The decline in real estate prices is limited: “Control interest rates have already passed the peak”

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According to the current analysis of Raiffeisen Switzerland, detached houses became cheaper, but apartments had to pay more in the last quarter.

In particular, prices of single-family homes fell by 1.0 percent in the fourth quarter of 2023 compared to the third quarter of 2023, the bank said on Wednesday. In contrast, condominium prices increased by 1.7 percent. For the year, single-family homes still cost 2.2 percent more than in 2022, and even condos rose 5.9 percent.

Outlook for the first quarter

“The falling prices of detached houses at the end of the year give a preview of 2024,” says Raiffeisen chief economist Fredy Hasenmaile. In the current year, negative signs can be expected in one quarter in terms of price dynamics in both segments of the domestic market.

But overall, price declines will likely be kept within narrow limits, “because mortgage interest rates have already passed their peak,” the expert said.

Major regional differences

There are sometimes huge differences when it comes to individual regions and types of communities. While condominium prices are rising strongly in all regions, particularly in Central Switzerland (+13.5%) and Zurich (+9.6%), the picture for detached houses is more mixed.

In 2023, prices increased by 7.9 percent in the Lake Geneva region and 6.3 percent in central Switzerland. On the other hand, there was a decrease in Zurich (-0.5%), southern Switzerland (-0.5%) and northwestern Switzerland (-0.4%).

When looked at by neighborhood types, apartments in urban settlements were the most popular with a price increase of 6.6 percent, while the smallest increase was recorded in the centers with 3.8 percent.

By contrast, house prices in tourist communities fell 2.7 percent in a year. In other municipalities, home buyers had to dig deeper into their pockets, especially with the increase in prices in the centers (+6.3%). (SDA/uro)

Source :Blick