Scarce supply, high costs: this is how flat rents will rise next year

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After the boom in recent years, the Swiss real estate market is heading towards a soft landing. Credit Suisse economists write that real estate prices will not fall despite high mortgage interest rates.

However, only homeowners can expect a soft landing. Meanwhile, tenants must prepare themselves for turbulence.

House prices remained stable

Demand for home ownership falls as mortgage interest rates rise, CS economists wrote in a study published Tuesday. At the same time, the housing supply is only slowly increasing due to the previous scarcity.

By the end of 2023, economists at Credit Suisse expect condominium prices to increase by 0.5 percent and for single-family homes by 1.5 percent.

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However, from 2024, price decreases can be expected in the low single-digit percentage range per year. Therefore, price corrections are manageable. Prior to that, the value of owner-occupied residences had increased almost continuously for 21 years.

Rental flats are running low

In the rental housing market, the current flat supply is rapidly decreasing and gradually decreasing. This is particularly the case in the Zurich agglomeration.

CS economists note that finding an apartment has become much more difficult. However, the term “housing shortage” exaggerates the current situation in many regions.

Rent increased by 10%

However, the number of vacant flats will continue to fall, which will increase rents. In 2023 alone, market rents are likely to increase by almost 3 percent on average.

And tenants are in bigger trouble: the rising benchmark interest rate will cause rents to rise as much as 10 percent. Because CS economists expect a second increase to 1.75 percent in December after the 1.5 percent step in early June. (SDA/dvo)

Source :Blick

Tim

I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.