Vienna – In a bold move to counter rising housing costs, Austria’s Vice Chancellor and Housing Minister Andreas Babler has announced plans to extend rent control measures beyond the country’s regulated housing market, aiming to protect tenants across the board from inflation-driven hikes.
Speaking at the SPÖ parliamentary club on Monday, Babler said a temporary freeze on rent increases this year had already spared tenants an estimated €140 million. Without the cap, more than a million households would have faced rent hikes this April. “Since 2010, rents in Austria have surged by 70%—three times the Eurozone average,” he said. “Tenants are at their breaking point.”
The government’s current rent cap only applies to regulated contracts—such as category and reference rents in public or cooperative housing. However, Babler signaled that the administration is working “at full speed” to apply similar protections to the unregulated, free market sector by fall. Coalition partners, he said, have committed to advancing this reform.
SPÖ housing spokesperson Elke Hanel-Torsch backed the move, dismissing concerns from landlords who argue that rent caps discourage property maintenance. “These apartments aren’t being continuously renovated anyway,” she said.
To guard against inflation longer term, a new legal index for rent adjustments is in the works. Set to take effect in 2028, it will cap annual increases at 3%. If inflation surpasses that threshold, tenants will only be required to absorb half the excess cost. In 2026 and 2027, rent hikes will be limited to 1% and 2%, respectively.
The initiative hasn’t been without criticism. Economists warn the benefits may also reach higher-income tenants in historic buildings, not just those most in need. Additionally, fears are mounting that more landlords will shift to short-term leases, avoiding long-term commitments.
To combat this, Babler announced plans to raise the minimum duration of fixed-term leases from three to five years. “Tenants are often vulnerable to pressure,” he said. “They fear losing their homes and accept unfair conditions. We’re determined to change that.”
The effort marks a decisive turn in Austria’s housing policy—one that aims not just to tame inflation, but to restore security and dignity to renters across the nation.
