Tag: Analyse

Changing investment strategies due to rising interest rates

Just as sailors avoid the Bermuda Triangle, investors must also consider the risks of their investments. The magic triangle of investment strategy – liquidity, profitability and security – is now being expanded to include ESG factors. This step is also supported by the “Lost in Transition” study by the Lucerne University of Applied Sciences and Arts. Institutional investors are placing greater emphasis on ensuring that their investments are sustainable in the long term, even if this leads to lower returns in the short term.

A look at Swiss pension funds
Swiss pension funds have diversified their investments, although the proportion of real estate varies from fund to fund. The analysis of the Swisscanto Pension Fund Study 2023 shows that real estate is gaining in importance compared to equities and bonds. This trend can also be observed among other institutional investors, whereby the real estate ratio in the portfolio should be between 10% and 25% in order to ensure optimal diversification.

The impact of rising interest rates on the asset classes
Rising interest rates have a negative impact on all three main asset classes – equities, bonds and real estate. For bonds, interest rate rises lead to price losses, while for equities they reduce their attractiveness. Real estate investments become more expensive, which leads to a decline in demand and thus to a fall in prices. Institutional investors are reacting to these developments by realigning their portfolios and reducing their real estate holdings in order to lower their leverage ratios.

The difficult market environment and its impact on real estate investments
Sentiment on the real estate market is subdued due to rising interest rates and uncertainty on the financial markets. This is reflected in the Swiss Real Estate Sentiment Index, which measures the expectations of market participants. Investments in real estate are becoming less attractive, but the current market environment also offers opportunities, especially for investors who are prepared to invest for the long term and weather the market fluctuations.

Rising interest rates pose a challenge for institutional investors, especially those who have invested in real estate. A realignment of the investment strategy and prudent portfolio optimization are crucial to achieving long-term returns and minimizing risks.

March 2024
Avobis sees positive trend in residential yield property for 2024

In its Outlook 2024, real estate service provider Avobisanticipatesa favourable trend for residential yield properties. The forecast for 2024 is consistently positive, according to a press release. According to the forecast, the attractiveness of residential investment property is likely to increase again in anticipation of lower interest rates and due to positive fundamental factors, and buyers are likely to show greater interest. This is expected to lead to a revitalisation of liquidity on the transaction market.

Despite a revitalised market dynamic, general price increases are not foreseeable in the near future. Institutional investors, who have supported the buyer side in recent years, could increasingly act as sellers. This is also due to the increased sustainability requirements. According to Avobis, environmentally conscious reorganisation of portfolios is leading to properties being sold and more sustainable properties being acquired instead.

This could also be accompanied by a certain degree of volatility. Such market conditions would create opportunities that could be of interest to attentive investors. In the current market environment, residential property reportedly offers a wide range of attractive investment opportunities, from simple buy-to-rent models to construction and promotion through to the realisation of profitable usage concepts.

January 2024
Despite all headwinds: demand for single-family homes remains robust

The volume of advertisements for single-family homes, which declined by 17 per cent in the previous period (Q3 2021 – Q2 2022), recovered in the current period (Q3 2022 – Q2 2023) with eleven per cent growth. At the same time, the average tendering time also increased from 60 to 66 days to the same extent. Despite the strongest increase in mortgage interest rates in the last 30 years, demand for single-family homes proved to be quite robust in the reporting period. This is shown by the current online home market analysis of the real estate portals Homegate and ImmoScout24 in cooperation with the Swiss Homeowners’ Association and the Swiss Real Estate Institute based on the evaluated advertisements of several well-known real estate portals.

For Martin Waeber, Managing Director Real Estate at SMG Swiss Marketplace Group, the results of the current study once again show how robust the single-family home market in Switzerland is overall, despite the significant rise in mortgage rates. “The increased supply and the longer listing period are giving searchers more choice and more time to think, as well as a better overall chance of finding the right property,” says Waeber. However, the best offer is of little use if the question of financing becomes increasingly challenging, Waeber comments on the new analysis.

Listing duration up in many places, demand down
The biggest changes in listing duration were seen in the eight regions of northwestern Switzerland (plus 51 per cent) and central Switzerland (plus 48 per cent). And even in the “hotspots” of Zurich and central Switzerland, sellers with a listing period need more patience than before to sell a single-family home. In French-speaking Switzerland and Ticino, on the other hand, the listing period remained at practically the same level as in the previous period. Nevertheless, in Ticino, with a new average of 136 days, it takes more than three times as long to find a buyer as in the Zurich region with a new average of 42 days.

