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The traditional Swiss family house is clearly different from the central locations; The word “bünzlig” is circulating here and there. However, the value evolution of single-family homes compared to apartments over the last few years has been impressive.
According to a study by economists Matthias Holzhey and Katharina Hofer from UBS Switzerland, between the end of 2014 and the end of 2022, prices increased cumulatively by 27 percent, thus increasing by about 10 percentage points more than apartments. With the demand for space increasing as a result of the pandemic and hybrid work, the single-family home is becoming more and more “fashionable” again.
Therefore, living in this way of life is increasingly perceived as a luxury and eventually gains relevance as a status symbol. “In the long run, this will increase the value of single-family homes. But from a regional perspective, this applies primarily to service areas of large cities,” the authors write.
UBS economists observe several trends that have led them to make this assessment. On the one hand, there is the fact that the stock of single-family homes has increased only moderately. This is significantly slower than in the past. According to the big bank, this decline in growth is likely to continue and even lead to a reduction in the total number of single-family homes. longer term.
One reason for this is the downward trend in new construction of single-family homes in green areas. Single-family homes require more building space per housing unit and are therefore more expensive in absolute terms than condominiums on the same property. With the demolition of single-family houses and the replacement of multi-family houses, the concentration reaches serious levels.
In the past, this effect was still relatively small. Even in the city of Zurich, where the highest concentration gains in Switzerland are tempting, only 1 to 1.5 percent of existing single-family homes are converted into apartments each year since 2019. However, with increasing usage rates, this development is likely to accelerate not only in urban areas but also in other regions.
It’s too early to say goodbye to the single family home
According to Robert Weinert, Wüest Partner Research Manager, it is still unclear how much concentration in rural areas will increase. It is undisputed that the number of apartments in multi-family houses will increase much more than the number of single-family houses in the medium and long term.
“Still, single-family homes are not a discontinued model. In many parts of Switzerland, particularly in rural areas, single-family homes will dominate local markets,” Weinert writes when asked by Cash.ch. Moreover, the dream of owning a single-family home is and will remain a lifelong dream for many households.
It would be a bit premature to conclude that there is a huge wave of sales for single-family homes. The high level of education and income of the baby boom generation means they hardly have to limit their housing consumption after reaching retirement age. Currently, only 3 to 4 percent of people over 65 move homes each year.
Experts spot an interesting trend
According to UBS economists, homes are being kept longer as life expectancy increases and health status improves; this eliminates the need to leave the familiar environment. As a result, the single-family home is becoming an even rarer type in the transaction market and increasingly a “family heirloom”.
Weinert confirmed that single-family homes will be scarce in Switzerland in the medium and long term as Switzerland is committed to more intensive residential development. This should stabilize prices and tend to increase them in the long run.
Wuest Partner, on the other hand, sees an interesting trend elsewhere: “The segment of affordable detached houses, which have been very small so far and can be built, for example, in modules and at the same time take up less space, will become important as demand in this segment grows.”
Source :Blick
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.
