immo!nvest – Die Plattform für Standorte und Immobilien

Category: Business

  • “Buy-to-let” A model calculation from the perspective of private investors

    “Buy-to-let” A model calculation from the perspective of private investors

    “Buy-to-let provides Swiss private investors with a way to participate in the real estate market and has enjoyed growing popularity in the wake of the low interest rate environment. The share of rented condominiums and single-family houses accounted for 17.0% of all newly concluded residential property financing in 2019 on a volume-weighted basis. This means that almost every sixth property was purchased with the intention of subsequently renting it out. In most cases, investments are made in condominiums and thus in smaller lot sizes due to the financial assets available.

    The aim of the final thesis was to show private investors the main risks associated with a buy-to-let investment and to establish a relative comparison with alternative capital market investments. To this end, an investment analysis model was developed that looked at the profitability of a 3.5-bedroom condominium from its purchase in 2000 to its sale in 2020. Based on studies in various markets in the Bern area and by means of different sensitivities regarding the use of debt capital, their effects on the profitability ratios were illustrated.

    Result
    Risky investment strategy: With regard to the holding phase, it became clear that in particular the choice of the degree of debt financing and the prevailing interest rate level determines the achievable return on equity and at the same time also forms the highest expenditure item. In the first years of the holding period, a high leverage ratio of 75% and an average interest rate of 3.70% resulted in exclusively negative net returns. With regard to the sale of the property, it became apparent that the value development was the most significant determinant for the success of the buy-to-let investment (see Fig. 1). The potentially realisable market value is subject to cyclical fluctuations. Combined with an increased leverage ratio and the associated debt risk in terms of rising interest rates and possible losses in value, these factors constitute the main risk of the buy-to-let investment. If, in addition, a large proportion of the assets is tied up in a single property, this creates a considerable cluster risk, which is further increased by the effect of rising interest rates and losses in value. It is important to note that passing on rising interest rates to the tenant is only possible to a limited extent due to legal restrictions and the sluggishly reacting reference interest rate. In addition, higher interest rates are usually accompanied by rising inflation rates. Since residential rents are usually not fully linked to the consumer price index, inflation leads to a partly real reduction in rental income.

    Fig. 1: Composition of IRR, using the example of the city of Bern.

    The consideration of the different markets – depending on the location of the property – also made it clear that the regional disparities can lead to large differences in the profitability and investment risk of the private investor and represent a further risk for the buy-to-let investment. With regard to the value retention of the property, the private investor should therefore primarily assess the location quality and the property.

    Comparison of capital market investments
    The comparison with the two asset classes Swiss equities and Swiss government bonds showed that the buy-to-let strategy could certainly represent an attractive alternative (cf. fig. 2+3). It was possible to further improve the return on the property over the period under consideration by using debt capital, but this was accompanied by a significantly higher risk (see Fig. 3). It should also be noted that the risk-return characteristics must be extended to include the variable of liquidity: In a weak economic environment, the sale of a property is only possible under timely circumstances and is usually associated with financial losses.

    Fig. 2: Annual returns on equities and bonds, observation period 2000-2020.

    Conclusion
    The decision for a buy-to-let investment should not be made lightly. A property purchase financed out of a lack of alternative asset classes and low financing costs often does not take into account the risks assumed at the same time. The property must remain effectively affordable in a higher interest rate environment and further capital gains should not be relied upon as an investment strategy. It can be concluded that rental income in particular determines the success or failure of the buy-to-let investment.

    Personal details
    Anissa Kühni, born 1991. Studied architecture at the Bern University of Applied Sciences, graduating in 2016. Master of Advanced Studies UZH in Real Estate, graduating in 2021. From 2016, active at Frutiger AG in project development for various site developments with a focus on “residential” as well as acquisitions. Since 2023 employed as project manager for real estate developments at Swiss Prime Site Solutions AG for the real estate fund “Akara Swiss Diversity Property Fund PK”.

  • Sika holds its own in a challenging environment

    Sika holds its own in a challenging environment

    In the first quarter of 2023, construction activity in the regions developed weaker than in the same period of the previous year. The causes are higher inflation, interest rate increases and the war in Ukraine. This is countered in the construction sector by the megatrend of climate change, which has heralded a paradigm shift in the industry. Solutions for lower CO2 emissions and for conserving resources in construction are increasingly in demand. Demand for industrial solutions, especially in the automotive sector, has developed positively. Sika is ideally positioned with its technologies in both markets to offer solutions that reduce customers’ carbon footprint.

    MBCC ACQUISITION ON THE TARGET STREET
    The MBCC acquisition is on the home stretch. In the first quarter of 2023, Sika signed a purchase agreement with private equity firm Cinven for parts of the MBCC admixture business. In 2022 this MBCC admixture business generated sales of approximately CHF 920 million. The acquisition is expected to close in the first half of 2023. The acquisition of MBCC is significantly value-enhancing. Together with MBCC, Sika will further expand its growth platforms. Annual synergies of CHF 160-180 million are expected.

    OUTLOOK FOR 2023
    For the current businessyear Sika is confident that the strategy of sustainable and profit-oriented growth can be successfully continued even in a challenging economic environment. With innovative technologies Sika is the preferred partner of many customers in the construction and industrial sectors. These sectors are strongly influenced by the megatrend of climate change as well as by increasing automation, digitalisation and easy-to-apply products.

    For the business year 2023 Sika expects sales growth in local currencies of 6-8% as well as a disproportionately high increase in EBIT (excluding the impact of the MBCC acquisition).

  • Investment market for commercial real estate collapses by 72 per cent

    Investment market for commercial real estate collapses by 72 per cent

    At 31 percent or €1.6 billion, the highest share of the transaction volume was accounted for by retail properties. C&W puts the decline compared to the first quarter of 2022 at 30 per cent. The relatively positive result for the retail sector is due not least to the sale of 49.9 percent of Berlin’s KaDeWe department store to the Central Group from Thailand as well as the increase in Deutsche Euroshop’s share in five German shopping centres.

    The transaction volume of office properties plummeted by almost 90 percent to 1.05 billion euros compared to the same period of the previous year. Only 2009 and 2011 had started the year even weaker in the previous 15 years. The majority of office properties sold in the first quarter were in the price range below 50 million euros. Value-add and core-plus properties dominated. Core properties and properties above 100 million euros remained the exception. For core properties in particular, the necessary downward price adjustment triggered by the turnaround in interest rates has not yet been completed, which is causing a widespread standstill in transactions in this sector. Buyers are focusing their attention primarily on value-add and core-plus properties in very good and central locations, not least with regard to compliance with ESG criteria.

    Logistics and hotel also down significantly
    Sales of logistics and industrial properties achieved a transaction volume of 795 million euros, 79 percent below the previous year’s figure. Two transactions of 100 million euros each supported the result, including the sale of the industrial and commercial park “Areal Böhler” in Meerbusch to Jamestown.

    Hotel sales recorded a 49 per cent decline in turnover compared to the opening quarter of 2022 to 180 million euros (share of 4 per cent). In the “Other” sector, which at 1.5 billion euros (minus 34 percent) is almost on a par with the transaction turnover of the retail properties, the sales of development properties dominated with 805 million euros.

    Few portfolio deals and restrained foreign capital
    The turnover volume attributable to portfolio deals posted both the lowest quarterly value and the lowest share (12 per cent) of the total transaction volume since the last quarter of 2011 with a minus of more than 90 per cent and a value of 630 million euros. The majority of portfolio sales were below 50 million euros. The largest and only portfolio in the three-digit million euro range was Deutsche Euroshop’s share increase in five shopping centres in Germany. Foreign capital was involved in the 1st quarter of 2023 with 34 percent, but is clearly below the more than 50 percent share of the past five years.