The combination of the change in the duration of the advertisements and the number of advertisements allows conclusions to be drawn about the development of demand. Although demand in Switzerland as a whole has remained robust, there are considerable differences between the eight regions analysed. The regions of eastern and northwestern Switzerland in particular suffered the greatest slumps in demand. In the region of eastern Switzerland, for example, sellers had to advertise their single-family homes 9 days longer than before (plus 21 per cent). At the same time, almost the same number of single-family homes were advertised as in the previous period (minus 1 per cent).

Rising demand primarily in high-income municipalities
A closer look at the different types of municipalities also shows that demand for owner-occupied homes is rising in six out of eight regions in the high-income municipalities, while it is declining in the majority of suburban municipalities. This majority decline could be related, among other things, to a comparatively higher share of debt financing in these municipalities. Therefore, a rise in interest rates hits these municipalities harder than the high-income municipalities, where, for example, less debt capital is required for the purchase of a home thanks to advance inheritance and thus also less debt-financed funds.

Peter Ilg, head of the Swiss Real Estate Institute, which analysed the data, draws the following conclusion: “Perhaps the risk of a real estate bubble was simply overestimated in the past. While in comparable countries such as Sweden home prices have already corrected noticeably due to the interest rate hikes, in Switzerland there is still no sign of a weakening in the demand for single-family homes. And this despite the fact that the mortgage debt of Swiss households is among the highest in the world, at 140 percent of total economic output in 2020, Ilg concludes.

About the Online Home Market Analysis
The Online Home Market Analysis is a semi-annual analysis that looks at the market for condominiums and single-family homes on an alternating basis. With the eight major regions analysed, it covers the whole of Switzerland and at the same time provides information on the development of supply and demand for owner-occupied homes, differentiated by region and broken down by market segment.

Homegate and ImmoScout24 as well as the Swiss Homeowners Association publish the analysis in collaboration with the Swiss Real Estate Institute of the HWZ Hochschule für Wirtschaft Zürich. The latest edition analyses single-family home listings for the period from 1 July 2022 to 30 June 2023, which originate from several well-known real estate portals and thus comprise the majority of all online listings during the study period in Switzerland.

Here you can find the complete media release on the current Online Home Market Analysis, including further graphics and detailed reports on the individual regions.

October 2023
Canton Zurich identifies untapped potential for solar power

Falling prices for solar installations have fuelled the construction of new photovoltaic systems in the canton of Zurich, as an analysis by the cantonal statistics office shows. According to this, there were at least 12,600 active photovoltaic systems in the canton at the end of 2021. Almost all of them were installed after 2010, according to the data. They produced about 0.3 terawatt hours of solar electricity per year, which is roughly equivalent to the annual electricity consumption of the canton of Appenzell Ausserrhoden.

Despite the increase in installations, the analysis finds that there is still a great deal of untapped potential for solar power. About half of all Zurich systems are installed on single-family homes. There is still a need to catch up with multi-family houses and buildings that are not used for residential purposes. The latter also offer space for larger systems with a higher installed capacity.

The analysis identifies further potential in new buildings. When the new cantonal energy law comes into force in September 2022, all new buildings will have to contribute to covering their electricity demand. It can therefore be assumed that new systems will be installed in the coming years.

The Canton of Zurich wants to achieve zero greenhouse gas emissions by 2040 – or by 2050 at the latest. Accordingly, according to its own information, it attaches great importance to the use of the existing potential for renewable electricity production. ce/ssp

August 2023
Federal Councillor Parmelin’s round table on the housing shortage

Representatives of the three levels of government, the construction and real estate industry as well as other actors participated in the round table. The aim of the meeting was to find a common understanding of the challenge and the roles of the actors, to get an overview of the causes of the housing shortage and to discuss possible solutions.

The issue of housing shortages has been discussed for several weeks. At the national level, the situation is not yet dramatic. However, the housing market is already strained in some regions and the prospects for the coming years are not rosy. The backgrounds and causes for this development are diverse and complex.

Approaches to solutions can only be worked out together with all those involved. Following the round table, various questions will now be examined in greater depth. At the same time, an action plan with possible measures will be developed.

May 2023
EY attests GZA efficient location marketing

The consulting company EY certifies that the GZA and its partners in the member cantons make a positive contribution to the qualitative and sustainable development of the Zurich economic area. This is the conclusion of the third analysis by EY on the activities of the GZA in the years 2018 to 2021.

