Trees in the real estate market no longer grow to the sky. Sellers have become more cautious, giving up the maximum return on the detached homes they are putting on the market. This is demonstrated by the Swiss Real Estate Proposal Index. This fell for the second time in a row in November, revealing a noticeable drop in the prices of single-family homes.
Is this the reversal of the trend in the real estate market, will the decline in prices accelerate in the coming months? “No, it’s not a trend reversal,” says Robert Weinert, 44, research co-head of real estate consulting firm Wüest Partner. “Prices are not in free fall, many price indicators point to a stable market.” Claudio Saputelli (53), Head of Real Estate Analysis at UBS, speaks of a “solid market” and adds: “The numbers are surprisingly good right now, it takes a few months of negative growth rates before we can talk about any downward growth trend.”
Rising housing costs for all
Donato Scognamiglio, 52, president of real estate consulting firm Iazi, doesn’t want to dramatize the issue either, but says, “Now the rules of the game are changing in the real estate market.” As the environment changes, mortgage rates and ancillary costs rise, inflation depletes the budget. “People are slowly realizing that it will be more expensive if I buy it.” Housing costs are rising not only for tenants but also for landlords.
In addition, there is uncertainty about the future development of the economy. Too many question marks and too much uncertainty to really consider buying a home in peace. Potential buyers are becoming more cautious, calculating more precisely whether renting will be better than buying.
cold symptoms
Homeowners willing to incorporate all of this into their offerings, so prices are dropping a bit – or at least not rising to the extent known to date. During the Corona period, there were price increases of up to ten percent in a year in certain regions.
However, there are already slight signs of cooling. “Demand has decreased a little while the supply of property has increased slightly,” said Weinert von Wüest Partner. Saputelli from UBS goes one step further and talks about his experiences with customers: “Demand has dropped significantly. The number of reservation contracts fell by 60-70 percent.”
Those willing to buy will no longer queue to purchase the item of their choice. Conversely, this also means that sellers can no longer raise prices as they wish.