The Real Estate Risk Index (RERI), calculated by Moneypark, remained at 3.5 points in the third quarter of 2022. It’s been there since the first quarter. That’s why the barometer is still on the verge of “moderate risk” to “slightly increased risk,” as noted in a statement Wednesday.
Moneypark experts, in their quarterly analysis, do not assume that the economic slowdown in Switzerland will result in a recession. In the case of real estate, only a moderate correction in prices and therefore only slightly higher risks can be expected. Major riots are said to be unlikely.
No real estate crisis
Potential property buyers will be willing to pay less, but Moneypark goes on to say that Switzerland didn’t cause the property crisis either. Because demand is supported by population growth and clearly exceeds supply. Challenges such as rising material and energy costs and labor shortages must also keep construction activity and supply in check.
Meanwhile, property owners and buyers are finding it increasingly difficult to budget their financing costs due to rising interest rates. In the process of increasing the interest rates of fixed-rate housing loans, housing loans based on the money market, namely Saron housing loans, gained importance. But these will also rise as a result of further interest rate hikes, and switching to a fixed-rate mortgage can be expensive, according to Moneypark. (SDA/uro)