Prices of detached houses in the country are falling sharply

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Rising mortgage interest rates have made buying a home much more expensive for Swiss people. So far, home prices have remained high. This is changing now. Demand for home ownership has dropped significantly.

Demand continued to decline in early 2023, according to a study by Credit Suisse. Related demand indices have dropped as much as 22 percent for condominiums and 27 percent for single-family homes since their peak during the Covid 19 pandemic. According to CS, they are now back below the 2019 level.

Demand falls, prices fall

However, the current housing supply continues to remain low, despite a slow increase in the first quarter.

And the latest figures from the Federal Statistics Office (BFS) show that falling interest in home ownership is causing prices to plummet. After three consecutive increases, the first downward correction took place in the first quarter of 2023. Swiss housing price index decreased by 1.2 percent compared to the previous quarter to 114.6 points in the January-March 2023 period.

These communities were most affected

Condominium prices, which fell by 1.1 percent and detached house prices, which fell by 1.3 percent, were effective in this decrease.

The value of single-family homes in rural communities fell particularly sharply. There was a 4.5 percent price reduction in the last three months. These include Bauma ZH, Affeltrangen ZH, Neckertal SG, Entlebuch LU, Rapperswil BE and Hasle LU.

Price increase on Agglo

In contrast, prices continued to rise slightly in urban agglomerations. Prices for condominiums have dropped across all community types.

However, the decrease in prices is only valid compared to the previous quarter. Compared to the previous year, the value of the residences increased. And it’s 3.9 percent, as BFS announced on Tuesday.

FSO’s residential property price index is a relatively new indicator. It has only been published quarterly since the third quarter of 2020. According to BFS, it is calculated on an average of around 7,000 transactions from all regions of Switzerland. The FSO draws data from the 25 largest mortgage institutions in Switzerland. Since the vast majority of real estate purchases are financed by mortgages, they are said to cover a very large market share. (SDA/dvo)

Source : Blick