According to this analysis and a corresponding media release by GZA, 445 companies from abroad were settled in the Greater Zurich Area during the period mentioned as a result of GZA's location marketing. You created new jobs in 2014. Looking at the entire period analyzed so far since 2009, 9426 new jobs were created directly. According to EY estimates, there were several tens of thousands of jobs indirectly due to so-called multiplier effects.

EY describes the settlement result as "very sustainable": The survival rate of the directly acquired companies is well above the average of all companies founded in Switzerland.

From 2018 to 2021, the new settlements brought tax income of CHF 57 million to the Greater Zurich Area. For the period 2009 to 2021, EY calculated tax income of around CHF 647 million, which is offset by total costs of CHF 89 million. This means that every franc invested in location marketing generates around 7.3 francs in additional tax income.

GZA's proactive and cross-cantonal location marketing has a "positive impact on the development of our common greater Zurich economic area," comments Carmen Walker Späh, President of the GZA Foundation and Zurich Economics Director. That is "very gratifying" because the international competition for the best companies and talents has been fierce for years.

September 2022
New professor for analysis, design and construction brings future-oriented impulses

From March, Friederike Kluge will be moving from the University of Applied Sciences in Konstanz to the University of Applied Sciences Northwestern Switzerland FHNW and is looking forward to this new challenge: “I’m interested in the question of what building will look like in the future. The status quo cannot work in the long term. My hope and my goal are therefore to find solutions in research and together with the students as to how we can design construction in the future. Climate-neutral and climate-positive construction must be approached in a focused manner, always taking biological diversity into account. In the first year, for example, the aim is to introduce young people to the field of architecture, to convey the basic topics to them and still leave room for development and creativity. I am interested in this tension between fixed, e.g. physical quantities, which are irrefutable, and change, which is essential for a sustainable future, and I look forward to researching and developing this further at the FHNW together with my colleagues. Always with the goal of creating architecturally high-quality buildings»

Friederike Kluge studied architecture at the University of Karlsruhe and gained initial teaching experience at the Professorship for Building Theory and Design, Prof. Daniele Marques, and at the Institute for Fine Arts, Prof. Stephen Craig. In addition to studying architecture, she completed the interdisciplinary accompanying course “Applied Cultural Studies” with the aim of designing buildings that bring together the knowledge of many subjects and at the same time have their own unmistakable character.

During her five years at Buchner Bründler Architects in Basel, she was able to work, among other things, on the Swiss Pavilion for the Expo in Shanghai 2010 and as project and site manager on the «Bläsiring» residential building in Basel.

Self-employed since 2012, she founded the «Alma Maki» office in Basel together with Meik Rehrmann at the beginning of 2014. Together they share the view that architecture gains if it represents a holistic process from the first sketch to the completion of construction and the basic architectural idea is still recognizable in the details. In order to be able to control this as best as possible, the office also implements the planned projects manually whenever possible and was awarded first prize in the “Swiss Foundation Award” for this approach in 2018.

Since 2013, Frederike Kluge has been conveying her belief in conceptual, design, performance and built stringency, among other things as part of a teaching assignment at the Professorship for Architecture and Construction, Annette Spiro, ETH Zurich and since 2019 at the HTWG Konstanz, where she teaches the subjects of building construction and design consistently focused on the topic of sustainable building. For example, she organized a workshop entitled “The architectural detail in times of climate crisis”. As a result, the group “Countdown 2030” was founded. The founding idea was to develop a guide and to install a countdown clock above the architecture museum, which would sensitize the architecture industry to take bold measures in architectural practice and to develop a sustainable building culture. The group now has over 50 active members, organizes workshops, panel discussions and exhibitions, is active on juries and municipal committees, publishes articles on various topics in specialist journals and has been awarded the “Factor 5 Audience Prize” for its work and has been nominated for awarded the Swiss Art Award.

The Institute of Architecture is extremely pleased that such a committed and future-oriented personality could be won.

source

University of Applied Sciences Northwestern Switzerland FHNW
University of Architecture, Civil Engineering and Geomatics www.fhnw.ch/habg

February 2022
Canton of Zurich combats overheating of the settlement area

The canton of Zurich wants to reduce the heat load in the canton’s settlement areas. To this end, the canton is making a new website called Heat in the settlement area available, informs the canton administration in a message . The site offers an interactive tool with which the current climate situation for any area can be analyzed. The website also has recommendations and specific measures against overheating for any further development of the selected area.

