growth trend driven by its large student population and international appeal. The city’s universities attract nearly 60,000 students annually, contributing to a vibrant rental market and continuous demand for housing. The foreign-born population in Graz, including many from EU and non-EU countries, constitutes about 25% of the total population, adding to the city’s multicultural atmosphere​.

Growth Prospects

Graz thriving economy is fueled by sectors such as education, technology, and manufacturing. The presence of major educational institutions like the University of Graz and Graz University of Technology not only bolsters the local economy but also ensures a steady influx of students and professionals. The city is also home to numerous technology companies and startups, further driving demand for residential properties​.

Infrastructure Developments

Graz is investing heavily in infrastructure to support its growing population and economic activities. Key projects include the expansion of the Graz railroad system. The ambitious and massive railroad line project Koralmbahn​​ between Graz and Klagenfurt is expected to be finished by the end of 2025. The project is about to cut the travel time of this route from 3 hours down to 45 minutes. The line would ease the commute within the region and will have a strategic local and regional significance for further economic development.

Investment Benefits

• Demand: Graz’s large student population and lively technology sector ensure a consistent demand for properties.
• Economic Stability: The city’s diverse economy, supported by strong educational and technological sectors, provides a stable investment environment.
• Moderate Yields: With gross rental yields of 3.0% to 3.6%, Graz provides similar yields as Vienna at relatively lower prices.
• Quality of Life: Graz offers excellent healthcare, education, and cultural amenities, attracting a broad range of residents and ensuring continuous housing demand.

Investing in Graz offers unique advantages due to its strong rental market driven by a large student population and competitive property prices. The city's consistent demand for rental properties, fueled by nearly 60,000 students annually, ensures a broad rental market. Furthermore, Graz's ambitious Koralmbahn railway line project will further enhance regional connectivity and create an additional value of property values. With rental yields of 3.0% to 3.6%, comparable to Vienna but at lower property prices, Graz stands out as a strategic choice for investors seeking both rental income and potential for property appreciation

Whether you are seeking steady rental income long-term property appreciation or secure real estate investments, these secondary cities hold significant potential. For more detailed insights and tailored specific advice, reach out to us. Our aim is to provide reliable expertise and help you with your investment decisions.