Solving the lack of building land is no easy task. But an Austrian company has a good concept to brinf more land onto the building market.
Exchange land for an apartment
Solving the lack of building land. A property developer undertakes the construction of apartments or houses. And the landowners receive a property in the finished project in return for the use of their land..
In Austria, building land is being hoarded. Many people who own a dedicated plot of land do not want to build on it or sell it. They don’t want the neighboring property to be built on or, another argument, they keep it – often for decades. After all, their children or grandchildren might need it later. But the reality is different in many cases: The next generation moves away and often does not want to or cannot build a detached house on a greenfield site in the countryside.
Although there is plenty of dedicated building land in Austria, there is still not enough land. Some municipalities are therefore continuing to reallocate land. Even if this is gradually becoming more difficult. Some federal states have declared war on land hoarding and have already made re-zoning more difficult or even banned it altogether without good reason.
Property instead of land
Solving the lack of building land. The property developer Immacon, which operates in eastern Austria, has now come up with a way of mobilizing plots of land that have already been dedicated. The company offers apartments or houses in exchange for plots of land.
Many property owners would not know how to invest the money from a sale. “Most of them can’t or don’t want to build themselves because they can’t get financing or it’s too expensive for them,” says Immacon Managing Director Christian Kaltenegger.
Many would not even lease their properties and therefore would not generate a return, only having to pay property tax on an ongoing basis. Many prefer a property to a plot of land as an investment.
Both sides would benefit from this type of offer. It is becoming increasingly difficult for property developers to find plots. According to Kaltenegger, plots are no longer affordable in Vienna, which is why his company is increasingly moving to more rural communities. The exchange offer gives the developer a plot of land and thus automatically equity for the project. “We would normally need a huge cash fund for each plot. But this saves us having to buy the plot,” says Kaltenegger.
In return, the seller later receives a house or one or more apartments in the finished project, which they can use themselves, rent out or sell. Contracts with a “condition precedent” are signed in advance, as Kaltenegger explains. The main advantage for owners is that they don’t have to worry about anything.
Many property developers are currently unable to build due to the high costs. “It’s different for us because we also produce our own homes,” says Kaltenegger. Apart from the structural engineering, we have everything in-house.
At least ten units
“For us, building a project like this would have been too much,” says Gernot Helm. He is co-owner of a 1.5-hectare plot of land in Feldkirchen in Carinthia, on which Immacon will soon be building 30 residential units in modular construction in three residential buildings.
In return for letting the land, the owners will receive four apartments in the project – whether they want to rent them out or sell them has not yet been decided. If the decision is made to rent them out, Immacon would also take over the initial letting and then hand them over to a property management company.
The model only works from a certain plot size, for example from 500 square meters of usable living space or ten apartments, says Kaltenegger. In addition to apartments, terraced houses could also be developed or used for tourism, depending on the zoning and development plan.
Building on land with building rights
Immacon also develops building lease projects. These properties are 15 to 20 percent cheaper, as the share of the land does not have to be purchased.
This is the case with a current project in Scheibbs, for example. The farmer who owns the land remains the owner and grants Immacon a building right for 99 years. Kaltenegger explains that the future owners of the houses do not acquire the land, but instead receive a long-term building lease, i.e. a rental agreement.
But they are still recorded in the land register. After 99 years, the contract can be extended or 20 percent of the value of the building can be redeemed.
This is another option to counteract the shortage of building land in Austria. Greenfield sites are still being built on, but at least on land that has already been designated – at least a small drop in an already very hot stone. (Bernadette Redl, 13.1.2024)
Source – Der Standard – Translated from Germen
Photo – Amazing Austria