Single-family house prices up by a quarter in five years
Published: Tuesday, Mar 26th 2024, 11:21
Updated At: Tuesday, Mar 26th 2024, 12:11
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For many people, the dream of owning their own home is moving further and further away. According to an analysis by Zürcher Kantonalbank (ZKB), the price of single-family homes in the canton of Zurich has risen by a quarter in the last five years alone.
They are now at a level "that is unaffordable for the vast majority of young families", said Ursina Kubli, Head of Real Estate Research at ZKB, at a media conference on Tuesday.
In its latest "Immobilien aktuell" study, ZKB evaluated all single-family homes in the canton and compared them with prices retrospectively as at 2018. The cantonal bank examined a total of 102,947 properties.
Factually unaffordable
One finding: the more expensive the municipality, the higher the price growth. Prices in the city of Zurich, for example, have risen by 35% or CHF 690,000 since 2018 and now stand at an average of CHF 2.7 million for a detached house. Around Lake Zurich, the price of more than one in ten detached houses (12%) has even risen by over a million francs.
And "affordable" houses worth less than one million francs are becoming increasingly rare. While there were still over 25,000 properties in this price category in 2018, the number last year was 7800 single-family homes.
The hurdles to buying your own four walls are therefore getting higher and higher. Kubli gives an example calculation for single-family homes with an increase in value of one million francs: "In order to meet the usual financing criteria, prospective buyers would have to bring in 200,000 more assets and earn 160,000 francs more per year compared to five years ago."
No easing in sight
"Young couples are therefore increasingly being left behind," Kubli continues. The ZKB also compared property prices with anonymized tax data from the canton of Zurich.
The result: while 13% of the population were still able to afford a "mid-priced" property in 2018, 9% still had the financial means to do so in 2023.
Moreover, a price collapse is not in sight. For 2024 and 2025, the real estate experts at ZKB expect prices for residential property to rise again by 3% per year.
"We are therefore miles away from falling prices," explained Kubli. In the meantime, prices of over CHF 3 million per detached house are "no longer a rarity": the stock is too low in view of the continuing very high demand.
Tenants also under pressure
However, according to Kubli, the "pressure points on the real estate market" are not only increasing for owner-occupied homes. Of course, tenants are also feeling the market situation. In the canton of Zurich alone, 20,000 additional residents moved in last year with a need for 10,000 additional apartments, while construction activity stagnated at the same time.
The real estate experts at ZKB therefore expect another 4.5% increase in asking rents in the canton of Zurich in the current year. Across Switzerland, the increase in rents is unlikely to be much lower at 4 percent.
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