The overheated real estate market certainly seems to be calming down. The Swiss Real Estate Offer Index, compiled by the Swiss Marketplace Group (SMG) in collaboration with real estate consulting firm IAZI, clearly demonstrates this.
Accordingly, prices requested for single-family homes were on average 0.9 percent lower last month, the first noticeable decline in a long time. However, with an average price per square meter of around CHF 7,370, the price level is still very high.
November brought almost no change in condominium prices, still a minor price increase of +0.2 percent.
What is the Central Bank doing?
Will the Swiss National Bank (SNB) go a step further with its next rate decision in mid-December? “Although inflation has stabilized at a relatively low level, it is still well above target value,” explains Martin Waeber, Managing Director of SMG Real Estate. Therefore, further increases in the key interest rate are possible. This will increase the cost of the mortgage. This depresses prospective buyers.
The reference interest rate for leases – that is, the average interest rate for all mortgages in Switzerland – will remain at 1.25% for now. Rents are likely to increase by up to 3 percent in some tenancies, with the increase expected in the spring of 2023.
Asking for a little lower rent
After several months of increases, rents requested fell slightly by -0.6 percent in November. These are rental prices on apartment portals. However, the development of rental prices varies by region. Rents demanded fell more sharply in central Switzerland (-2.1%) and the greater Zurich region (-1.3%). There is little or no change in the Central Plateau (-0.3 percent), the Lake Geneva region (-0.2 percent), and Eastern Switzerland (0.0 percent), while in Northwest Switzerland (+0 percent). ,4), and Ticino saw an increase (+1.0 percent) while asking for rent.
Detailed information and statistics on developments throughout Switzerland can be found at this link. (rae)