“It has never been so difficult to become a homeowner in Switzerland for 20 years,” says Jonas Wiesel, co-founder of RealAdvisor.
- Property prices have continued to rise over the past 12 months: +7.9% for houses and +7.7% for apartments.
- Over the last quarter at the end of June, house prices (+1.6%) are now increasing less quickly than those of apartments (+1.9%)
- Inflation, rising energy prices and an increase in goods available for purchase point to a slowdown
RealAdvisor, the leading digital property valuation platform in Switzerland, publishes its quarterly barometer, detailing the evolution of residential prices in all of the country’s urban areas. “Despite the sudden rise in mortgage rates, real estate prices continued to rise in one year: +7.9% for houses and +7.7% for apartments. It has never been so difficult to become a homeowner in Switzerland for 20 years,” notes Jonas Wiesel, co-founder of RealAdvisor.
Trend reversal between houses and apartments in the second quarter
In the second quarter of 2022, the rise in prices continues: house prices increase by +1.6%. This figure is slightly lower than that of the first quarter (+1.8%). On the other hand, the rise in apartment prices was higher in the second quarter than in the first, with +1.9% once morest +1.7%. For the first time since the Covid pandemic, house prices therefore recorded a less significant increase than those of apartments. Region and location are likely to play a bigger role once more.
Among our neighbours, indicators suggest a slowdown in the rise in prices
In neighboring countries, prices are stabilizing. In France, real estate prices have only increased by +1.7% since the start of the year. Most price increases in the ten largest cities are less than +0.5%. In Germany, house prices also remained stable in the first quarter of 2022 (+0.1%). However, the value of apartments continued to increase (+1.7% over the quarter), but more slightly than the previous year (+4.1%).
The real estate market in Switzerland is certainly more stable. Demand for real estate remains high, but is affected by inflation and rising bank interest rates. Central bank interest rates should continue to rise, as the fight once morest inflation is a global issue.
The number of properties for sale is increasing but despite this the offer remains limited
On the supply side, RealAdvisor has seen a 10% increase in the number of properties available for purchase in 3 months. Still according to Jonas Wiesel “this is a new indicator of an easing in the real estate market”. Nevertheless, he notes that “supply remains very limited and well below what we observed 2 years ago. We do not imagine the number of objects put up for sale increasing significantly in the medium term, the number of building permit authorizations not increasing since 2014”.
Access to property has never been so difficult for 20 years
The speed at which the mortgage rate has evolved in 2022 is impressive (from 1.2% to 2.7% in one year). In addition to mortgage rates, consumer price inflation (+3.4% year-on-year) and energy prices (+25% year-on-year) are weighing down fixed household spending. In the medium term, this will have a real impact on the savings capacity of Swiss households and will disadvantage potential buyers seeking to raise the equity necessary to finance a property.
Access to property therefore seems less favorable today than it has been in recent years. In many cases, it is even more expensive in the medium term to buy a home than to rent it.