    Yields continue to rise
    The rise in yields triggered by the turnaround in interest rates in Q2 2022 continued unabated in Q1 2023. In the first three months, the averages of the respective prime values in the top 7 markets rose on average by 32 basis points to now 3.83 per cent for office properties, by 30 basis points to now 3.90 per cent for city centre commercial properties and by 15 basis points to 4.15 per cent for logistics properties.

    Munich is the most expensive office market with a top yield of 3.50 per cent, followed by Berlin, Frankfurt and Hamburg (each 3.80 per cent), Düsseldorf and Cologne (each 3.90 per cent). Stuttgart, at 4.10 per cent, has already exceeded the 4 per cent threshold. For commercial properties, Munich and Düsseldorf are at the top with values of 3.40 per cent and 3.50 per cent. Yields for logistics properties are quoted at 4.15 per cent in all seven top regions.

  • Assessment of the interest rate market in March by Avobis

    Assessment of the interest rate market in March by Avobis

    Fears of inflationary dynamics getting out of hand seem to be confirmed. In February, almost all nine CPI segments recorded price increases compared to the previous month. This is due to increasing prices for services and goods regardless of their origin (Figure 1). An easing of inflation is currently not in sight and with the first adjustment of the mortgage reference rate expected in June, inflation is likely to move further away from the SNB target. The market then adjusted its interest rate and inflation expectations significantly upwards, as can be seen from the strongly inverted yield curve.

    However, the problems at Silicon Valley Bank and later at Credit Suisse led to fears of a possible banking crisis, which pushed the inflation issue into the background. The concern that further interest rate steps by the central banks could cause a systemic collapse in the banking sector also led to a rethink in the Swiss interest rate market, causing market interest rates to correct sharply downwards. The takeover of Credit Suisse by UBS and the global injection of liquidity into the banking system subsequently partially alleviated fears. Ultimately, the SNB’s monetary policy decision on 23 March and its signal caused a certain disillusionment in the markets, whereupon the focus returned to the inflation problem and higher interest rate steps were thus again priced in.

    Although the swap curve at the end of the month is roughly the same as at the beginning of the month, the initial situation has changed noticeably, which is particularly evident in the higher expected interest rate volatilities at the end of the month compared to the beginning of the month.

    The impact of the banking turmoil on economic growth is uncertain. A decline in demand could dampen inflationary pressures. The impact on financing conditions is equally unclear, as banks may become more cautious and reluctant to lend. This would be similar to an interest rate hike in the fight against inflation. These effects now need to be monitored and assessed accordingly, which is why the swap curve implies only moderate interest rate steps for the next two meetings despite decoupled inflation.

    Our expectations
    Inflation in Switzerland has been decoupled from normal conditions. The Swiss franc as a monetary policy instrument to combat imported inflation is only effective to a limited extent in the fight against rising domestic inflation. Additional restrictive measures are therefore necessary. If the global financial system continues to prove robust, another 50 bps hike could be implemented at the next meeting. However, should further systemic risks emerge, a smaller rate hike or even a pause in interest rates could be considered. It is crucial to monitor the situation carefully and evaluate various scenarios comprehensively.

    Abroad
    Growing concerns about a possible banking crisis following the collapse of three regional banks in the US have prompted central banks to respond with liquidity injections. Nevertheless, a recent study suggests that the US banking system has unrealised losses of two trillion USD, which strongly questions the possibility of further interest rate hikes. Thus, while inflation remains unimpressed despite the unexpectedly rapid rise in interest rates, cracks are beginning to appear in the banking system.

    The rise in interest rates since last year has led to considerable losses in the value of mortgage-backed bonds and other virtually risk-free bonds, which make up a large part of banks’ assets. One study shows that the market value of the assets of the US banking system is two trillion USD lower than the binancial value. Combined with a high proportion of uninsured deposits at some US banks, loss realisations could threaten their stability.
    If half of the uninsured depositors were to withdraw funds, close to 190 banks would be potentially exposed to risk. This would also affect insured depositors, with potentially $300 billion of insured deposits at risk.

    Although the banking system is currently sound, there could be a lack of liquidity in the event of a bank run, leading to a cascading effect in loss realisation and ultimately jeopardising solvency. This could expose both American and other banks to a looming liquidity crisis. Therefore, the Fed, the ECB and other central banks are taking coordinated measures to strengthen liquidity.

    The market is already pricing in interest rate cuts for the Fed and only small interest rate steps for the ECB due to fears of possible systemic risks (Figures 5 and 6). The reasons for this are, on the one hand, the restrictive effect of the liquidity problem on lending and, on the other hand, the aggravation of the liquidity problem or even the emergence of systemic risks in other areas through a continued restrictive monetary policy. Both would lead to a decline in economic growth and thus a dampening effect on inflation. Thus, market-implied inflation expectations have not risen despite continued high inflation figures and falling interest rate expectations.

    Our expectations
    The current situation in the banking sector seems to have calmed down for the time being, but there is still a risk that the rapid rise in interest rates since last year could burden other areas of the financial system besides the banking sector. Therefore, we rule out further interest rate hikes for the time being. At the same time, however, we also consider interest rate cuts unlikely. Inflation is still too high and must be fought with a restrictive monetary policy. Moreover, besides the key interest rate, central banks have a wide range of instruments at their disposal to deal with problems such as liquidity difficulties. For these reasons, we expect the Fed to pause on interest rates at its next meeting and to keep a close eye on the situation surrounding the banks and the inflation trend in the coming months. For the ECB, on the other hand, we expect a rate hike of at least 25 bps due to the devastating inflation trend.

  • Stagflation and credit defaults – chasing yields gives way to minimising risk

    Stagflation and credit defaults – chasing yields gives way to minimising risk

    Flight to safety
    There will therefore be a shift in real money. Whereas previously the focus was on the desperate search for yield in the illusion of perpetual debt at very low cost and no defaults, we are now shifting to strategies aimed at avoiding losses. The balance is shifting from a frenetic search for yield back to an attitude of risk minimisation.

    In addition: the long period of negative interest rates did not end until 2022. Higher interest rates (above 4% for corporate bonds) mean, from an investor’s perspective, that they no longer need to invest in the riskiest asset classes.

    Now interesting: short-dated IG bonds and floating-rate secured personal loans
    In this emerging trend, the preferred asset classes are also shifting. Short-dated investment-grade bonds will most likely be the first to attract interest, as they are liquid, have a low duration risk and a low default risk. In addition, those segments of non-exchange traded debt (private debt) that can offer floating rates, a strong package of collateral and a solid illiquidity premium will be attractive.

  • Home prices resilient despite sharpest interest rate rise in 30 years

    Home prices resilient despite sharpest interest rate rise in 30 years

    Prices for residential property increased again in nominal terms in 2022 despite the strongest rise in interest rates for 30 years, although much less strongly than in the previous year. In the case of single-family houses, prices increased by an average of 4 percent last year, which was significantly below the previous year’s value of 9 percent. In the same period, prices of condominiums increased slightly by 5.7 per cent – again, less markedly than in 2021, which equalled an increase of 8.3 per cent. However, a closer look at the four regions of Switzerland with the most transactions (purchases and sales of single-family houses and condominiums) – Zurich, Northwestern Switzerland, Bern, Lake Geneva – reveals a differentiated picture: Adjusted for inflation, only half of the regions still show a price increase for either single-family houses or condominiums.

    The analysis by Homegate and ImmoScout24 together with the Swiss Real Estate Institute is based on the effective sales prices of the Swiss Real Estate Data Pool. This includes the owner-occupied properties financed by Credit Suisse, UBS and Zürcher Kantonalbank and covers around 40 percent of all transactions in Switzerland. In 2022, around 7,200 sales of owner-occupied homes were registered in the regions surveyed. As in the previous year, this represents a decline of around 10 percent compared to 2021, although in contrast to the previous year, this was largely reflected in the number of condominiums sold.

