Swiss luxury real estate is no longer a sure-fire success, according to UBS
Published: Tuesday, Mar 26th 2024, 14:30
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Luxury real estate has become significantly more expensive in Switzerland. According to UBS, this is having an impact on demand.
The "reality of higher interest rates" in particular affected the luxury segment last year and led to greater restraint, according to the "UBS Luxury Property Focus 2024" published by the UBS Chief Investment Office on Tuesday.
This means that the price boom in the Swiss luxury segment is likely to peak in 2022 with a price increase of almost 10 percent. Last year, the prices of luxury homes "only" rose by a good 2 percent on average.
According to UBS, the luxury real estate market performed "somewhat weaker" than the market as a whole. However, the general price level in this segment is still 25 percent above the pre-corona level.
Fewer incentives to buy
However, UBS continues to believe that the "safe haven" of Switzerland, with its stable institutions and high standard of living, has an "unbroken appeal" in the current geopolitical situation. However, the strong franc and the price trend are likely to have a detrimental effect on international demand for Swiss luxury real estate in the longer term.
Even now, advertised properties are attracting fewer interested parties. "If sellers are under time pressure, they may have to accept discounts," it says. A slight decline in luxury real estate prices in the low single-digit percentage range is therefore expected for the current year.
©Keystone/SDA
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