Categories: Market

Property bubble risk is waning: Why isn’t falling house prices the reason this time?

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Rising rents are having a positive impact for once.

The risk of a bubble forming in the Swiss housing market has decreased slightly in the third quarter of 2023. However, this was not because prices fell, but because rents increased.

The so-called UBS Swiss Property Bubble Index fell to 1.41 points (from 1.43) in the third quarter of 2023, the big bank announced on Wednesday. This means that the domestic market remains overvalued relative to its historical development.

More about the real estate industry
Housing price index
Owning a home is getting expensive again
Houses are too expensive for citizens
The Swiss are also displacing the Portuguese and Spanish
Apartments are also more expensive
Rents continue to increase rapidly in October

The increase in house prices in the third quarter was 0.7 percent, comparable to previous quarters. Meanwhile, asking rents increased by 2.8 percent, according to UBS. This meant that the price-rental ratio dropped significantly.

Significant increase since 2020

In its risk assessment, the bank points out that the index is significantly lower than the level during the housing bubble of the early 1990s. However, the index has risen significantly since mid-2020 and now shows clear overvaluation in the domestic market. Sunday, especially on Lake Zurich, parts of Graubeğen, St. It sometimes gets too hot in the Gallen Rhine Valley and the Lausanne area.

The UBS Swiss Property Bubble Index consists of six smaller indices. These are housing prices relative to annual rents, consumer prices, household income as well as mortgage volume relative to household income, construction activity relative to gross domestic product, and the demand for loan applications for investment properties. (SDA/wgr)

Source :Blick

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