    Martin Waeber, Managing Director Real Estate, SMG Swiss Marketplace Group, sees the reasons for the slowdown in price increases primarily in the sharp increases in key interest rates and the resulting rise in mortgage rates, as well as a declining effect of home offices compared to 2021: “The dampening effect of rising interest rates on the development of home prices predicted at the beginning of 2022 has been confirmed, albeit to a lesser extent than might have been expected. However, home prices seem to have slowly reached their zenith. Apart from the fact that many people simply can no longer afford to buy their own home at current prices, the declining use of home offices has also led to a decline in the valuation of the work situation within one’s own four walls. Both factors dampened the price increase in the course of the past year. However, in view of the scarcity of land and the continuing influx into Switzerland, a real estate bubble is not to be expected in this country, Waeber continues. This is especially true since properties for sale are still very popular, especially in places like Geneva and Zurich.

    Single-family homes in the Lake Geneva region more than 70 percent more expensive than in the Bern region
    With strong price growth of 9.3 percent, prices for single-family homes in the Zurich region increased the most in 2022 – and this was even the only region with a higher price increase than in 2021 with an increase of 7.7 percent. The average single-family home cost CHF 1.53 million. As a result, the Zurich region increasingly caught up with the Lake Geneva region, which remained the most expensive: the gap to the average single-family home price in the Lake Geneva region narrowed by CHF 80,000, or 28 percent, compared to the previous year. In the Lake Geneva region, an average property cost CHF 1.74 million in 2022, 3 per cent more than in 2021. In the Bern and Northwestern Switzerland regions, average property prices for single-family homes also converged somewhat, with prices in the Bern region recording an increase almost twice as high (6.3 per cent to CHF 1.02 million) as in the Northwestern Switzerland region (3.6 per cent to CHF 1.14 million). Taking into account last year’s inflation, this results in only a minimal price increase of 0.8 per cent for northwestern Switzerland. Nevertheless, Bern remains the cheapest region to buy a single-family home.

    Condominiums in the Lake Geneva region almost as expensive as in the Zurich region
    In the case of condominiums, growth in the Zurich region for 2022 was restrained at 3.7 per cent, especially compared to that of single-family homes. Nevertheless, properties in this region remain the most expensive of all four regions analysed, averaging CHF 1.12 million. Due to a considerable price increase in the Lake Geneva region of 12 percent compared to 2021, the difference to the front-runner narrowed significantly (from CHF 120,000 to CHF 40,000). The Bern region continues to be by far the cheapest for potential buyers of condominiums. Average prices here rose by only 2.9 per cent to CHF 0.7 million last year. Taking inflation into account, this region can even be said to have stagnated. In addition to the Lake Geneva region, the second cheapest region – northwestern Switzerland – was also unimpressed by rising interest rates and the declining trend towards home offices: prices rose by 7.9 per cent in 2022, even more than in the previous year (5.6 per cent). At CHF 820,000, an average condominium now costs CHF 60,000 more than in 2021.

    With a view to the property prices per square metre of net living space, an additional effect is particularly evident for the Lake Geneva and Zurich regions. In the Zurich region, prices per square metre rose significantly faster than property prices in the same period. This indicates falling residential areas of the traded properties. In the Lake Geneva region, on the other hand, the opposite was true, i.e. property prices rose five percentage points more than prices per square metre. Thus, larger properties tended to be sold on the market in the Lake Geneva region for 2022 than in 2021.

    The cheapest houses are in Aarburg, the most expensive in Uetikon am See*
    Not surprisingly, of the five municipalities with the highest median prices for single-family houses, three came from the Zurich region. The most expensive are in Uetikon am See (CHF 4.0 million), followed by Kilchberg (CHF 3.68 million) and Meilen (CHF 3.41 million). These are followed by two municipalities in the Lake Geneva region, Vésenaz (CHF 3.06 million) and Nyon (CHF 2.98 million). Two findings are worth noting: firstly, all five of the most expensive municipalities for single-family homes were not listed last year; secondly, prices in this highest segment have risen significantly once again. In the case of the highest median prices for condominiums, all five municipalities even came from the Zurich region: led by Küsnacht (CHF 2.52 million), Zumikon, Herrliberg and Meilen (CHF 2.3 million each) and Erlenbach (CHF 2.16 million).

    On the other side of the scale, the cheapest residential properties in the four regions surveyed – for both single-family houses and condominiums – all come from the canton of Aargau. Depending on the municipality, condominiums are priced from CHF 400,000 (Klingnau), while single-family homes could be purchased last year from CHF 610,000 (Aarburg). This shows impressively: for the price of a condominium in Küsnacht in Zurich, there are six to buy in Klingnau, less than 35 kilometres away. And almost seven single-family homes – or a complete apartment building – can be bought in Aarburg for the price of one in Uetikon am See. These two places are also just 60 kilometres apart as the crow flies.

    Summing up the results of the latest Home Market Price Analysis, Peter Ilg, head of the Swiss Real Estate Institute, is amazed at how robust price growth is in the owner-occupied home market: “After nine years of negative interest rates, the turnaround in interest rates came abruptly last year with several key rate hikes totalling 1.75 percentage points. For the first time in more than 30 years, the SNB has raised the key interest rate so significantly within one year.” Falling home prices in Switzerland would therefore not have surprised Ilg at this turn of events – combined with a trend towards a decline in the use of the home office. “Nevertheless, I am amazed at how robust the price growth in the owner-occupied home market is: In three of the eight segments examined, price growth was even significantly higher than the previous year despite this headwind,” Ilg said, summarising the findings of the Home Market Price Analysis for 2022.

  • Development of the interest rate environment

    Development of the interest rate environment

    The unprecedented circumstances plaguing the global economy are also weighing on Swiss households, which saw an average inflation of 3.5% in August compared to the same month last year. With an increase of 0.10 percentage points more than in the previous month, there is increasing evidence from the data basis for inflation in the remaining segments that were not directly affected by the rising commodity prices. As a result of this unintentional reversal, the perceived inflation in this country is now increasing for both producers and consumers. This perception naturally influences the price and wage negotiations and, in the event of a significant deviation from the SNB's inflation target, pours more expensive fuel into the fire.

    From a monetary policy point of view, it is therefore essential to prevent a fire. The SNB will therefore not hesitate to tighten the interest rate screw further in the exercise of its main mandate – namely to ensure price stability – and also to hold it there until the inflation target of a maximum of 2% in the long term is reached. It is therefore obvious that an increase of the same amount for the coming December meeting cannot be ruled out

    Development of mortgage interest rates
    Inevitably, the future course of monetary policy, obedient to necessity, will weigh on the mortgage markets and ultimately also on borrowers. The zero lower limit for SARON mortgages is now redundant and the interest costs for this loan product increase significantly. Fixed-rate mortgages are also more expensive because interest rates are at their highest levels across all maturities. In addition, the interest rates for credit products are subject to strong fluctuations due to the prevailing uncertainty.

    SARON mortgage forecast
     As of today, the low interest rate level can only be viewed in the rear-view mirror for an indefinite period of time. Further rate hikes are imminent, although we rate a rate of 1.00% as the most likely scenario at the end of the year. What is certain is that the key interest rate will be higher next year than it is today. As long as the uncertainties on the interest rate markets dominate, mortgages will be subject to higher and volatile interest rates. If the key interest rate and thus also the SARON rate rise to 1.00% at the end of the year, the SARON mortgages will also become more expensive accordingly. We expect that mortgage holders – depending on the specified margin – will have to pay between 1.60% and 2.00% for a SARON mortgage at the end of the year.

