Homeowners must expect rising interest rates in 2023. Own home in Zullwil SO.
Dorothea VollenweiderEditor Economics
The days of ultra-low mortgage interest rates are a thing of the past. Buying is again more expensive than renting in many parts of Switzerland. Will the yield curve continue to point higher in 2023?
There’s a lot to be said for it. Especially since it is expected that the national banks will make further interest rate hikes in 2023. However, the curve will not point quite as steeply upwards as in the last 12 months.
The SNB interest rate rises again
“In 2023, most central banks – including the Swiss National Bank – are likely to reach their target level for key interest rates and then pause for the time being,” says Fredy Hasenmaile (55), real estate expert at Credit Suisse.
“We expect the SNB interest rate to rise to 1.5 percent by March 2023”Ursina Kubli (43), senior real estate expert at ZKB
“We expect the SNB key interest rate to rise to 1.5 percent by March 2023,” says Ursina Kubli (43), senior real estate expert at Zürcher Kantonalbank. This is currently 1 percent.
Interest rate hikes for mortgages abating
Because the markets have already anticipated some rate hikes, both CS and ZKB expect only a slight increase in long-term mortgages in 2023.
However, the Saron mortgages will keep pace with the rate hikes by the National Bank. “The Saron mortgages will experience the greatest increase at the short end of the yield curve,” says Hasenmaile.
CS estimates that they are likely to rise to 2 or 2.5 percent. This reduces the previously high savings potential of the Saron mortgage compared to a fixed-rate mortgage. A 10-year fixed-rate mortgage is likely to be around 2.8 percent a year from now.
The saron is getting more expensive
One thing is clear: in the future, homeowners will no longer be able to put money aside in the same way as before. “Depending on spending behavior, this can lead to adjustments to other major budget items,” says Hasenmaile.
Homebuyers must therefore be prepared for higher housing costs. But there is also good news: the queue of prospective buyers will be shorter in the future than it was when interest rates were negative. Experts estimate that the marketing period will be longer again.
Buyers can take their time
If you are looking for a home of your own, you can take more time to examine the property and the surrounding area carefully. “Previously, there was often hardly any time for this due to the immense time pressure,” says Kubli.
The real estate experts do not expect a slump in house prices. Demand is still expected to remain intact, so that homeowners will continue to achieve a good selling price. Conversely, if you want to buy, you continue to pay a high price.
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