Pandemic pushes up Swiss real estate prices

Consumer prices have risen sharply in Switzerland, increasing the attractiveness of tangible assets such as residential real estate © Keystone / Christian Beutler

The value of residential real estate in Switzerland continued to rise sharply in 2021 in the wake of Covid-19. Property prices are expected to rise further this year, according to an analysis.

This content was published on January 4, 2022 – 11:23

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Owners of condominium apartments saw their value increase by 7.3% during the year. The increase for single-family homes was almost as high at 6.9%, the Swiss Real Estate Offer Index revealed.External link, released on Tuesday. This is compiled by the Swiss Marketplace Group / ImmoScout24 in collaboration with the real estate consulting firm IAZI.

The reasons given are the evolution of housing needs linked to the pandemic and solid economic development. In addition, immigration continues and the supply of land is becoming increasingly scarce, according to the report. At the same time, consumer prices rose sharply. This further increases the attractiveness of tangible assets such as residential real estate.

Landlords weren’t the only potential winners last year, ImmoScout24 added. Tenants looking for accommodation could benefit from an average drop in asking rents of at least 0.3% across the country.

The general downward trend in rents is explained by a “genuine end-of-year surge”. In December alone, a decline of 0.9% was recorded nationally.

Rise

In the new year, real estate prices are expected to continue to rise, according to ImmoScout24. Whether the trend reverses depends on the monetary authorities, he said.

The US Federal Reserve announced that it would raise its key rate faster than expected. If the European Central Bank (ECB) and the Swiss National Bank (SNB) follow suit, price declines are to be expected in Switzerland, said Martin Waeber, managing director of real estate at the Swiss Marketplace Group. However, such a decision by the SNB is currently considered very unlikely by the market.

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