Prices for residential property likely to remain stable
Published: Wednesday, Nov 8th 2023, 13:01
Updated At: Thursday, Nov 9th 2023, 00:54
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Prices for residential property in Switzerland are likely to remain stable over the next 12 months. Residential rents, on the other hand, are likely to rise. Meanwhile, the outlook for investment properties and office rents is much more negative.
Among the 873 real estate market experts surveyed from all over Switzerland, optimism regarding the price development of residential property has evaporated, writes Fahrländer Partner Raumentwicklung (FPRE) in the semi-annual survey published on Wednesday.
The price expectation index for condominiums surveyed by FPRE is therefore at -9.1 points in fall 2023, while that for single-family homes is at +1.8 points. This is the lowest value for condominiums since spring 2020 (-16.0 points) and for single-family homes since spring 2017 (+0.4 points).
According to the data, the majority (58%) of respondents expect prices for condominiums to remain stable over the next 12 months, while 16% expect prices to rise or rise sharply and 25% expect prices to fall. For single-family homes, 58% also expect prices to remain stable, while 22% forecast higher prices and 21% lower prices. The survey was conducted between mid and end October 2023.
The index for residential rents has currently fallen to +68.3 points from +80.8 points in spring 2023, although this is still well above the average of the past 10 years (-2.2). 69% of participants expect rents to rise in the next 12 months, 28% expect them to stagnate and 3% expect them to fall. The respondents mentioned the shortage of supply, immigration and general inflation as price drivers.
Negative expectations for investment properties and office rents
The assessment of the performance of multi-family houses has deteriorated further, writes FPRE. The corresponding index fell to -33.7 points from -7.3 points in the spring, its lowest level since 1996. The rise in interest rates is particularly noticeable in this segment, according to the report. The index for apartment buildings is most negative in the Basel (-57.6 points), Jura (-49.0) and Eastern Switzerland (-42.0) regions.
At -34.7 points, the price expectations index for office rents was also lower than six months ago (-19.7). The assessment of transaction prices for office and commercial properties also became more pessimistic: the corresponding index stood at -54.2 points (-38.6) in the latest survey.
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