In addition, examples of climate-adapted settlement development are presented on the new website. 18 possible measures are shown with which the climatic situation in urban planning, buildings and open spaces can be improved.

The canton also provides a digital application that can be used to examine and visualize measurement data on the air temperature from around 50 locations in the canton, explains the cantonal administration. For this purpose, the application is based on a measuring network operated by the cantonal office for waste, water, energy and air for two years. The digital tool is intended to contribute to a better analysis of heat waves and the effect of urban development measures on heat reduction.

August 2021
Demand for condominiums is stronger than before Corona

According to a report on the Online Home Market Analysis, the demand for condominiums declined slightly overall from the fourth quarter of 2019 to the end of the third quarter of 2020 in the reporting year, but saw a strong surge in demand in the last quarter. In the analysis carried out by the Swiss Real Estate Institute of the Zurich School of Economics ( HWZ ) and the Swiss Association of the Real Estate Industry ( SVIT ) in collaboration with the digital real estate company homegate.ch , this is based on the shorter advertising period for condominiums offered on the Internet.

During the entire reporting year, a condominium in Switzerland had to be advertised on an online platform for an average of 86 days. It was 60 days before the Corona crisis. In the third quarter of 2020, however, the advertising time fell to the record low of 52 days, despite an 8 percent increase in the number of advertisements. Condominiums are therefore currently more in demand than ever, the analysis found.

Supply and demand were analyzed based on the advertisements on the seven major Swiss real estate marketplaces between October 1, 2019 and September 30, 2020 compared to the previous period. In the reporting period from October 1, 2019 to September 30, 2020, around 91,387 condominiums were offered for sale on the Internet across Switzerland, which corresponds to an increase of 19 percent compared to the previous period.

Professor Peter Ilg, head of the Swiss Real Estate Institute at HWZ, attributes the growth in demand mainly to two factors: “On the one hand, the boom in demand in the third quarter is due to the deferred demand from the previous quarters, but on the other hand it is also due to a change in behavior: More beautiful living is has become even more important to many Swiss after the lockdown, ”Ilg is quoted as saying.

Jens Paul Berndt, CEO of Homegate AG, is quoted as saying: “We have also noticed a sharp increase in visits and contact inquiries. This is a sign that real estate is a popular investment property even in times of crisis. "

December 2020
Pandemie verzögert Erholung im Schweizer Hochbau

Die Bautätigkeit im Hochbau werde in diesem Jahr um 3,1 Prozent geringer als im Vorjahr ausfallen, prognostiziert BAK Economics in einer Mitteilung zur aktuellen Bauprognose des Wirtschaftsforschungsinstituts. Im kommenden Jahr wird ein weiterer Rückgang um 1,8 Prozent erwartet. Als Begründung weist BAK Economics auf im Jahresvergleich gesunkene Zahlen bei im Bau befindlichen Projekten, Baubewilligungen und Baugesuchen hin. „Diese Indikatoren sprechen dafür, dass sich die Hochbautätigkeit in einem zyklischen Abschwung befindet“, erläutern die Analysten.

Sie gehen von einem Abschwung in allen Sparten des Hochbaus aus. Dem Wohnbau käme dabei allerdings aufgrund des besonders hohen Anteils eine besondere Rolle zu, heisst es weiter in der Mitteilung. Hier hätten steigende Leerstände zu einem Rückgang der Baubewilligungen seit 2018 geführt.

Der Betriebsbau werde hingegen vor allem von den Auswirkungen der Pandemie gebremst, da in dieser Sparte Bauprojekte von besonders betroffenen Branchen wie dem Tourismus erfasst werden, erläutern die Analysten. Den Abwärtstrend beim Infrastrukturbau führen sie hingegen eher auf zyklische Effekte zurück.

Mittelfristig gehen die Analysten von einer wieder steigenden Hochbautätigkeit in allen Sparten und Landesregionen aus. Dem Wohnbau werden dabei schwächere Wachstumsraten als in der Vergangenheit prognostiziert. Gute Perspektiven sehen die Analysten aufgrund gewachsener Bedeutung von Transport- und Logistik für den Lager- und Hallenbau. Regional weisen sie der Region Zürich/Aargau sowie dem Genferseeraum die höchsten Wachstumsperspektiven zu.

September 2020