    Forecast long-term fixed-rate mortgages
     On the side of long-term fixed-rate mortgages, the rise in interest rates is likely to be more modest by the end of the year, since this was expected by the market and has therefore already been priced in in recent months. While the 10-year reference interest rate was below the zero limit a year ago, it has risen to over 2% in a short space of time. A noticeable increase by the end of the year is not to be expected if the measures taken to contain inflation prove effective. For the ten-year fixed-rate mortgage, we expect mortgage interest rates to tend to move sideways, which should be between 2.80% and 3.20% by the end of the year.

    recommendations
     The rapid development on the mortgage market shows how quickly and devastatingly the interest rate environment can turn into troubled waters. Hence, it is highly recommended to know your options as well as risks and make a broad market comparison. Finally, a complete and clean basis of comparison from Property Captain can serve as necessary support in your financing decisions. We at Property Captain are happy to provide you with professional advice and compare offers from numerous financing partners for you.

  • Swiss asking rents are already rising again

    Swiss asking rents are already rising again

    The Homegate rent index for asking rents is collected by the real estate marketplace Homegate in cooperation with the Zürcher Kantonalbank (ZKB). It measures the monthly, quality-adjusted change in rental prices for new and re-let apartments based on current market offers. The index shows a slight increase of 0.3 points compared to the previous month at 118.1 points (plus 0.3 percent compared to the previous month). Compared to the previous high of June 2022, the index has increased by almost 0.2 percent. In a year-on-year comparison, asking rents across Switzerland have risen by 2.3 percent.

    Change in the cantons
    Looking at the cantons, it is again striking that in August compared to the previous month, only a few cantons showed major changes in asking rents, while the majority of cantons only saw changes of 0.5 percent or less. Only in the cantons of Geneva (1 percent), Bern (0.7 percent) and Obwalden (0.7 percent) have advertised rents increased by more than this mark. It is striking that asking rents have risen in all cantons without exception, especially in the mountain regions: Nidwalden (6.5 percent), Obwalden (4.6 percent) and Graubünden (4.1 percent). A total of eleven cantons recorded an increase compared to the previous year, which is higher than the national average of 2.3 percent.

    change in the cities
    In the surveyed Swiss cities, meanwhile, there were clear changes in August. These are more than 0.5 percent in five out of eight cases. In August alone, asking rents in Lucerne (1.1 percent), Bern (1.1 percent) and Geneva (1 percent) increased by a good one percent. In all three cases, however, this increase also accounts for a considerable part of the increase compared to the previous year, which is around 1.5 percent for each of the three cities. The situation is different in Zurich or Basel: While the asking rents in August changed only minimally compared to July, both cities recorded significant growth compared to the previous year of 5.6 percent in Zurich and 2.9 percent in Basel.

    Method of quality adjustment
    The development of asking rents in Switzerland is corrected for the different quality, location and size of the apartments. The advantage of this so-called hedonic method is that the real rental price development for new apartments and apartments to be rented again is shown on Homegate. The Homegate rental index is the oldest quality-adjusted rental price index in Switzerland and is considered a reference source for real estate professionals to determine the price of rental properties.

  • Price correction in Swiss real estate is gaining momentum

    Price correction in Swiss real estate is gaining momentum

    Current interest rate situation in Switzerland
    After more than seven years, the Swiss Confederation wants to end the period of low interest rates on September 21st. An increase of half a percentage point to 0.25 is planned. In scenarios that assume further inflation, a 0.75 percent increase to 0.5 percent is planned.

    As early as mid-June, the SNB raised interest rates by half a percentage point to minus 0.25 percent as a first step. The Governing Board weighted the dangers of an uncontrollable fall in prices more than that of a weakening of the export economy. SNB President Thomas Jordan stated: “The price stability goal is absolutely central to us.”

    Real estate prices have plummeted in some cases
    What promises relaxation from an economic point of view is being observed critically by real estate buyers. Because even before the National Bank’s decision, the interest rates for fixed-rate mortgages had risen, in some cases significantly. At the same time, real estate prices fell in certain regions.

    For example, the residential real estate price index of the Federal Statistical Office shows that the value of real estate fell by 0.4 percent in the first quarter of 2022, but partially recovered in the second quarter. There were sometimes significant differences depending on the region and type of property. Owners of smaller single-family homes in smaller towns such as Glarus, Davos or Langenthal were hardest hit. Here the discounts were recently 4.2 percent, in rural regions such as Dissentis and Maggia 1.7 percent and in larger cities such as Winterthur, St. Gallen and Lugano 1.4 percent. Losses in condominiums were even greater. Losses of 3.3 percent were recorded in medium-sized cities and 3.2 percent in rural areas.

    Consequences of the development for real estate buyers and owners
    Due to falling prices, there are already regionally noticeable declines in demand, with places in less good locations being particularly affected. For a long time it was also possible to achieve high prices here with relatively little (marketing) effort. That should change now. The following scenarios are particularly conceivable.

    developments on the buyer side
    As interest rates rise, loans also become more expensive. This increases the monthly burden for all those who use financing to buy real estate. Two problems arise from this.

    First of all, it will no longer be possible for everyone who wants to buy to get financing because they cannot bear the monthly burden. Accordingly, the demand will decrease. While this is not currently a problem due to the excess demand, it could become one if follow-up financing expires in 10 to 15 years and not all buyers can afford further financing at less favorable conditions.

    The second problem is closely related to the first. If follow-up financing can no longer be served and properties have to be sold, more properties come onto the market, which meet falling demand due to higher prices. At the same time, there is a risk for the banks that they will no longer be able to sell mortgaged real estate at the intended price if follow-up financing fails.

    Developments on the owner side
    If demand falls as a result of prospectively rising interest rates, this also becomes a problem for all those who bought the property to maintain the value of their assets. If prices go down, you can get less for them. In that case, the value of the assets protected against currency depreciation is lost elsewhere.

    More houses will come onto the market in the future
    Around half of all homes in Switzerland are owned by pensioners . Many of these houses will come onto the market in the next few years. “Credit Suisse evaluated the data exclusively for Blick. These are impressive: Spread over the next 23 years, a total of over 419,000 homes will become vacant because pensioners move out or die inside. The number of houses that come onto the market in this way will increase every year from now on. If there are still 3,500 houses in 2023, according to CS calculations, there will be over 40,000 homes by 2045.”

    Recommendations for buyers The most important thing for buyers and owners is not to panic. A look at the development of interest rates over the past ten years makes it clear that many financing deals were still concluded at 3.2 to 4.0 percent. Moderate interest rate increases are currently not a problem for these people. They can continue to make their interest and principal payments. Problems are to be expected here at best in the course of an economic slump with sharply rising unemployment figures. But here, too, a stable picture emerges. Between 2011 and 2021, the rate was constant between 4.4 and 5.1%.

    The most important tip is to secure the interest rates, which are still low in a long-term comparison, for as long as possible. Above all, this includes the need to take care of follow-up financing as soon as possible. Here, for example, forward loans can be used. However, interest premiums should be taken into account here in order not to incur additional long-term costs.

    About Betterhomes
    Betterhomes stands for success in real estate brokerage on fair terms and was able to establish itself as the largest independent real estate agent in the home market of Switzerland with the idea of Immobilienfairmittlung® – an innovative combination of the latest technology and local expertise – and is just as successful in Germany as it is in Austria.

    The company guarantees real estate providers the best price-performance ratio of a brokerage service and offers real estate seekers the largest possible and most attractive range of real estate.

    Further information: Betterhomes

  • Profit increase of over 6% at Swiss Prime Site

    Profit increase of over 6% at Swiss Prime Site

    The key figures for 2022 are characterized by two factors: on the one hand, the Akara Group from Zug was included in the scope of consolidation for the first time with the closing on January 10, 2022, and on the other hand, the consolidated financial statements for 2022 were prepared in accordance with the IFRS accounting standard and the previous year's figures were adjusted accordingly.

