In Zurich and its region, only 34 single-family houses were under construction in the first half of 2021 (archive). KEYSTONE / GAETAN BALLY sda-ats
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–This content was published on November 11, 2021 – 12:38
(Keystone-ATS)
The lack of liquidity in the Swiss real estate market, combined with strong demand following the Covid-19 pandemic, is pushing up the prices of residential properties, especially those of single-family homes.
According to the real estate services group Cifi, home ownership remains more difficult than ever for individuals in Switzerland.
In a study published Thursday, the Zurich company underlines the paradoxical situation of the Swiss real estate market, where buying a house has never been so expensive despite interest rates located at historic lows for several years. In 2020, prices for this category of property climbed 5.8% on average, the strongest growth since 2013.
Globally, an increase of 5.1% was observed last year for Swiss real estate, an increase not recorded since 2014. The so-called peripheral regions – either the Jura, the Grisons or the cantons of central Switzerland – have visibly experienced soaring.
Confirming a trend described many times by real estate experts, the Cifi study affirms that the health crisis has boosted the demand for more spacious housing, with a view to improving the quality of life. The construction of new housing did not follow, further hampered by the closures of construction sites during the pandemic.
Less advantageous rental
Regional differences are significant, even for the main cities of the country. In Zurich and its region, only 34 single-family houses were under construction in the first half of 2021, explains the Zurich group. On the Geneva side, the erection of more than 1000 properties was counted. For the market as a whole, 484 objects were under construction for the greater Zurich area and 1,423 for that of Geneva.
The context is much more relaxed for properties offered for rent, with an offer more suited to demand. Cifi reminds however that the purchase remains more advantageous in the long term. In Zurich, the company calculates a monthly charge of 2,165 francs including mortgage, maintenance and taxes related to a 115 square meter property valued at 1.75 million francs. Renting such a property would cost 2945 francs per month, or 780 francs more.
For yield real estate, private investors are taking more and more risk due to increasingly poor performance, a situation to which the Swiss National Bank (SNB) regularly draws attention, recalls Cifi, which holds Thursday its annual “financial and real estate” congress.
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