The Latest News From The Swiss Real Estate Market

The Latest News From The Swiss Real Estate Market

According to recent statements based on statistics, the Swiss government has made tangible progress in lowering residential property prices. Housing prices are falling for the ninth consecutive quarter. Although, it should be noted that during the 4th quarter, there was a slight increase in prices for houses and apartments. Reputable sources say that prices jumped 0.31% during this period.

Why the Swiss real estate market is cooling?
Swiss National Bank tightened credit requirements. This decision was made due to the fact that currently 90% of all household debts are related to real estate. In order to influence the unpleasant situation, it was decided to introduce more stringent credit requirements for potential borrowers. But, this step did not go unnoticed for the real estate market and, at the moment, the growth rate of the latter has slowed noticeably.

Also, the fact that in 2015 the Central Bank of the country refused to capitalize against the euro also played a role. This has made Swiss property more expensive for foreign investors, thereby reducing demand.

What about the rent?
According to authoritative sources, the forecast for 2020 in the field of residential real estate is not encouraging. It was stated that there will be an excess of nearly 9,000 rental housing properties throughout the country this year. Also, experts say that 75,000 apartments in the suburbs are idle without tenants. The authorities of some regions, in order to at least slightly improve the situation on the residential real estate market, are even ready to pay for the move.

Meanwhile, rental yields in Switzerland are low, about 3.27%. For example, apartments in Zurich cost an average of €11,467 per sq.m. To buy apartments of 120 square meters in the center of cities such as Zurich and Geneva, the buyer will need to pay €1.45 million and €1.38 million, respectively. As for the rent out of such objects, it is equal to an average of €3,946 and €3,827 per month, respectively.

Latest economic news from Switzerland
The Swiss economy grew by about 2.8% in 2019 compared with a 1.9% rise in the previous one. Experts say this is the strongest increase since 2010. However, economic growth, according to forecasts of the International Monetary Fund (IMF), will slow sharply to only 0.8% in 2020 amid weak domestic demand.

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