    Interest rate turnaround heralded, but resistant Swiss real estate market
     In the year to date, the Swiss economy has continued on its growth course, despite geopolitical challenges, supply chain problems and rising prices. With an increase of 105,000 jobs in the service sector over the past 12 months and a record 114,000 vacancies, the outlook for the economy remains positive. The key interest rate increase by the Swiss National Bank (SNB) by 50 basis points in June 2022 is intended to prevent inflation, which is also increasing in Switzerland, from spreading to goods and services across the board. Inflation here is still below that in the European markets. Despite the further interest rate hikes announced by the SNB for 2022, we are still in a negative real interest rate environment. This favors real value investments such as real estate. Accordingly, we have only seen isolated reactions in the real estate market so far. First-class locations continue to be in demand by tenants and investors.

    Increase in operating income and good rental income
     The positive business development of the Swiss Prime Site Group is reflected in the increase in operating income by 2.5% to CHF 378.9 million. All group companies contributed to this. In the first half of 2022, we were able to newly let or re-let an area of over 102,000 m2 [47,000 m2] in our own real estate portfolio. This often happened on better terms and led to an increase in rental income to CHF 214.2 million (+1.9% on a comparable basis). The vacancy rate was reduced to 4.4% [4.7%]. The WAULT is still 5.5 years [5.6 years]. The rental successes more than compensated for the rent of CHF 3.3 million from the modernization project on Müllerstrasse in Zurich, which was still included in the first half of 2021, as well as the absence of the sale of properties as part of our capital recycling strategy. This involved a portfolio with seven properties, which was sold to the newly launched “Swiss Prime Site Solutions Investment Fund Commercial”, as well as two other properties in St. Gallen. This resulted in a pre-tax profit of CHF 14.7 million. Sales profits will increase significantly again in the second half of 2022 due to real estate sales already signed in the amount of more than CHF 165 million (including house B “Espace Tourbillon” in Plan-les-Ouates).

    Further details: sps.swiss/en/media/media-releases

  • Swiss real estate market – turnaround in interest rates, so what?

    Swiss real estate market – turnaround in interest rates, so what?

    After years of oversupply, the signs on the rental housing market are now clearly pointing to a shortage. Although demand will continue to exceed the supply of housing in the future, the real estate industry has so far not reacted with higher housing production. As long as rents do not rise sharply, there will be no incentive to expand residential construction in the current market environment. “The remaining vacancy reserves will soon be exhausted. Because the demand from immigration, individualization and demographic aging continues to increase,

    while at the same time fewer and fewer new homes are being built. Significant increases in asking rents are therefore only a matter of time and the topic will move up the political agenda,” says Neff.

    Densification progresses slowly
    It's getting tighter and tighter in Switzerland. The new buildings in this country are getting taller, the apartments in them are getting smaller and more and more people live in the residential zones. So the scarce land is being used more and more economically. However, because land use per person continues to rise and more and more people are living in Switzerland, the pace of densification is far from sufficient to stop urban sprawl. “High hurdles stand in the way of the faster densification demanded by spatial planning. The construction costs of projects with higher density are significantly higher than for a new building on a green field. In addition, strict, inflexible and inconsistent building and zoning regulations limit, complicate or make densification efforts impossible. A very liberal objection practice increases the planning effort for projects with high consolidation potential and leads to ever greater administrative effort," says Martin Neff. For example, the average time from the submission of a building application to the granting of a building permit for buildings with more than three apartments has increased significantly in the last 20 years from 92 days to 150 days.

    Bursting bubbles in the virtual world
    Trading in digital assets based on blockchain technology has experienced a real hype in the course of the cryptocurrency boom. In the meantime, land and real estate can also be purchased in the digital world, the so-called metaverse. The more attractive a piece of digital soil is, the more people will pay for it. The relative attractiveness is strongly defined by how many players are in the vicinity of the property on average. The market for digital real estate has experienced enormous price increases. At the beginning of January 2021, for example, in one of the best-known Mataverses "The Sandbox", the average plot of land was still being traded for less than 150 US dollars. By the end of the year, the price had risen to over $16,000, an increase in value of almost 11,000 percent. By the end of June 2022, prices had collapsed to $2,500. Such a bubble formation with subsequent bursting has been observed in many Metaverse projects in recent months. Among other things, this is favored by the fact that many projects are tied to cryptocurrencies for technical reasons, the future of which cannot yet be estimated either. "Due to the extreme volatility, the obvious tendency to bubble and the questionable intentions of many providers, virtual real estate remains primarily a playing field for speculators who are very willing to take risks," says Martin Neff.

    The “Immobilien Schweiz” study offers a detailed quarterly assessment of the Swiss real estate market. The current study and further information are available at raiffeisen.ch/casa.

  • Swap interest rates rise

    Swap interest rates rise

    The yield curve for swap transactions is currently undergoing a non-parallel shift. Since the last decision on June 16, the curve has flattened, with sub-year rates staying high and longer-term rates falling. This decline speaks to the credibility of monetary policy that it will be successful in its efforts to maintain price stability over the long term. For medium-term maturities in particular, this decline reflects the market attitude: the SNB is not tightening the interest rate screw as much as previously expected for this venture. Although the maturities during the year signal an imminent increase in key interest rates, the size of the step will depend on future inflation data and currently leaves a lot of leeway for their estimation. The scenario of a 75bps rate hike, similar to the Fed, would not be inconceivable with surprisingly high inflation numbers.

    In any case, the end of negative interest rates is imminent. The prices for fixed-rate mortgages have become cheaper since the last decision by the SNB, but money market mortgages will also be affected in the future and will most likely become more expensive.

    Positive signs in the interest rate market
    The interest rate market has reacted positively to the monetary policy strategy in the past few weeks, thus underpinning the SNB's credibility in being able to guarantee price stability in the long term. Even if long-term interest rates have fallen and the strong domestic currency is likely to have a positive impact on inflation in the coming months, further increases are essential for successful monetary policy. However, it's over

    From today's perspective, it is very difficult to quantify the next rate hike, although we consider all scenarios from 25 to 75 bps to be extremely likely. Therefore, we will be closely monitoring the upcoming inflation numbers and the swap market to inform the next decision.

    Fed decision
    At its meetings on July 26th and 27th, the Federal Open Market Committee decided to raise the key interest rate again by 75%. The return to neutral monetary policy has so far resulted in the desired slowdown in macroeconomic activity to counteract the imbalance between supply and demand. Although inflation still appears to be rising unchecked, the Fed's monetary policy – thanks to the high pace of tightening in recent months –

    gained more credibility. This is supported, among other things, by the decline in bond yields and break-even inflation rates. In addition, the latest decision was in line with market expectations, which are currently pricing in another tightening of at least 50bps for the next meeting in September – along with the Fed's comments. It is now important to monitor inflation developments closely in the coming weeks.

    The ECB completed the exit from negative interest rates on July 21st and hiked rates by 50 instead of 25 bps. The strong fall in the value of the euro since the beginning of the year was of particular relevance to the decision, as this increases the imported inflationary pressure. Further interest rate adjustments could increase the attractiveness of the European currency and counteract inflation through exchange rate appreciation, at least in the short term. Furthermore, the Governing Council approved a new instrument called the Transmission Protection Mechanism (TPM) to measure the spread of bond yields between different member states

    to ensure the efficient transmission of monetary policy signals to all euro area countries.

    Will interest rate hikes pick up again in September?
    If there is no sign of a slowdown in inflation by September, we expect the Fed to hike rates by at least 50bps a third time. In any case, it is important to understand that due to the short succession of large rate hikes, the effectiveness of monetary policy is unlikely to be immediate and it will take some time for the economy to fully respond. We therefore think that stagnation or even a fall in prices is to be expected and that so-called peak inflation will soon be reached. Due to the development of the euro exchange rate and the significantly high inflation figures, we clearly expect further interest rate hikes from the ECB. In view of the interest rate moves by the Fed and also the SNB, we currently expect at least a 50bps adjustment for the September meeting.

