Rising costs and interest rates depress sentiment on the housing market
Published: Tuesday, May 28th 2024, 07:20
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Inflation and rising interest rates are leaving their mark on the Swiss real estate market. While tenants are confronted with rent increases and higher ancillary costs, the costs of energy, repairs and interest are rising for residential property. Despite high prices, the dream of owning a detached house in the countryside is still widespread.
According to the annual Wohntraum study by Helvetia and Moneypark, two thirds of homeowners and well over half of tenants (58%) are feeling the effects of the interest rate turnaround initiated by the Swiss National Bank (SNB). For tenants (42% of respondents), the higher reference interest rate and rising rents are the main issue.
Fear of rising interest rates
Among homeowners, many (28%) fear higher mortgage rates when their mortgage is up for renewal. Or they are already paying more interest because of the recent renewal (28%) or the more expensive Saron mortgage (16%).
Inflation is also hampering investment. 23 percent of the homeowners surveyed said they would spend less money on them and 15 percent wanted to postpone them until later. Five percent are even canceling planned work. There is less focus on the construction of solar systems. In contrast, more is to be invested in the garden. Bathrooms, kitchens and sun protection also remain popular.
Single-family home remains in demand
Despite high prices and rising interest rates, the detached single-family home remains the number one dream home for more than half of those surveyed. The dream property is in a green, quiet location, has an outdoor area and is well connected to public transport. In second place comes a condominium in an apartment building (27%).
However, the intention to buy has decreased among tenants, according to the report. A large majority expect property prices to continue to rise. The dream of owning their own home is still intact for 55% of tenants, compared to two thirds in 2020.
At the same time, homeowners are increasingly thinking about selling their property, for example to benefit from the increase in value (17%) in recent years and to reduce their costs. However, the most frequently cited reason for wanting to sell remains that their home has become too big (25%).
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