Turnaround on the housing market
Home prices have fallen for the first time in decades
Finally there is movement in the overvalued Swiss real estate market. In the last three months, transaction prices have fallen by 0.2 percent.
Published: 17 minutes ago
Updated: 4 minutes ago
Transaction prices for single-family homes fell by 0.2 percent in the last three months. Detached houses in the old town center of the municipality of Rafz ZH.
Dorothea VollenweiderEditor Economics
For 20 years, Swiss house prices have only known one direction: upwards. That’s over now. For the first time in decades, home prices not only stagnated but actually fell in the last quarter.
According to real estate consultants Wüest Partner, transaction prices for single-family homes have fallen by 0.2 percent over the past three months. This is tantamount to a trend reversal. Because in 2022 house prices rose by 5.5 percent, in the last three years by 20 percent and in the last 10 years by as much as 44 percent.
No seasonal effect
“The market environment suggests that this is more than a seasonal effect,” says Robert Weinert (44), real estate expert at Wüest Partner. Weinert anticipates that prices for single-family homes and condominiums will continue to stagnate this year and in some cases will decline slightly.
Transaction prices have also stagnated for condominiums. Transaction prices differ from sales prices. This is not the advertised price, but the amount that the seller has agreed with the buyer before the transfer of ownership takes place.
Market environment depresses prices
The reason for the stagnation and decline are several factors that have caused uncertainty and additional costs among home buyers in recent months. On the one hand, mortgage interest rates rose sharply in 2022. At the same time, real estate prices remained at a very high level.
“In addition, the private assets of many households have recently been declining,” says Weinert. According to the real estate expert, the demand for home ownership has decreased in recent months.
The fact that the supply in Switzerland is thin has a stabilizing effect on prices. Nothing will change about that anytime soon. Because in Switzerland there is a lack of building land. Homes remain a rare commodity. There won’t be a sell-out any time soon.