  • Asking rents remain stable month-on-month

    Asking rents remain stable month-on-month

    The rental index, which is collected monthly by the digital real estate marketplace Homegate in cooperation with the Zürcher Kantonalbank , closed July at 117.7 points, Homegate informed in a press release . Compared to the previous month, advertised rents fell by an average of 0.2 percent across Switzerland. The analysts of the index have observed different developments within the individual cantons.

    Rents have remained relatively stable in most cantons. In Zug, Graubünden, Geneva and Glarus, however, the analysts observed significant declines of between 3.9 and 1.3 percent. Year-on-year, rents increased across all cantons.

    Of the eight cities examined in the index, the analysts only observed a month-on-month increase in asking rents in Basel and Lucerne. Rents fell slightly in the other cities, but more sharply in Geneva and Lausanne, each by 1.6 percent. Compared to July 2021, asking rents have risen in all cities, with the strongest increase in Zurich at 6.4 percent.

    When recording rental price changes for the rental index, the rental prices are corrected for different quality, location and size of the apartments, explains Homegate. This makes it possible to record the actual rental price development.

    Homegate is a division of SMG Swiss Marketplace Group AG . This combines the digital marketplaces of TX Group , Ringier and Mobiliar .

  • Housing is becoming noticeably more expensive for everyone

    Housing is becoming noticeably more expensive for everyone

    The increased interest burden has so far had no effect on the demand for one's own four walls. According to a press release on immoscout24.ch , those interested in buying their own homes are “still in a buying mood”. The data presented there is based on the Real Estate Offer Index . It is collected by the SMG Swiss Marketplace Group in cooperation with the real estate consulting company IAZI . Immoscout24.ch is an SMG marketplace.

    According to this, the price expectations on the supplier side have not reduced despite the increase in the key interest rate by 0.5 percentage points. Detached houses cost 2 percent more, condominiums were advertised within a month at 0.7 percent higher prices. "With the increased interest burden and the general increase in costs for maintenance and investments, living in your own home is becoming noticeably more expensive," Martin Waeber is quoted as saying by SMG. Accordingly, a slowdown in price development is likely.

    Advertised rental prices also increased slightly last month by 0.3 percent. In addition, the significantly higher oil and gas prices would lead to "significantly higher expenses".

    Demand for investment properties could fall among institutional investors. This may result in reduced construction activity and thus a shortage in the supply of rental apartments. It remains to be seen how asking rents will develop in the long term.

  • Sika posts record sales

    Sika posts record sales

    Sika achieved record sales and profits in the first half of 2022, writes the globally active Zug-based building materials group in a statement . According to her, Sika’s sales increased by 18.0 percent year-on-year to a record CHF 5.25 billion. The operating result at EBIT level rose by 22.7 percent to CHF 841.9 million in the same period. At the same time, the EBIT margin reached the record value of 16.0 percent, explains Sika.

    Thomas Hasler is quoted in the statement as saying that the market conditions have also become more demanding for Sika. “Nevertheless, we were able to fully exploit the strengths of our business model and our organization in the last six months and achieve good business results,” said the CEO. Hasler lists such strengths as a high level of diversification, a global purchasing organization and innovative, sustainable and high-quality technologies.

    According to the announcement, all regions with double-digit growth rates contributed to the record sales in the reporting period. Growth was strongest in the Americas region at 39.5 percent (35.8 percent in local currencies). The region with the highest sales, EMEA, grew by 7.6 percent (12.9 percent in local currencies) to CHF 2.19 billion. At 13.2 percent in local currencies, business with the automotive industry “grew significantly faster than the market,” writes Sika.

    For the year as a whole, the Group has set itself the goal of exceeding 10 billion francs in sales for the first time. The operating result at EBIT level is to be increased disproportionately to sales.

  • Dormakaba remains on course for growth

    Dormakaba remains on course for growth

    In the 2021/22 financial year, which ended on June 30, Dormakaba generated net sales of almost 2.76 billion francs, according to the globally active locking technology company from the Glattal in a press release . According to dormakaba’s preliminary and not yet audited key figures, this corresponds to growth of 10.3 percent. Organic growth is estimated at 7.7 percent in the release. The company explains that dormakaba has exceeded its self-imposed target range of 3 to 5 percent.

    The adjusted result at the EBITDA level rose from 362 to 372 million francs year-on-year. At 13.5 percent, the adjusted EBITDA margin was below the target of at least 14.2 percent, dormakaba reports. The company gives the background to inflation accelerated by the war in Ukraine and disruptions in the supply chains.

    According to dormakaba, the latter primarily led to impairments in business with high-margin electronic products. Overall, however, the company can look back on a financial year with good demand. In its own estimation, dormakaba can currently also rely on a good order intake and backlog.

    “While we exceeded our growth targets, we were unable to meet our EBITDA margin guidance in this challenging inflationary environment,” dormakaba CEO Jim-Heng Lee is quoted as saying in the release. “We have therefore raised prices to compensate for further inflationary effects and will continue to do so.” dormakaba will present its detailed annual report on 31 August.

  • Oper Credits collects 11 million euros

    Oper Credits collects 11 million euros

    Oper Credits has raised 11 million euros in a Series A financing round. It was led by Bessemer Venture Partners and ABN AMRO Ventures . Existing investors Constructive Venture Fund , Pitchdrive , Kraken Ventures , Techstars and Verve Ventures have also participated.

    For Oper, according to a blog article , this round of financing is about “expanding our lead in digital mortgages across Europe. Because the mortgage industry is ready for a gigantic digital leap.”

    With the help of intelligent data, Oper wants to simplify the process of mortgage approval, which is complex for everyone involved, as much as possible. The aim is to replace the handing over of paper documents and time-consuming credit checks that applicants often have to go through at several banks. For this, Oper has created a white-label solution that banks can integrate into their existing digital channels. “We are the first provider in this area and are gaining new European banks at a rapid pace,” says Oper.

    Oper fits into the strategy of many retail banks in Europe, which are closing branches and increasingly relying on online processes. But when it comes to mortgages, an either/or is not the solution in view of borderline cases that have to be clarified individually: “In our experience, a hybrid strategy will ultimately prevail.”

  • Patrimonium Urban Opportunity AG goes to BX Swiss

    Patrimonium Urban Opportunity AG goes to BX Swiss

    Patrimonium Urban Opportunity AG has been listed on the BX Swiss AG stock exchange since July 18. The listing is intended to enable the company to grow faster and increase flexibility in financing new projects, Patrimonium explained in a press release . Founding shareholders and management keep their shares.

    The PATURBO portfolio currently consists of nine commercial investment properties with a total market value of CHF 222 million. Another property under construction is scheduled for completion in 2024. The real estate company focuses on commercial real estate in the catchment areas of Geneva, Lausanne and Zurich.

    “We are proud to have reached this important milestone thanks to the many years of good and trusting cooperation with our investors and partners,” Christoph Syz, CEO of PATURBO, was quoted as saying in the announcement on the occasion of the company’s listing on the Bern Stock Exchange. Hanspeter Berchtold, CIO Real Estate at Patrimonium Asset Management AG, is looking forward to “further exciting projects and being able to make a positive contribution to urban development in the most important economic centers in Switzerland”. Patrimonium Asset Management AG has been entrusted with asset management by PATURBO.

  • Asking rents continue to rise

    Asking rents continue to rise

    The Homegate rental index now stands at 117.9 points. This means that asking rents increased again by 0.3 percent in June, and by 1.3 percent since the beginning of the year. According to a media release from the real estate marketplace, this is “in stark contrast to the rental price development before the COVID 19 pandemic, when rising vacancies in the Swiss rental apartment market caused nervousness among investors”.

    Because the net rents have also become more expensive, the increased energy costs alone cannot be held responsible. In fact, building applications have been declining for the last two years. At the same time, there is brisk demand for rental apartments. “So just a few years ago there was concern about an oversupply of rental apartments, but these are again extremely scarce in sought-after locations.”

