House prices in Vienna have been rising consistently since Q3 2004. In the first district, the heart and historical center of Vienna, prices have more than doubled within a decade. From Q1 2005 to Q1 2012, house prices in Vienna as a whole rose by 67% (45% inflation-adjusted), compared to a 33% (16% inflation-adjusted) house price increase in the rest of the country.
One of the reasons for the strong increase in value in Vienna is a difficulty of obtaining new building plots in the center. Plus it is also the attractiveness of the city as a location for foreign investors.
Surrounded by the Vienna Woods the city boundaries are limited and it is difficult for the city to expand - and as a former administrative center and imperial city in has very few low class neighborhoods so that almost anywhere in the city could be regarded as a desirable location.
And experts predict that property prices are likely to continue to rise for the remainder of this year despite the economic crisis across the Eurozone.
Source: http://austriantimes.at/news/General_News/2012-06-22/42505/Property_prices_continue_to_soar