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Homeowners can expect an increase in interest rates in 2023. Own home in Zullwil SO.
Dorothea VollenweiderEditor Wirtschaft
The days of extremely low mortgage interest rates are a thing of the past. Buying is again more expensive than renting in many parts of Switzerland. Will the yield curve continue to tip higher in 2023?
There is a lot to be said for this. All the more so as domestic banks are expected to make further interest rate hikes in 2023. However, the curve will not point as steeply upwards as it has in the past 12 months.
The SNB interest rate rises again
“In 2023, most central banks, including the Swiss National Bank, are likely to hit their target level for key interest rates and then stall for the time being,” says Fredy Hasenmaile (55), a real estate expert at Credit Suisse.
“We expect the SNB interest rate to rise to 1.5% by March 2023”Ursina Kubli (43), senior real estate expert at ZKB
“We expect the SNB’s key interest rate to rise to 1.5% by March 2023,” says Ursina Kubli (43), senior real estate expert at Zürcher Kantonalbank. This is currently 1%.
Increase in interest rates to reduce mortgages
As the markets have already anticipated some rate hikes, both CS and ZKB expect only a slight increase in long-term mortgages in 2023.
However, Saron mortgages will keep pace with rate hikes by the National Bank. “Saron mortgages will see the biggest increase at the short end of the yield curve,” says Hasenmaile.
CS estimates they will likely rise to 2 or 2.5%. This reduces the previously high savings potential of the Saron mortgage compared to a fixed-rate mortgage. A 10-year fixed rate mortgage is likely to be around 2.8% a year from now.
Saron is getting more expensive
One thing is certain: in the future, homeowners will no longer be able to save money as before. “Depending on spending behavior, this can lead to adjustments of other important budget items,” says Hasenmaile.
Homebuyers must therefore be prepared for higher housing costs. But there is also good news: the queue of potential buyers will be shorter in the future than when interest rates were negative. Experts estimate that the marketing period will be longer again.
Buyers can take their time
If you are looking for a home of your own, you can take more time to carefully examine the property and surrounding area. “Previously, there was often hardly any time for this due to enormous time pressure,” says Kubli.
Real estate experts are not expecting a collapse in home prices. Demand is expected to remain intact so homeowners continue to get a good selling price. Conversely, if you want to buy, you continue to pay a high price.
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