    Homegate describes the half-year increases in the cantons of Zug (5.4 percent) and Graubünden as well as in Appenzell (4.3 percent each) as remarkable. The increases were lowest in the cantons of Basel-Landschaft (0.6 percent) and Ticino (0.5 percent).

    In the cities, demand has increased again since the infrastructure started up again after the first phases of the pandemic, particularly in Zurich (4.8 percent). Lausanne (2.5 percent) and Lugano (1.8 percent) were also above the national average. Only in St.Gallen were rents slightly down (minus 0.2 percent).

  • Clever tool makes living dreams come true

    Clever tool makes living dreams come true

    Whether buying, modernizing, managing or selling a property – the Liiva home ownership platform is the digital companion for all kinds of dream homes. In combination with personal advice from the parent companies, the Liiva digital platform offers you as a customer a hybrid ecosystem.

    Customized modernization

    A future-oriented function of Liiva is the innovative modernization planner, which determines the current market value of a property and creates a concrete renovation plan. It is therefore always clear how much it costs you to maintain or increase the value of your property.

    Users who value sustainability will also find the information they are looking for: Liiva indicates the property’s energy consumption, provides general information on energy-related refurbishment and on the specific potential of the property for energy-related improvements.

    The modernization planner shows to what extent the energy efficiency of your home can be increased and energy consumption reduced by replacing the heating medium and switching to renewable energy sources. The practical tool also provides valuable tips for improving the energy rating.

    Finally, all relevant information about the property is stored in a “digital house folder” and can be called up at any time and from anywhere.

    Do you want to equip your home for an energy-efficient future?

    Learn more about Liiva here

  • The city wants to use synergies with the expansion of district heating

    The city wants to use synergies with the expansion of district heating

    Since 2020, Energie Wasser Bern has been working on expanding the district heating network from the energy center in the Forsthaus. By 2035, 36 kilometers of main lines are to be laid in the existing roads. The district heating project is of central importance for achieving the goals of the municipal energy plan and is one of the largest infrastructure projects in recent decades.

    Based on initial experiences in the Länggasse district, the municipal council intends to consistently use the district heating project for improvements in the interests of the population. If the street space is broken up for the laying of the lines, urban climate measures such as unsealing and planting of street and square surfaces, improvements for biodiversity, water retention or seepage should be implemented. At the same time, the municipal council wants to increase safety for pedestrians and cyclists and for school children. In addition, urban drainage measures are to be implemented underground and, where appropriate, traffic signal systems are to be optimised.

    Loan application is being prepared

    To implement these measures, the municipal council is planning an investment loan of CHF 35 million. This loan is also intended to finance the necessary positions in the Directorate for Civil Engineering, Transport and City Green (a total of 5 additional project manager positions). After completion of the district heating project, the additional job budget will be reduced again through natural fluctuation. In view of the highly competitive market for skilled workers, the district heating expansion that has already started and the long lead times for construction projects, the municipal council has authorized the responsible directorate to advertise the positions now.

    The corresponding loan proposal is now being prepared and is expected to be submitted to voters in the city of Bern in June 2023.

  • Privately used residential property is becoming more expensive

    Privately used residential property is becoming more expensive

    According to a media release from Raiffeisen Switzerland on the quarterly transaction price index, owner-occupied homes have to dig deeper into their pockets than in the first quarter and also compared to the previous year. Accordingly, the purchase of a condominium increased in price by 3.5 percent in the second quarter. Compared to the same period last year, there was a price increase of 7.7 percent. A single-family house costs 1.3 percent more than in the previous quarter. Year-on-year, prices for this type of property have risen by 8.7 percent.

    According to the Raiffeisen chief economist Martin Neff, who was quoted in the media release, the price dynamic is due to the shortage of supply in the home ownership market. Neither the interest rate hike nor the heightened uncertainties in the reporting period would have changed that.

    In the case of condominiums, the highest increase in prices compared to the previous year was in the Zurich region, where prices rose by 11 percent. In contrast, the Bern region has the lowest rate compared to 2021 at 3.5 percent. 10.6 percent more has to be paid for a condominium in tourist areas.

    The price spiral is also driving up the costs for single-family homes. In the Western Switzerland region, the segment has increased in price by 12.8 percent, in the Northwestern Switzerland region the value is 10.4 percent.

    Broken down by place of residence, there is a pronounced desire for private home ownership in the countryside, where the prices for a single-family house have soared by 12 percent. In city centers, house prices are 8.7 percent higher than last year.

  • Cowa receives 1 million francs from investors

    Cowa receives 1 million francs from investors

    In a first round of financing, Cowa Thermal Solutions AG has received over CHF 1 million from private investors and its own founders Remo Waser and Simon Maranda. According to an article on the startupticker.ch portal, the young company based in Lucerne’s Technopark wants to use the fresh capital to market its heating storage system for heat pumps on a larger scale.

    The cleantech start-up is developing a heating storage system with capsules that contain environmentally friendly salts as a phase change material. A tank filled with the capsules can absorb three times more energy than a conventional water tank for heat pumps. According to the information, this makes a heating system less dependent on mains electricity. In addition, unlike batteries or rechargeable batteries, it does not use lithium.

    The storage tank filled with Cowa capsules has been available from the building technology company Meier Tobler since April of this year. According to startupticker.ch, the additional costs for the Cowa product compared to conventional storage systems are quickly balanced out due to the energy density and longevity of 20 years.

    In addition to further scaling on the domestic market, the company would like to expand to Germany soon. Initial talks with potential sales partners have already taken place.

  • Properti raises 6 million Swiss francs of venture capital

    Properti raises 6 million Swiss francs of venture capital

    The Zurich start-up Properti has raised more than CHF 6 million in fresh capital in a second round of seed financing. In this way, the start-up wants to further automate and expand the processes on its brokerage platform for handling real estate transactions. In addition, three new experts will strengthen the Board of Directors of the PropTech company.

    Lead investor Serpentine Ventures led the round of financing. Other investors include the growth capitalist Sparrow Ventures , the entrepreneur Ertan Wittwer and other private investors. According to the information, they were particularly impressed by the “combination of a high rate of growth, specially developed technology and well-founded consulting know-how”.

    With the platform, Properti CEO Levent Künzi is pursuing the goal of simplifying real estate transactions and related transactions and making them more accessible for customers, brokers and service partners. At Properti, digital and technical experts advise buyers, tenants, sellers and landlords and clarify their concerns. 80 percent of the processes are automated. With the fresh capital, the degree of automation should continue to increase.

    In a first seed financing in December 2021, Properti raised CHF 1.25 million. Since then, according to Künzi, there has been a “veritable rush of investors”.

  • Report on Swiss private marketing investments

    Report on Swiss private marketing investments

    The main objective of the report is to better understand how investment professionals in Switzerland invest private markets ie. Approach and develop private equity, including venture capital, private debt, private infrastructure and private real estate, in the context of their overall portfolio. Swiss-based investment professionals from across the financial services industry were surveyed, from banks and asset managers to family offices and pension funds, to independent asset managers and fintech companies.

    The five key findings of the report are:

    • Investors seek exposure to private markets investments primarily for performance potential and income diversification. The report reveals that a large number of investors look to private markets as a way to both differentiate portfolios and signal manager and investment quality.
    • Access to private market investment, be it to specific opportunities or to managers, is the most commonly cited challenge. The perceived risk of private investment is a commonly cited reason not to invest. Providing due diligence resources, either in-house or through high-quality external providers, is essential to overcoming these challenges.
    • Swiss investment professionals are particularly experienced and demanding, holding advanced degrees and numerous job titles. This trait bodes well for the growth of private market investments in Switzerland.
    • Restrictions such as minimum investment size and regulations pose formidable barriers to direct investment in private markets. Investment vehicles such as feeder fund structures and structured products are preferred options to gain access for those who cannot or do not want to invest in LP structures.
    • Respondents expect to increase allocation to private markets assets over the next 12 months. This applies in particular to banks and asset managers. Although the interest rate cycle has turned, this does not appear to have dampened investor appetite for private markets so far. How a new regime of higher interest rates and increasing volatility in public markets will affect future private market allocations is admittedly difficult to predict. Important future topics relate to technological progress, health and ESG.


