Housing prices in Switzerland have been rising since last year
Last year the real estate market in many countries was in decline, but in some states the pandemic had almost no effect on the situation, and the segment continued to grow. A striking example is the housing in Switzerland, where the purchase and rental prices have only increased. This trend is continuing this year as well.
While initially analysts predicted the decline of the real estate market in the country in 2020, by the end of the year it was clear that the cost of objects continues to grow in spite of everything. During the previous period, the price of houses increased by 5.6%, and apartments – by 5.5%.
Experts explain this trend quite simply. During the crisis, investors are primarily looking towards the most secure assets, which is residential real estate. Accordingly, the increased demand increases the value of these objects. The pandemic, quarantine restrictions and the instability of the economy made many people rethink their priorities. They felt an acute shortage of space, and began to look for options to expand their living space. The market reacted to such a demand by increasing the prices for rent and purchase of real estate.
As for this year, the rise in prices for housing is observed now, but not at the same rate as in the last period. In 2020, the average rent increased by 1.1% in Switzerland. The greatest rise in prices was near Lake Geneva, where rates rose by 2.5 percent. In the central part of the country, the figure rose by 1.6%, but in Ticino, on the contrary, the cost of rents fell by 1.5%.
Zurich and Lake Geneva are the leaders in property prices. Here, objects are about 22 and 15% more expensive than in other regions of Switzerland. Cheaper homes can be rented in the eastern and central regions, where the rates are lower by 10-12% compared to other parts of the country.
Experts note that over the past 10 years the cost of houses in Switzerland rose by 20%, apartments during this period rose in price by 30%.
Despite the rise in prices, the real estate market in the country for several years now shows the slowdown. The reason for this was the tightening of the rules for lending by the Central Bank. They were revised in order to reduce mortgage arrears. In addition, in 2015, the minimum threshold for the exchange of local francs into euros was abolished. Such changes made Swiss real estate more expensive for foreign investors, which had a negative impact on demand.
Now the yield on real estate rents in the country is about 3.27%. In this case, a square meter apartment in Zurich costs on average 11,470 euros.