Wooden construction elements often exhibit lower life cycle greenhouse gas (GHG) emissions than conventional counterparts (‘material substitution effect’). Moreover, the building stock represents a carbon (C) sink if timber inflows (construction) surpass outflows (demolition) (‘C-stock effect’). A dynamic stock model incorporating these effects is applied to quantify potential climate benefits of wood construction in Austria's residential building sector. If present trends are maintained, culminating in a wood construction share (WCS) of 50% during 2050-2100, building shells could contain three times as much C in 2100 as today. Annual timber demand for residential construction could double, but would remain well below Austria's current net exports. Compared to a baseline scenario with constant WCS (22%), cumulated GHG savings from material substitution until 2050 are estimated 2 to 4.2 Tg CO2-equivalent – clearly less than savings from C-stock expansion (9.2 Tg). Savings from both effects would double in a highly ambitious scenario (WCS=80% during 2050-2100). The applied ’Stock Change Approach’ is consistent with IPCC Guidelines, but the above-mentioned savings from C-stock changes would not materialize under the current default GHG inventory accounting approach. Moreover, savings from C-stock effects must eventually be weighed against forest C-stock changes, as growing domestic demand might stimulate wood harvesting.