    Laura Merlini, CAIA, Managing Director EMEA of the CAIA Association, said : “If intuitions are often a guide to truth, then this survey confirms the idea of a very sophisticated investment culture in Switzerland, in which portfolio construction and allocation to alternative investments is changing turning customers and long-term investments. Favored Outcomes.”

    “The idea for the survey arose from our desire to provide objective and actionable insights into the Swiss private markets. Thanks to the Swiss chapter of the CAIA Association, we have been fortunate to work with the pre-eminent professional association of the global alternative investment industry. I thank the authors for their exceptional scientific work and Laura Merlini, CAIA, for her unwavering support. May this first and future editions become a focal point for anyone interested in the Swiss aspects of private markets investing,” added Andreas Bezner, CFA, co-founder and CEO of Stableton.

    The survey was conducted during a particularly challenging macroeconomic and geopolitical period in April and May 2022. While respondents pay close attention to interest rates, inflation and economic growth, investors seem to believe in the power of private markets investing and protection against inflation. Therefore, given the history of Swiss financial market trendsetters, the report may be particularly relevant in understanding the current reshaping of global markets and providing clarity and insights related to future-ready investment portfolios.

  • Turnaround in interest rates not curbing rise in real estate prices for the time being

    Turnaround in interest rates not curbing rise in real estate prices for the time being

    Will the real estate price rally in Switzerland come to an end with rising interest rates? In June there were no signs of a turnaround, at least on the supply side. On the contrary: sellers of condominiums increased their price expectations by a further 1.1 percent within a month. Providers also demanded higher prices for single-family homes in June. However, the surcharge is somewhat lower at 0.3 percent, as shown by the Swiss Real Estate Offer Index, which is compiled by the SMG Swiss Marketplace Group in cooperation with the real estate consulting company IAZI.
    It remains to be seen whether the willingness to pay will continue to follow the rising price expectations. This does not seem out of the question, as mortgage costs are by no means the only criterion when buying a home. In addition, unlike Fix mortgages, money market mortgages are still available at extremely attractive conditions. Since prospective buyers already have to demonstrate that they can cope with a mortgage interest rate of around 5 percent due to the applicable affordability rules, a collapse in demand is not to be expected.

    Unchanged rents in June
    The rental prices offered in advertisements hardly changed at 0.1 percent in June. Asking rents are primarily influenced by the direct demand for living space. This is in contrast to existing tenancies: there could be increases due to the fact that tenancy law is linked to the reference interest rate and general inflation. “The high energy prices are likely to have a far greater impact on asking or existing rents than rising interest rates. Not least in the case of old buildings, these will lead to a significant increase in ancillary costs,” says Martin Waeber, Managing Director Real Estate, SMG Swiss Marketplace Group.

  • Vertina investment foundation successfully started

    Vertina investment foundation successfully started

    By building up a portfolio of new residential properties, the foundation is committed to the highest level of sustainability. She has the knowledge and experience to combine high-yield real estate and environmental responsibility.

    The foundation was launched by Markstein Advisory AG, which underwrites various investment vehicles. She is responsible for the overall management and the portfolio, as managing director Pierluigi Cannoletta could be won. The qualified architect and construction economist with a MAS in Real Estate (CUREM) UZH previously worked for investment foundations for 10 years and has over 40 years of experience in the real estate sector.

    The foundation has already completed three acquisitions in the city of Zurich, in Bachenbülach and in Oftringen. Two further project purchases are scheduled and will be certified by the end of August 2022. This means that the capital from the initial issue is fully invested or earmarked for the construction of the projects.

    For further growth, the investment foundation is already preparing a capital increase.

  • Swiss Prime Site Immobilien reports success in the first half of the year

    Swiss Prime Site Immobilien reports success in the first half of the year

    In the first half of 2022, Swiss Prime Site Immobilien doubled its lettings compared to the same period of the previous year. According to a press release from the Zurich-based company, 90,000 square meters have been newly let or re-let across the entire portfolio and across all regions. In the first half of 2021 it was 47,000 square meters.

    Swiss Prime Site Immobilien AG, which belongs to the Swiss Prime Site Group based in Zug, attributes this success to the good market conditions and the associated demand for commercial space. Despite the global economic slowdown, the signals for development in Switzerland remain mostly positive, according to the statement. In the service sector, for example, 105,000 new jobs were created in the past twelve months, an increase of 2.6 percent. The 114,000 vacancies also testified to a robust Swiss labor market.

    The real estate company noticed a particularly positive development in Basel, Zurich and Geneva. According to Swiss Prime Site, the two development projects currently under construction, JED in Schlieren and Stücki Park in Basel, are also enjoying brisk demand. Pre-letting rates of around 90 percent are expected there by the end of the year.

    “With the strong performance of re-lettings and new leases within our portfolio and the still intact economic prospects, we are also optimistic about the low vacancy rate and positive rental income development at the end of the year,” says Martin Kaleja, CEO of Swiss Prime Site Immobilien.

    Swiss Prime Site announces that it will publish the detailed half-year results for 2022 on Thursday, August 25.

  • PostFinance expands mortgage business

    PostFinance expands mortgage business

    PostFinance is expanding the mortgage business. So far, the company has only offered so-called yellow mortgages in cooperation with partner banks. As of September 1, PostFinance will also broker mortgages via the company ‘s own Valuu platform if desired, PostFinance announced in a statement . The company’s own customers should be given comprehensive advice. The comparison platform Valuu is also available for the independent comparison of mortgages from different providers.

    With the new offer, PostFinance is reacting to the reduced chances of being able to offer loans itself in the near future. The company does not expect that the necessary partial revision of the Postal Organization Act will be carried out, the company writes.

    “Our strategy for 2021 to 2024 already assumes that the credit ban will remain in place,” Hansruedi Köng is quoted as saying in the statement. However, the PostFinance CEO does not want to pass on this disadvantage for his own company to his customers: “By realigning the mortgage business, we are optimizing the service for our customers on the one hand,” says Köng. “On the other hand, we adapt to the general conditions and make a virtue out of necessity.”

  • Swiss and German debt collection industry exchange ideas

    Swiss and German debt collection industry exchange ideas

    Both associations have developed codes of conduct in recent years that define rules for fair debt collection. The Code of Conduct of Inkasso Suisse has been in effect since December 1, 2020. Since October 1, 2021, the Code of Conduct of the BDIU has been mandatory for all members of the German Debt Collection Association.

    Martin Wehrli explains: “With our code of conduct, we take into account both the legitimate interests of creditors to have their claims settled and the no less legitimate interests of consumers, whom we want to protect against abusive collection of claims. We see debt collection as a mediative, dispute-avoiding and communicative activity. This is the only way to reach amicable agreements. Both the Code of Conduct of Inkasso Suisse and that of the BDIU are formulated in this spirit.”

    “Our member companies are a pillar of the economy. Especially in these economically challenging times, they ensure that companies are supplied with liquidity, thus securing entrepreneurial livelihoods and many jobs,” adds Kirsten Pedd. “However, debt collection companies only live up to this great responsibility if they treat everyone involved in the collection of receivables fairly. Debt collection service providers commit to this with our Code of Conduct.”

    The two associations will continue the exchange that began during the development of the respective code, both bilaterally and within the European umbrella organization FENCA (Federation of European National Collection Associations), whose founding members include Inkasso Suisse and BDIU. A dialogue between the ombudsmen Stephan Glättli (Inkasso Suisse) and Brigitte Zypries (BDIU) is also to be initiated.