Negative Consequences of High Housing Costs

A WIFO study commissioned by the Salzburg Chamber of Labour and presented on 18 January 2024 examines the effect of the high housing cost burden on Salzburg as a business location. For potential employees, the income after deduction of housing costs is lower in many Salzburg regions than in comparable regions in other federal states.

One focus of the study then deals with the question of what consequences the unfavourable housing cost situation has for Salzburg as a business location. Particularly clear effects can be seen in relation to the workforce, where a clearly negative internal migration balance has accumulated over the last 20 years.

Unique in a comparison of the provinces is the strong out-migration from the Salzburg core zone. In addition, the high cost of housing in the job-rich centres is causing households to reduce their housing costs by commuting.

At company level, the low labour mobility matches the below-average firm dynamics, but also the vacancies. Jobs in sectors with below-average incomes are particularly difficult to fill in Salzburg. Companies in these sectors also appear to be forced more frequently to compensate for housing cost problems by providing company housing.