House prices in the Austrian capital Vienna continue to rise despite the global economic crisis due to strong economic growth and declining mortgage interest rates, according to the National Bank of Austria (OeNB).

Residential property prices rose by 9.52% (6.45% in real terms) year on year to Q1 2011 and increased 2.53% on a quarterly basis and have been rising consistently in Vienna since Q3 2004.

In the rest of Austria residential prices also continued to rise, albeit at a slower rate, as during the year to end of Q1 2011 they had gone up by 2.36%. House prices grew by 2.52%, quarter on quarter in Q1 2011, after a 1.4% rise in Q4 2010.

Around 70% of residential property in Vienna city centre is owned by institutional investors, banks and companies. With prices doubling in the past decade in the first district, the heart and historical centre of Vienna, mainly due to the shortage of larger units, with prices of such apartments rising faster than smaller-sized units.

The average mortgage interest rate for loans with an initial rate fixation (IRF) of 1 to 5 years was 2.45% in August 2011, this was down from 3.7% two years previously. It is mirrored by the average mortgage rate for loans with an IRF of more than 10 years which is also down from two years ago, falling from 5.12% to 4.87%.