Above all, private investors are at risk
When interest rates rise, the value of a property falls as investors are lured by other investment opportunities. Bonds, with which you can earn 1.5 to 2 percent again without risk and thus almost as much as with investment properties, are again an attractive alternative.
In addition, a sale under pressure could be difficult. Interest-bearing securities not only involve less effort, they can be turned into money more quickly and much less complicated if necessary.
Since many apartment buildings were bought at extremely low returns, some owners could now be in trouble. This applies above all to private individuals who have bought real estate in the past in order to rent it out and to avoid the zero interest on the savings account. This is especially true if they are tightly financed with equity and cannot afford the higher interest payments.
According to the Federal Statistical Office, more than half (56%) of all apartment buildings are privately owned. Institutional investors such as pension funds, funds or insurance companies are less or hardly at risk. According to the BFS, institutional investors “only” own a fifth of all investment properties.
2023-07-08 23:12:49
#slump #real #estate #prices #Switzerland
