Ownership or Rent-to-Buy: What Really Pays Off?

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For many Austrians, the dream of having their own home remains deeply rooted in life planning. Personal space, stability, and the freedom to shape one’s living environment are powerful motivators. Yet demographic trends are shifting: while the average person already occupies around 40 square meters, household sizes continue to shrink. In Styria, for example, single households now make up roughly 38 percent — meaning more than one in three people lives alone.

Despite these changes, the desire for ownership remains strong. Most Austrians purchase their first home between the ages of 30 and 40. But anyone searching the housing market today quickly encounters a range of options. According to an analysis by the Institute for Real Estate Economics, Exploreal, 39 percent of commercial buildings and 9 percent of non-profit buildings in Styria fall under full ownership. In Graz, the figures are 34 and 6 percent respectively.

“Ownership is still the most popular way to acquire housing,” says Andreas Kern, chair of the Real Estate and Asset Trustees division at the Styrian Chamber of Commerce. But he notes that two lesser-known alternatives also exist: rent-to-buy and rental contracts with a purchase option.

Rare but Relevant: Rent-to-Buy Models

These models remain niche. In Graz, only about four percent of non-profit housing units fall into categories other than pure rental or ownership — and that small share includes not only rent-to-buy units but also assisted living, holiday apartments, and student housing.

Kern highlights key differences between the two models. Traditional rent-to-buy is relatively inflexible: the purchase is often agreed upon at the start, and part of the rent is credited toward the final price. “But such projects have become very rare,” he notes.

Rental with a purchase option, by contrast, offers more freedom. “After five years, tenants are offered the chance to buy the apartment — but they can also decline,” explains Karl Raith, housing law expert at the Consumer Protection Department of the Chamber of Labour Styria.

These models exist primarily in the non-profit housing sector. Legal frameworks such as the Non-Profit Housing Act (WGG) and the Tenancy Act make them difficult for private developers, who face planning uncertainties due to the flexibility these contracts require. “Otherwise, the interest would certainly be there,” Kern says.

Flexibility as a Selling Point

This flexibility is precisely what makes the model attractive, Raith argues. “People can test whether the apartment suits their life before committing to a purchase.” And since most Austrians buy property only once in their lifetime, Kern adds, the decision carries significant weight.

Whether the model pays off financially depends heavily on individual needs. In the non-profit sector, subsidies often mean more living space for a lower rent. Tenants may also be offered a more favorable purchase price later — though Raith cautions that this is not guaranteed.

Legally, the purchase price can fall anywhere between the minimum book value and the maximum market value. The non-profit housing association decides where within that range the price is set. It does not need to be fixed in the rental contract. However, if the price exceeds market value, tenants can request a legal review.

Tenants also pay an upfront contribution toward land costs. One percent of this amount is written off each year as part of the rent — reflecting the “use” of the apartment over time. If tenants decide not to buy after five years, they receive the contribution back minus the annual one‑percent deduction.

Why Not Buy Immediately?

“Ultimately, the rule has always been: if you have the money, you can buy right away,” Raith says. “But then you lose the flexibility.” Kern advises prospective buyers to compare financing options rather than relying solely on their primary bank. “Independent financial advisors often provide better comparisons.”

Despite inflation, property prices have remained relatively stable in recent years, Kern notes. “Affordability hasn’t fundamentally worsened.” What has changed, however, is the supply of affordable ownership units. “People increasingly want luxury when buying property,” Kern says — a trend that has pushed developers toward higher-end segments.