Switzwerland’s Residential Real Estate market is finally slowing down
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After 15 years of efforts the #Swiss #government
finally managed to interrupt the #house #price
rise and give a break to #Switzerland
’s overheated #residential #property #market
. Q1 of #2019
registered the seventh year to year consequtive quarter of house prices decline, with a -2.05% drop.
The Swiss #property
market’s slowdown is mainly due to an overall decrease in both domestic and foreign demand levels. In particular, it can be seen how, on the Domestic demand side, the key factor has been the restrictive policies implemented by the Swiss #National #Bank
. Restrictions and harder lending criteria were properly designed to decrease the volumes of #loans
garanted and of housing debt (mortgages - which currently amounts to 90% of all household debt). On the foreign demand side instead, the key factor was the 2015 Swiss decision to abandon its #currency
cap against the euro which led to Swiss real estate properties to become much more expensive for foreign #investors
, thereby reducing the levels of demand.
On the #rent
side, rental yields tend to set around 3.3% per year, a quite low rate, especially if compared to other major European cities.
is confirmed to be the most expensive #city
, with average prices per square meter established around €11,467.
The future of Swiss #RealEstate
market is clearly correlated to the performances of Swiss #economy
and for this reason seems to be bright (despite the current slowdown). This #news
might not be particularly positive for the Swiss government, which, especially on the long run, will have to find other ways to avoid overheating of its residential market.
Do you think that a buy and hold investment strategy can be more profitable than others in the Swiss Real Estate market?
in the comments below